How to Handle Hard Drives in Government Probe

Although there is plenty of guidance in case law and in the Federal Rules of Civil Procedure regarding court-supervised electronic discovery, companies responding to government requests find themselves on a journey without a road map. In the absence of court supervision or rules, and given the tendency of government investigations to change focus over time, a responding company cannot hope to identify and preserve every byte of relevant electronically stored information. There is an element of fortune-telling inherent in every preservation effort. The importance of forensic analysis in recent cases, however, suggests that preservation of hard drives should be a high priority.

The first step of a government investigation typically will be a grand jury subpoena, or a voluntary request or subpoena from a government agency, calling for the production of documents on specified topics. Because government investigations typically involve multiple subpoenas issued over time as the government’s investigation becomes more targeted or changes direction, however, companies typically try to preserve broadly in response to the initial request. This effort often includes a preservation notice issued to every employee within the company or within specific offices or departments.

In addition, companies should consider taking affirmative steps to preserve the information deemed to be most signifi cant, based on the limited information available at the outset of the investigation. This may involve running search terms on specific compilations of documents and preserving the hard drives of key employees. Doing so can minimize the negative consequences if employees fail to understand the directive or knowingly seek to destroy relevant information.

via How to Handle Hard Drives in Government Probe.

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Daimler agrees to settle Justice Department charges of bribing foreign officials – washingtonpost.com

Daimler has agreed to pay $185 million in fines and penalties to the U.S. government to settle charges that it violated federal bribery laws by paying tens of millions of dollars to officials in at least 22 countries to win lucrative contracts, according to a source familiar with the deal.

The proposed settlement would end a U.S. Justice Department investigation that concluded the German automaker had violated the Foreign Corrupt Practices Act (FCPA), which prohibits companies from bribing government officials to land business or receive favorable treatment.

In a 76-page filing in federal court on Tuesday, prosecutors said that Daimler made improper payments starting in 1998 to officials in countries that included China, Russia, Egypt, Greece and Nigeria. The charges against Daimler were made in a “criminal information filing” — a document that typically precedes a plea agreement.

via Daimler agrees to settle Justice Department charges of bribing foreign officials – washingtonpost.com.

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Swiss Government Asks UBS to Pay Legal Costs in Tax Dispute With U.S.

The U.S. may have trumped Switzerland in Olympic men’s hockey on Wednesday, but its tax battle with Switzerland continues.

Swiss news agencies reported on Wednesday that the government would ask Zurich-based banking giant UBS to reimburse it for outside legal costs stemming from the bank’s long-running legal dispute with U.S. authorities over allegations of tax evasion by U.S. citizens holding UBS accounts.

A deal to resolve that dispute by releasing the names of 4,450 U.S. citizens with UBS accounts was tentatively struck last August. UBS relied on lawyers from Wachtell, Lipton, Rosen & Katz, Cravath, Swaine & Moore and Florida’s Stearns Weaver Miller Weissler Alhadeff & Sitterson in those negotiations, while the Swiss government retained Pillsbury Winthrop Shaw Pittman international trade practice chair Stephan Becker and Palm Beach, Fla.-based attorney John Dotterrer on the matter. (UBS also paid a $780 million fine and agreed to turn over nearly 300 client names as part of a deferred prosecution agreement it struck with U.S. prosecutors in February 2009.)

According to Swiss news reports, the dispute between U.S. regulators and UBS has so far cost the Swiss government $2.3 million. UBS has agreed to reimburse the government, which hired Becker and Dotterrer to file briefs in federal court in Florida defending the bank, more than $931,000 of that $2.3 million. The Swiss could eventually incur another $34.4 million in costs as a result of helping U.S. authorities track down American tax evaders. (It's unclear at this point how much of those costs relate to legal fees paid to outside lawyers; Becker and Dotterrer did not respond to requests for comment.)

via Swiss Government Asks UBS to Pay Legal Costs in Tax Dispute With U.S..

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US Likely to Broaden Anti-Bribery and Corruption Efforts | Business Ethics

Look for the U.S. government to further intensify its efforts to combat transnational bribery and corruption, broadening them to include more government agencies in addition to the Justice Department, a top government prosecutor said.

“It’s my view that the U.S. government – and not just the Justice Department, but the U.S. government more broadly – is going to focus on international corruption in a more comprehensive and even more rigorous way than it has in the past,” said Mark Mendelsohn, the Justice Department’s lead criminal prosecutor for violations of the Foreign Corrupt Practices Act (FCPA).

Speaking to an audience of corporate compliance officers at the Dow Jones Global Ethics Summit in New York City, Mendelsohn said the increased activity would reflect President Obama’s “well-known and strongly-held views about the corrosive effect of corruption on the role of development and the rule of law.”

FCPA prosecutions have exploded in the past five years, with the Department of Justice bringing a total of twenty-six enforcement actions in 2009 compared to only two in 2006.  Earlier this month, British defense contractor BAE agreed to pay fines totaling almost $450 million to settle charges that it had made illegal payments to officials in various countries to obtain contracts.  In late 2008, industrial giant Siemens agreed to pay more than $1.6 billion in fines and penalties to settle charges brought under the FCPA.

via US Likely to Broaden Anti-Bribery and Corruption Efforts | Business Ethics.

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Two Decades and Counting for Iran Case

Lawsuits — particularly the big-dollar, complex corporate variety — often get compared to marathons. In the case of McKesson Corp.’s legal struggle with the government of Iran, however, that comparison doesn’t quite cut it.

On Jan. 22, the dispute, a fight over shares in an Iranian dairy, reached its 28th anniversary. It has wended its way through one international arbitration, two federal trials and five trips to the U.S. Court of Appeals for the D.C. Circuit. Now, it could soon be heading for its sixth.

A decade ago, a federal judge awarded McKesson $20 million for claims that Iran expropriated the company’s interest in the dairy and withheld its dividends. But during the past seven years, the case has hit a series of unexpected bumps, from changes in government policy to new rulings from the U.S. Supreme Court. The longer it’s gone on, the trickier its path has seemingly become.

San Francisco-based McKesson, a medical products distributor that ranked 15th on last year’;s Fortune 500, is represented in the case by a team from Morgan, Lewis & Bockius headed by partner Mark Bravin. The company and Bravin declined to comment. Iran’s lawyers from Washington, D.C.’s Berliner, Corcoran & Rowe, including partner Thomas Corcoran Jr. and associate Laina Lopez, also declined to comment.

via Law.com – Two Decades and Counting for Iran Case.

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Daimler to pay $200 mln, end bribery probe-report | Reuters

Daimler AG (DAIGn.DE) agreed to pay about $200 million and two units will enter guilty pleas to resolve a U.S. investigation into whether the German automaker paid bribes to secure overseas business, Bloomberg News said on Friday, citing people familiar with the accord.

Daimler, U.S. Department of Justice the U.S. Securities and Exchange Commission representatives had no immediate comment or were not immediately available for comment.

According to the report, the settlement would resolve both a Justice Department probe into whether Daimler violated the Foreign Corrupt Practices Act by bribing government officials, and also a related SEC civil probe.

The charges against the units were not immediately clear.

Government lawyers submitted the settlement for approval by U.S. District Judge Richard Leon, the report said, citing the people.

via Daimler to pay $200 mln, end bribery probe-report | Reuters.

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How “Open Gov” Datasets Affect Parents and Consumers | The White House

On December 8, 2009, the Administration issued the Open Government Directive to hardwire the values of transparency, participation and collaboration into the DNA of the Federal government.  Around here, we call the general effort ”Open Gov.” You can learn more about it here: WhiteHouse.gov/open.

As part of the Directive, federal agencies have answered the President’s call by democratizing hundreds of high-value datasets on every aspect of government operations.  While this is meaningful for the technology community and transparency advocates who have been working on this issue for years, the data released will have direct impact on the daily lives of the American people.  Here are three examples to consider:

Parents can make better decisions when buying a car seat for their newborn because the National Highway Traffic Safety Administration released data rating child safety seats for ease of use, simplicity of instructions and vehicle installation features

Consumers can make intelligent decisions when buying a car because the Department of Transportation released details behind automobile safety and crash ratings gathered during crash and rollover tests conducted at their research facilities

As Norm Eisen mentioned in his earlier post (which has a few other good examples), entrepreneurs, researchers and healthcare professionals can access Medicare Part B data to analyze the cost, volume and types of services delivered to meet the needs of Medicare beneficiaries because the Centers for Medicare & Medicaid Services has released data that used to cost $100 and was delivered on CD-ROM, for free via Data.gov

The Obama Administration is committed to unlocking public data to drive innovation by tapping into the ingenuity of the American people; increase agency accountability; and change the default setting of Washington to be open, transparent and participatory.  For far too long, government data has been locked within the four walls of Washington and confined to a selected group of people. President Obama has said, “information maintained by the Federal Government is a national asset.”  This is why, on his first full day in office, the President charged agencies to harness new technologies to put information about their operations and decisions online.

via How “Open Gov” Datasets Affect Parents and Consumers | The White House.

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Video: An Update on the U.S. Government’s Response to the Haiti Earthquake | The White House

Earlier this evening, the White House released an overview of key facts and examples of government actions in response to the earthquake in Haiti.  You can keep up to date with the latest news and resources on the response at the White House’s dedicated webpage.  Before this summary of what your government is doing, a quick reminder from former Presidents Bush and Clinton about how you can help:

Contribute online through ClintonBushHaitiFund.org.
Text “QUAKE” to 20222 to charge a  $10 donation to the Clinton Bush Haiti Fund (the donation will be added to your cell phone bill).
Find more ways to help through the Center for International Disaster Information.

    All numbers below are accurate as of noon Sunday, January 17, 2010

    AIRPORTS AND AIRSPACE

    The airfield is open for 24/7 operations and has a 100-aircraft per day capacity, this is an increase from yesterday’s 60 aircraft per day capacity. The airport has received more than 600 short tons of supplies. USAF air traffic control and airfield management personnel continue to manage air operations at the airport with approval of the Government of Haiti. There are 30 military helicopters providing relief to the people of Haiti. These helicopters are operating out of nine landing zones, including five drop-off points.

    SAFETY

    Approximately 5,800 military personnel on the ground or afloat.  Approximately 7,500 additional military personnel are expected to arrive by 1/18. More than 1,000 personnel from the 82nd Airborne Division arrived in Haiti on 1/16.

    HEALTH

    More than 250 HHS medical personnel have arrived in Haiti.  2 planeloads of medicine, medical equipment and supplies from HHS have arrived in Haiti with a third expected to arrive today. 3,840 hygiene kits taken from USAID stockpiles in Miami have arrived. The USNS Comfort is currently underway and expected to arrive on 1/20 with 600 medical personal on board.

    EVACUATION AND RESCUES

    As of 0900 a total of 1,760 American citizens have been airlifted out of Haiti. USAID/DART reported that a U.S. Urban Search and Rescue (USAR) team had rescued an additional three individuals at the Caribbean Market. As of 0900, US USAR teams have rescued 26 individuals.  There are currently six US USAR teams operating in Haiti along with 21 international USAR teams from around the world.  US teams are based out of Fairfax VA, Los Angeles CA, Miami FL (two teams), New York NY and Virginia Beach VA. Each USAR team includes approximately 70 team members.

    FOOD AND WATER

    U.S. military aircraft have airlifted 130,000 humanitarian daily rations and more than 70,000 bottles of water to Port-au-Prince. Three water purification units are operational and can supply 180,000 liters per day. USS Carl Vinson continues to provide potable water production. U.S. military aircraft will continue to support the delivery of an additional 600,000 daily rations over the next several days. Six additional water purification units are scheduled to arrive in the coming days from USAID stockpiles in Dubai. Each unit provides 1000,000 liters of safe drinking water serving 10,000 people per day.  12,000 water containers have arrived from Miami. Yesterday, the U.N. World Food Program distributed high-energy biscuits to a total of 50,000 people. The World Food Program Port-au-Prince metropolitan areas schools feeding program is now serving hot meals to 50,000 affected people.

    via An Update on the U.S. Government’s Response to the Haiti Earthquake | The White House.

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    $2.2 Billion IP Suit Filed Against Computer Makers, Chinese Government

    A family-owned firm in Santa Barbara, Calif., has filed a $2.2 billion copyright infringement lawsuit against the People's Republic of China, two Chinese software makers and seven major computer manufacturers that helped distribute Green Dam Youth Escort software.

    Critics claim that the Chinese government used the software to block its citizens from accessing political and religious Web sites that the government deemed objectionable.

    A lawyer for the plaintiff, Solid Oak Software Inc., called the lawsuit a test case for U.S. companies.

    “Here you've got seven major computer manufacturers conspiring with the Chinese government and two software developers to take a program they all knew came from a U.S. company and integrate that into another program and then distribute tens of millions of copies of it,” said Gregory Fayer, an attorney at Los Angeles-based Gipson Hoffman & Pancione. “We think this is an important test case for enforcement of U.S. IP rights in U.S. courts against folks who are not respecting those rights in places other than the U.S.”

    via $2.2 Billion IP Suit Filed Against Computer Makers, Chinese Government.

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    Cayman Islands To Update Data Privacy Legislation

    The Cayman Islands government has announced that it is developing legislation to regulate how personal information is collected and processed by all businesses and organizations to ensure that data privacy is maintained.

    The new law will also ensure that individuals are able to access information about themselves that is held by government entities and private sector groups. It will also require that such data is accurate.

    A Cabinet-appointed data protection working group has been meeting to consider a framework wherein such legislation might be introduced.

    David Archbold, Chairman from the Information and Communications Technology Authority (ICTA), has reported that the group is presently reviewing laws from other jurisdictions that it feels may be relevant to the local situation, and is developing policy recommendations.

    Explaining that data protection mandates a comprehensive, principled approach to protecting personal data, Archbold commented: “The law will impose requirements on 'data controllers' to handle personal information fairly and lawfully.”

    “Personal data may only be collected, used, stored and accessed for specified purposes, and must always be adequately safeguarded. Data controllers will be accountable for complying with these principles and liable for breaches, such as unauthorized use or disclosure,” he continued.

    In early 2010, the group will submit recommendations to the Cabinet Secretary and Attorney General for an approach to the introduction of such legislation, including how best to monitor and enforce compliance. It will also prepare a paper on key issues for public consultation.

    via Cayman Islands To Update Data Privacy Legislation.

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