On January 15, 2015, the U.S. Supreme Court granted certiorari in Robert F. McDonnell v. United States. The Court will review the public corruption convictions of former Virginia Governor Bob McDonnell to determine whether the definition of “official action” as used in the federal bribery statute, Hobbs Act, and honest-services fraud statute is limited to exercising actual governmental power or the threat or pressure to do so. If the definition is not so limited, the Court will also consider whether the Hobbs Act and honest-services fraud statute are unconstitutional—given that such a broad definition could include political activity protected by the First Amendment. This Teleforum will allow experts who have been involved in amicus briefs and analyzing the case to debate the positions articulated by Governor McDonnell and the U.S. Government as to the "official act" question.
Brian D. Boone, Alston & Bird LLP
Prof. Randall D. Eliason, George Washington University Law School
Mergers and other transactions between large telecommunications companies are always the subject of vigorous public debate, and recent developments in the area provide an excellent opportunity to explore many of the big questions in play. What is the future of media and telecom companies in today’s vast changing technology landscape? How important is scale? How should government assess the competition and public interest benefits and threats of proposed deals? What process should be employed by what agencies? How do the principles of net neutrality play into the equation? Our experts discussed these questions and others.
Hon. Michael Copps, Special Adviser, Media and Democracy Reform Initiative, Common Cause
William Rinehart, Director, Technology and Innovation Policy, American Action Forum
Moderator: Hon. Harold Furchtgott-Roth, Director, Center for the Economics of the Internet, Hudson Institute
Corporate inversions are transactions, such as mergers or acquisitions, that involve a U.S. and foreign headquartered firm and result in the newly formed firm being headquartered outside the U.S. As a result, it can legally lower its U.S. taxes and enjoy parity with its foreign based competitors. Noting the resulting erosion to the U.S. tax base, critics argue that absent Congressional action the U.S. Treasury has a responsibility to fully utilize its existing authorities to combat this practice. But others are concerned that attempting to do so without addressing the underlying problems with the U.S. tax code will create even greater harm to the U.S. economy. Stephen Shay, Senior Lecturer on Law at the Harvard Law School and until recently the Deputy Assistant Secretary of the Treasury for International Tax Affairs and Mihir Desai, who holds appointments at both the Harvard Business School and Law School, provided perspectives from legal and economic vantage points.
Prof. Mihir A. Desai, Mizuho Financial Group Professor of Finance, Harvard Business School and Professor of Law, Harvard Law School
Prof. Stephen E. Shay, Senior Lecturer on Law, Harvard Law School
If you do business with the federal government, when does violating a statute, regulation, or contract provision become fraud? This is the question facing the U.S. Supreme Court in Universal Health Services v. United States ex rel. Escobar, which examines the scope of the False Claims Act (FCA). The FCA provides for treble damages and civil fines for anyone submitting false claims for payment to the federal government. Violations of the FCA must involve a “false or fraudulent claim” or “a false record or statement material to a false or fraudulent claim.” Traditionally, the falsity element of an FCA claim required a “factual falsehood” (e.g., submitting a claim for payment for 10 computers when only 5 were delivered) or an express false certification (e.g., certifying to a lack of organizational conflicts of interest when such conflicts exist). But does submitting a claim for payment, by itself, represent to the government that all applicable legal requirements were followed such that failing to comply with those requirements renders the claims “false”? Circuit Courts have split on this question, and now the Supreme Court will decide.
This case has significant implications for anyone doing business with the federal government. If the Court recognizes a so-called “implied certification” theory of liability, it could substantially increase contractors’ exposure to the FCA’s punishing statutory regime.
In October of 2015, the European Court of Justice invalidated the EU-U.S. Safe Harbor agreement that allows for the transfer of personal data by U.S. companies that comply with a set of primary principles. Based in part on the Edward Snowden disclosures, the Court reasoned that U.S. law fails to provide adequate protection for such data. Now, businesses are implementing remediation plans to maintain legal compliance, and EU and U.S. negotiators are negotiating Safe Harbor 2.0. As a condition to a new agreement, some European policymakers are demanding that the U.S. reform its electronic surveillance programs. Our panel discussed these intersecting issues.
Stewart A. Baker,Partner, Steptoe & Johnson LLP
Susan L. Foster, Member, Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, P.C.
Moderator: Matthew R.A. Heiman, Vice President, Chief Compliance & Audit Officer, Tyco International