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The extraordinary success of the U.S. Department of Justice’s cartel-busting antitrust lawyers-they’ve put 107 corporate miscreants behind bars since 1999 and garnered nearly $3 billion in criminal fines-has hit the rocky shoals of British law and politics. American officials sold a 2003 extradition treaty between the United States and the United Kingdom after the attacks of Sept. 11, 2001, as a fast-track process for delivering suspected terrorists to the United States for trial. But a British revolt began fulminating against the new law after American prosecutors put it to use for white-collar financial crime instead. Half of the 45 extradition requests under the new law have been white-collar offenses and none terrorism-related, according to one critical peer from the House of Lords. Now British critics are drawing the line with the price-fixing case against Ian P. Norris. Norris, a patrician 63-year-old retired chief executive of Morgan Crucible PLC, stands accused in a federal court of running a worldwide cartel in carbon-related products from 1989 to 2000, witness tampering and destroying evidence. U.S. v. Norris, No. 03-632 (E.D. Pa.). “The Norris case is one that everyone is looking at,” said Donald C. Klawiter, an antitrust attorney in the Washington office of Morgan, Lewis & Bockius and chair of the American Bar Association Section of Antitrust. “My sense is practitioners are looking seriously at the possibility that extradition will become a remedy available to the [DOJ's] Antitrust Division. That will be a big concern to people who do these cases,” he said. The potential extradition of Norris has become a test case pitting the Antitrust Division’s desire to police illegal cartels worldwide against the traditional British treatment of price-fixing as an enforcement problem directed against a company, not an individual. In November 2002, Morgan Crucible paid $11 million to settle criminal price-fixing and obstruction charges in the United States, but the plea deal excluded Norris. If British appeals courts ultimately uphold the initial order by Judge Nicholas Evans in London’s Bow Street Magistrates’ Court that Norris be shipped off to face a Philadelphia jury, he would become the first overseas executive extradited to face criminal charges of Sherman Antitrust Act violation, according to Lawrence Byrne of White & Case’s New York office, the leader of Norris’ U.S. and British defense team. His efforts might have suffered a blow on Feb. 21, when the High Court in London allowed an extradition order to stand in the unrelated fraud case against three British bankers linked to the Enron Corp. scandal. The trio challenged Britain’s Extradition Act on grounds similar to one of Norris’ challenges argued before that court in January. The Norris prosecution has produced protests from Lord Hodgson of the House of Lords, who complained of a senior U.S. antitrust official “bragging” about the ease of U.K. extraditions on antitrust grounds. The DOJ makes extradition requests directly to the United Kingdom without the need to obtain permission from U.S. courts. Critical British headlines suggested “a white-collar Guant�namo” in America or criticized the “testosterone-charged mindset” of American honchos in the Antitrust Division. “The DOJ has been trying to assemble a ‘coalition of the willing’ to fight international cartels,” said Julian Joshua, a Howrey lawyer based in Brussels who specializes in trans-Atlantic cartel cases. “On the other side, an unlikely but vociferous coalition has formed in the U.K. uniting prominent lawyers, Liberal peers, eccentric Tory MPs, business figures, civil rights advocates and Muslim groups to oppose the extradition arrangements with the U.S.,” said Joshua, who spent 25 years as an investigator in the European Commission’s anti-cartel unit. Dual criminality The problem for the DOJ: Price-fixing did not become a crime in the United Kingdom until the Enterprise Act took effect in 2003. Norris’ alleged conduct occurred years before it could be considered illegal, violating one of the basic tenets of nearly every treaty-that the conduct used as a basis for extradition must be a crime in both the sending and receiving countries-known as dual criminality, according to Byrne. “This is an important case because it is really the first time the U.S. has sought extradition for price-fixing in the U.K.-the first time where there was no dual criminality,” Byrne said. To address this legal problem, U.S. prosecutors relied on the new law that eliminates the old-style list of specific crimes and substitutes a requirement that any offense is now extraditable if it is punishable by at least one year in prison and the laws in both states are similar. Prosecutors then employed the novel theory that price-fixing in the United States is equivalent in English law to the crime of conspiracy to defraud. “This strikes me as a bit of a shoehorn approach,” said John S. Magney, an antitrust attorney in the Washington office of New York-based Cleary Gottlieb Steen & Hamilton. The DOJ had nothing to stop it from using that argument before, but it has never applied a similar theory in the past, he said. “In most countries, price-fixing is not criminal so [the DOJ] has not tried to extradite,” he said. Joshua said, “Common law conspiracy to defraud has been a crime in English law for 800 years, but it has only just now occurred to prosecutors to invoke it against suspected price-fixers.” The DOJ hopes that invoking “fraud” to satisfy dual criminality “could be a precedent for extradition from other European countries, but given Continental attitudes both to extradition to the United States and to the notion of conspiracy, that might be overly optimistic,” Joshua said. James M. Griffin, former deputy assistant attorney general in the Antitrust Division and now in the Washington office of Atlanta-based King & Spalding, explained its significance to American cartel fighters. “If executives in Europe and Asia engaging in conduct that violates cartel law . . . think they will face jail time in the U.S. just as American executives do, it will have a huge deterrent effect. That is why it is so important.” Griffin declined to discuss the Norris case specifically because he was with the DOJ when extradition proceedings began. Current Antitrust Deputy Assistant Attorney General Scott Hammond did not respond to several requests to discuss the issue, but he has made it clear in speeches to antitrust lawyers around the globe that the DOJ wants foreign executives engaged in illegal cartel behavior to face prison time, just like American executives. Amnesty program Hammond attributes record-setting criminal fines and jail time to the department’s cartel leniency program, which offers amnesty to the first company to confess wrongdoing and share details of their collusion-in effect, to name names before the government finds co-conspirators. It also provides a free pass from prosecution to cooperating executives. In fiscal year 2005, the antitrust enforcers obtained $338 million in criminal fines against 13 corporations and 20 individuals, according to Hammond. During the same period, 18 individual defendants were sentenced to an average of two years in prison each, he said. Since 1999, 20 foreign nationals from nine countries have voluntarily submitted to return to the United States to serve criminal sentences for antitrust violations, he said. There are currently 56 sitting grand juries investigating suspected international cartel activity involving 25 different countries, Hammond said. Griffin said the amnesty program is working. “It is the most significant investigatory tool the authorities have, particularly in international cases,” he said. Hammond said, in an American Bar Association speech on cartels in November, “The stakes will continue to rise for companies and their executives,” pointing out that Congress raised the maximum prison term from three years to 10. Klawiter of Morgan Lewis expressed some concern about the ability to continue winning guilty pleas from foreign executives if prison terms rise. He said he shared that warning with the U.S. Sentencing Commission shortly after the law was changed. But indicted foreign executives who do not submit to U.S. jurisdiction are put on Interpol’s “red list” of wanted fugitives and face potential arrest at airports any time they travel. The United States has been preaching the anti-cartel gospel to encourage other countries to sign on to the endeavor, according to Joshua. “Almost every country has signed up to the campaign,” he said. But the show of unity “conceals a deep ideological divide between the countries that regard cartels as an economic phenomenon, best dealt with by administrative fines on companies, and the select group that regard cartels as unalloyed criminality,” he said. Those countries will be watching the outcome of the Norris case as well. Hammond boasted to a Las Vegas audience of antitrust lawyers last March that under the fast-track designation of Britain’s new Extradition Act, “no longer do we have to make a prima facie case in support of the extradition request. We don’t have to submit witness affidavits. [A] hearsay affidavit by the prosecutor is enough.” It is those conditions that rile British politicians and critics of the treaty. They say the deal is not reciprocal because the United Kingdom must still adhere to American constitutional protections of probable cause under the Fourth Amendment when they seek extraditions from the United States. White & Case issued a white paper in October responding that Hammond’s comments “reflect the ease with which U.K. citizens can now be extradited” while the legislation “abolished a raft of safeguards previously in place to protect U.K. citizens.” Hammond’s speech in Las Vegas “has been portrayed by opponents as symptomatic of U.S. imperialistic efforts to extend its jurisdiction beyond its territory without being prepared to reciprocate with regard to other friendly states,” Joshua said. But particularly galling to the critics has been the U.S. Senate’s failure to ratify the treaty to provide one important benefit to the British, the elimination of the American “political crimes” exception as a protection against extradition from the United States. Civil libertarians and some Irish-American groups have opposed that. The treaty is awaiting review in a Senate committee. Norris has legal challenges pending on multiple fronts in London, including an attack on the legality of extraditing him for alleged conduct not considered a crime at the time and a broad attack on the legality of the treaty itself. He can carry those appeals to the House of Lords, whose Judiciary Committee is roughly equivalent to the U.S. Supreme Court. And failing there, he has an avenue to challenge his extradition as incompatible with the Human Rights Act, according to his lawyers.

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