By March, the FBI had made a preliminary assessment: “There are ample facts and indicators which reflect that Sempra and its business executives may have engaged in criminal activity,” an agency memo said.
But a few months later, citing explanations provided by Sempra and its outside lawyers, the government closed the case.
Under the heading “Summary of Investigation,” an FBI memo recounts a “presentation” by “Sempra outside counsel” but mentions no effort by the government to independently probe the facts about the trust fund.
“Based on the foregoing information, DOJ concluded that no additional investigation was warranted as all allegations had been adequately addressed by Sempra,” a June FBI memo said.
Delegation of investigations
The federal government often delegates investigations of suspected corporate wrongdoing in large part to the very companies under investigation. As The Washington Post has reported, the companies hire teams of lawyers to look into the allegations and share their findings with the Justice Department and the Securities and Exchange Commission.
Recent FBI memos from the Sempra case, which the FBI posted on its Web site after The Post submitted a Freedom of Information Act request, offer a rare inside look at how the process can work.
“This clearly is an example of the DOJ . . . outsourcing an investigation,” said Mike Koehler, an assistant professor of business law at Butler University who represented companies accused of violating federal anti-bribery law and who now specializes in the subject as an academic.
Based on the documents, which Koehler reviewed at The Post’s request, the Justice Department’s handling of the case “really seems like cutting corners and not a thorough investigation,” he said.
Koehler said he was surprised that the government closed the case without enforcement action because information in the documents “would seem to support” charges under the Foreign Corrupt Practices Act.
In accepting the word of Sempra’s lawyers, the government neglected to pursue important questions, an attorney for Rodolfo Michelon, the former Sempra employee, said in a legal brief.
Federal officials “suffered a simultaneous failure of their critical faculties” and “went brain dead” listening to outside lawyers for Sempra, attorney Gary J. Aguirre, a former SEC enforcement official and whistleblower, said in the legal brief.
Anthony Michael Sabino, a law professor at St. John’s University who also reviewed the documents for The Post, reached a different conclusion, saying the government’s reliance on Sempra’s lawyers seemed to work.