Bengaluru: Less than 24 hours after US President Donald Trump signed an executive order halting prosecutions of Americans accused of bribing foreign government officials, a New Jersey court put on hold pretrial proceedings in a six-year-old case involving Cognizant Technology Solutions Corp.
The court was to determine whether two former executives of Cognizant routed illicit payments through Larsen & Toubro to Indian government officials.
The US Department of Justice’s case against former Cognizant chief operating officer Gordon Coburn and former chief legal officer Steven Schwartz, which is alleged to involve bribery, is among the first to face uncertainty after the new order signed by Trump on 10 February.
“The Court previously scheduled a proceeding for February 18. That will not go forward,” Judge Michael E. Farbiarz ordered on Tuesday. “In light of the Executive Order issued yesterday by the President, the United States shall state its position as to the upcoming trial.”
According to court documents, the case was to start on 3 March and the pre-trial proceedings were to begin on 18 February.
An email to the US Department of Justice seeking comment went unanswered, and an email to lawyers for Coburn and Schwartz on Tuesday did not elicit a response.
Trump halted enforcement of the Foreign Corrupt Practices Act, which, since coming into effect in 1977, prohibited US nationals and companies from bribing foreign officials overseas. FCPA served as a tool in cracking down on unscrupulous business actors.
Major blow
Halting the enforcement of the act puts international stability at risk, according to at least one anti-corruption watchdog.
“Clipping the wings of the Department of Justice’s enforcement of the FCPA delivers a major blow to the fight against foreign bribery worldwide,” Transparency International, the Berlin-based anti-corruption watchdog, said in a statement on Tuesday. “It risks undermining decades of progress in tackling cross-border corruption and puts international stability at risk. This pause will work to the advantage of unscrupulous business actors around the world who until now feared US criminal pursuits.”
New Jersey-based Cognizant used L&T to pay $3.64 million in bribes between 2012 and 2015 to secure faster approval to build the US company’s three campuses in Chennai and Pune, according to a probe by the US Department of Justice. In 2019, Cognizant agreed to pay $25 million to settle this investigation case with the US authorities. However, the US Department of Justice charged Coburn and Schwartz with approving the bribes, marking the start of the ongoing case.
Both Coburn and Schwartz have denied any wrongdoing.
One fallout from these legal proceedings not taking place is on S.N. Subrahmanyan, the chair of the country’s largest engineering and construction company. Subrahmanyan was the head of L&T’s construction business when some of the company’s employees are alleged to have bribed Indian government officials in return for faster approvals to build Cognizant’s office campuses in Chennai and Pune.
The Department of Justice probe states that it has emails detailing how the bribe payments were orchestrated, many of which were marked to L&T executives, including Subrahmanyan.
L&T and Subrahmanyan are not parties to the ongoing US probe against the former Cognizant executives. Both L&T and Subrahmanyan have denied any wrongdoing.
Still, that has not stopped US officials from questioning Subrahmanyan.On 21 May 2018, Subrahmanyan was “formally interviewed” in Singapore by officials from the US Attorney’s Office and the Federal Bureau of Investigation.
Subrahmanyan told the US officials that he “does not remember discussing the planning permit” and did not hear anything about a “request from a government official for improper payment,” Mint wrote in its edition dated 7 August 2023.