More Trouble for Apple

Nearly two months after the release of the iPhone 4, the Antennagate fallout continues at Apple. This week, the company’s senior vice president for mobile devices, Mark Papermaster, left the company amid speculation that he was forced out over the iPhone 4’s defective antenna. According to the New York Times,

Apple confirmed Mr. Papermaster’s departure, but would not say whether he was ousted or left of his own accord. Reached on his cellphone, Mr. Papermaster declined to comment.

A person with direct knowledge of the situation, who agreed to speak on the condition of anonymity because he was not authorized to discuss it, said Mr. Papermaster had been pushed out over a series of hardware problems, including some related to the iPod Touch.

Mr. Papermaster, who joined Apple in 2008 from IBM, had been excluded from Steve Jobs’ July press conference addressing concerns with the iPhone 4’s antenna design. He will be replaced by Bob Mansfield, senior VP for Macintosh hardware engineering.

The decision to replace Mr. Papermaster might have been a result of his failure to address the defective antenna prior to the phone’s release. According to one source, Apple may have been aware of problems with the antenna design as early as two years ago. John Gruber reports,

One last tidbit from an informed source: the bug on the “touching it wrong” signal loss issue was filed two years ago. This is not a problem they didn’t catch, or caught too late. So, on the one hand, clearly the fundamental antenna design predated Papermaster’s time at the company. But on the other hand, there was plenty of time to find a solution to the problem.

If you own an iPhone 4, and are interested in participating in our lawsuit against Apple and AT&T, please email me at dan@wardlawdc.com. I look forward to hearing from you.

Thank you,

Dan Ward

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic Featured in Devex Article on Charles Taylor

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic was featured in a Devex article on Charles Taylor, entitled “Ex-Liberian Leader’s War Crimes Case Revisited Ahead of Supermodel’s Testimony.”

Ex-Liberian Leader’s War Crimes Case Revisited Ahead of Supermodel’s Testimony

By Ivy Mungcal on 04 August 2010

Supermodel Naomi Campbell is set to testify Thursday (August 5) before an international court in the Netherlands on a case that experts see as the potential link between former Liberian President Charles Taylor’s supposed war crimes and illegal financial activities.

This testimony is about the “blood diamond” Campbell supposedly received from Taylor, which could prove that the former African leader used his country’s resources to enrich himself. Such allegations are the reasons why the World Bank and United Nations created certain mechanisms to recover stolen country wealth, a Georgetown law professor observes.

The illicit financial transactions and diamond trade that supposedly funded Taylor’s crimes against neighboring Sierra Leone prompted World Bank President Robert Zoellick and U.N. Secretary-General Ban Ki-moon to create the Stolen Asset Recovery initiative, explains Mark V. Vlasic, who also serves as international legal adviser to the Charles Taylor/Liberia Asset Recover Team at Ward & Ward PLLC. The StAR, Vlasic explains, ensures that “there are no safe havens for stolen assets.”

Vlasic says war crimes often, and unfortunately, trigger economic crimes such as illegal trade, corruption and plunder.

“Sadly, it seems that the link between war crimes and economic crimes is that one leads to the other,” writes Vlasic in an opinion piece for the Washington Times. “Without money from blood diamonds and other natural resources, Mr. Taylor was limited in what he was able to accomplish. But with supporters, business associates and friends in multiple countries and global financial centers willing to look the other way, Mr. Taylor’s particular brand of evil was able to flourish not just via warfare, but also through financial transactions throughout the world.”

Vlasic adds that if Campbell did receive a “blood diamond” from the former president, prosecutors will gain critical evidence for their case. If prosecutors are able to establish a link between Taylor’s plunder of state coffers, war crimes and illegal diamond trade, they will be able to show how some people are willing to sacrifice the lives of innocent people as well as squander millions of dollars.

Taylor is also facing 11 counts of crimes against humanity, war crimes and other transgressions against international law with the Special Court for Sierra Leone, an independent judicial body created for trying crimes committed during the country’s civil war. These charges are based on allegations that he founded, supported and funded the Revolutionary United Front, a rebel group responsible for atrocities in Sierra Leone, Liberia’s neighbor country.

Taylor allegedly funded the group’s activities by engaging in the trade of “blood diamonds” and anomalous government practices.

Campbell supposedly received a “blood diamond” from Taylor during a 1997 dinner hosted by former South African President Nelson Mandela at his Table Mountain residence in Cape Town.

Latest News on iPhone 4 Antenna Problems

Last week, Apple launched the iPhone 4 in 17 additional countries, re-igniting debate over the phone’s antenna design. As Apple continues to run into problems domestically with its antenna ‘fix’, the controversy now moves abroad. According to Ars Techinica,

Lest you thought the whole ordeal was over, however, UK-based PA Consulting Group performed its own analysis, using tests similar to those performed by Consumer Reports and others. Those tests are in line with what we have already seen: the iPhone 4 has a bigger problem with signal loss than other smartphones. PA’s wireless expert Simon Tonks concluded that “the ‘death grip’ issue is real, and is worse for the Apple iPhone 4 than for other smartphones.” He also added, “The iPhone 4′s radio performance was also found to be generally at the lower end.”

Back home, Apple appears to be distancing itself from claims made by Steve Jobs last month that other smartphones suffered antenna issues similar to those of the iPhone 4. According to Channelweb,

“Is Apple backing off its assertion that the antenna issues plaguing iPhone 4 happen with rival smartphones, too?

Apple’s Web site sure makes it seem that way: gone — at least from immediate view — are the videos Apple posted detailing how other smartphones, such as Droid X, lose signal bars when held a certain way.”

The decision to withdraw these videos come after Research in Motion, Nokia, and other manufactures issued statements denying Apple’s assertions regarding their phone’s antenna designs.

If you own an iPhone 4, and are interested in participating in our lawsuit against Apple and AT&T, please email me at dan@wardlawdc.com. I look forward to hearing from you.

Thank you,

Dan Ward

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic Publishes Article in the Yale Journal of International Affairs

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic publishes “Fighting Corruption to Improve Global Security: An analysis of international asset recovery systems” – a Yale Journal of International Affairs article regarding the link between corruption and state security, with a focus on Afghanistan.

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic Publishes Article in the Huffington Post

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic publishes “The Next Financial Reform Floodgate” – a Huffington Post article, authored with Mike Signer, regarding an extraordinary new provision of the recently-passed Dodd-Frank financial reform bill: a 10-30% “bounty” of the ultimate penalty that may be awarded to any “whistleblower” who successfully helps the U.S. government resolve a foreign bribery-related (FCPA) matter:

The Next Financial Reform Floodgate

A lot can turn on an active verb. Hamlet said, “To be or not to be — that is the question.” The same applies to the new Dodd-Frank financial reform bill’s whistleblower provisions, signed by President Obama last week, which requires that any whistleblower providing “original information” leading to a penalty over $1 million “shall” receive between 10 and 30% of that collection.

For many companies, a world of hurt will soon turn on that single word, “shall,” unleashing a whirlwind of decentralized private enforcement for a public issue that’s taken even greater importance in the Obama administration and the Department of Justice’s Criminal Division — the nexus of corruption, bribery, and terrorism.

The Foreign Corrupt Practices Act of 1977 (“FCPA”) was enacted to make it unlawful for certain classes of persons and entities to offer or provide money or anything of value to officials of foreign governments or foreign political parties with the intent to obtain or retain business.

This criminal statute, which permits jail time for its (often white collar) offenders, applies to all U.S. persons and certain foreign issuers of securities, as well as foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States. The new bill will empower the SEC to reward FCPA whistleblowers financially.

For anyone who remembers the movie Syriana with George Clooney and Matt Damon, the FCPA is often associated with shady dealings and government contracts in far-away places. With the new financial reform law, however, acts in distant countries will haunt businessmen here at home. These new whistleblower “bounty” provisions mean that well-meaning employees (or even disgruntled employees with a bone to pick), are now incentivized to do well by doing good — collecting monetary rewards from Uncle Sam, while helping put U.S. executives in prison for violations of the FCPA.

This is partly about foreign policy. President Obama’s foreign policy sees the roots of bellicosity in civil society, meaning that lawlessness abroad can become lawlessness exported. With the stroke of a pen, President Obama not only democratized the global fight against corruption, he created a new weapon against the sorts of cultures that breed violent extremism, whether in Afghanistan or Pakistan, India or Russia.

But foreign policy will be far from the minds of the most immediate beneficiaries of the new law. To be blunt, the word “shall” will open up a world of financial security for hundreds of potential new whistleblowers, rewarded for their candor and courage with potentially enormous payments. This is especially the case when you consider the penalties paid by companies for FCPA-related offenses. In 2010, BAE paid $400 million, and in 2008 Siemens settled a FCPA mater for a staggering $800 million. With settlements — now mandatory — likely to run the hundreds of millions, you don’t need to be a mathematician to know a 10 to 30% cut will provide a prove powerful incentive to cooperate with the government.

For these new bounty-hunters, just as much turns on the word “shall,” much will also turn on how the statute is translated into practice. Two major inflexion points will be: (1) the discretion exercised by the officials at the Securities & Exchange Commission, and (2) how whistleblowers can avoid the potentially adverse consequences of disclosing corruption.

Let’s take those in turn. As the Securities Docket blog reports, “It will be interesting to see how the SEC exercises its discretion here.”

We’ll say. The legislation gives the SEC complete discretion to determine the amount of the award. They’ll be considering factors such as the significance of the whistleblower’s information and the degree of assistance provided. In other words, the decision to blow the whistle is only the beginning.

This all means that whistleblowers will need to ensure that they are as helpful (substantively and process-wise) to the SEC as possible in order to receive the maximum award.

The second question is even more pressing for the whistleblower, considering the hundreds of millions of dollars in penalties that firms have paid for FCPA violations.

With these stakes, the most vulnerable actors in the new system will be — no surprise here — the whistleblowers themselves. To cite another movie, anyone who saw The Insider (where Russell Crowe plays a whistleblower employed by a tobacco company) remembers the world of fear that can envelop someone exposing corrupt practices.

Experience shows that whistleblowers can be put through challenging and even dangerous experiences as a result of their actions. A recent study by professors at the University of Chicago and University of Toronto found that 82% of named whistleblowers experienced harassment or altered responsibilities. Many said, “If I had to do it again, I wouldn’t.”

True, the new law requires protections against retaliation. A wrongfully discharged individual will be entitled to reinstatement, twice back pay, litigation costs, and reasonable attorneys’ fees.

With these stakes, however, it’s likely that whistleblowers will decide that the greatest insurance is anonymity. The law provides that whistleblowers can submit information anonymously, as long as they are represented by counsel (and, of course, disclose their identity prior to receiving the award).

In the manure of corruption, let a thousand flowers bloom. By allowing counsel to represent such whistleblowers, Obama’s financial reform bill will also empower a new generation of lawyers to do well by doing good — helping fight corruption by helping whistleblowers bring these cases to light.

Michael Signer, a 2009 candidate for the Democratic nomination for Lieutenant Governor of Virginia, is managing principal of Madison Law & Policy Group PLLC, where he works on financial regulation matters. Mark Vlasic, a former prosecutor and head of operations of the World Bank’s Stolen Asset Recovery Initiative, works on international and anti-corruption matters as a partner at Ward & Ward PLLC.

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic Publishes Article in the Washington Times

Ward & Ward Partner and Georgetown University Adjunct Professor of Law Mark Vlasic publishes “Look Who’s Coming to Dinner: a warlord, a president, a model – and a blood diamond?” – a Washington Times article regarding international justice, asset recovery and a blood diamond Naomi Campbell allegedly received from Charles Taylor, now at issue in this week’s testimony of Miss Campbell at Mr. Taylor’s war crimes trial in The Hague:

Look who’s coming to dinner
A warlord, a president, a model – and a blood diamond?

By Mark V. Vlasic – The Washington Times

5:56 p.m., Friday, July 30, 2010

Only Nelson Mandela, South Africa’s legendary president, could have managed such a guest list. At Genadendal, his Table Mountain residence in Cape Town, Mr. Mandela hosted what by all accounts was a lovely dinner for such notables as supermodel Naomi Campbell, actress Mia Farrow and Liberia’s then-President Charles Taylor.

Thirteen years after this eclectic gathering, the events of that night are front and center in an international courtroom. Mr. Taylor stands accused of being a war criminal and sits in the dock in The Hague, and one of the star witnesses is a star herself. According to Miss Farrow, Miss Campbell may have received a “blood diamond” from Mr. Taylor’s associates that evening. If true, the allegation will provide critical evidentiary support to international prosecutors, and thus the world’s eyes will be on Miss Campbell Thursday, when she is compelled to testify at Mr. Taylor’s trial in The Hague.

The Special Court for Sierra Leone (SCSL) is trying Mr. Taylor on 11 counts of war crimes, crimes against humanity and other violations of international law, including terrorism, rape, sexual slavery and recruiting and using child soldiers. The charges stem from allegations that Mr. Taylor founded, funded and supported the Revolutionary United Front, a rebel army responsible for mass atrocities in neighboring Sierra Leone. Mr. Taylor funded this war, in part, by plundering state resources and trading in blood diamonds, one of which he purportedly presented to Miss Campbell at Genadendal.

If SCSL prosecutors are able to demonstrate the linkage between Mr. Taylor’s state plunder, diamond trade and mass atrocities, Mr. Taylor will stand as one more example of the proposition that those who are willing to slaughter thousands of innocents are also willing to steal millions of dollars, as Mr. Taylor purportedly did during the conflicts in Liberia and Sierra Leone. Sadly, it seems that the link between war crimes and economic crimes is that one leads to the other. Without money from blood diamonds and other natural resources, Mr. Taylor was limited in what he was able to accomplish. But with supporters, business associates and friends in multiple countries and global financial centers willing to look the other way, Mr. Taylor’s particular brand of evil was able to flourish not just via warfare, but also through financial transactions throughout the world.

It is because of the global nature of such illicit financial transactions and transfers in plundered assets that Robert Zoellick, president of the World Bank, and Ban Ki-moon, secretary-general of the United Nations, formed the Stolen Asset Recovery (StAR) Initiative. By assisting governments in their efforts to recover the proceeds of grand corruption, StAR serves as one more element in the fight against impunity, as it helps ensure that there are no safe havens for stolen assets. Thus, while tribunals such as SCSL are important institutions for holding perpetrators of war crimes responsible for their actions, recovering stolen financial assets is another important means of targeting those who act as financial enablers, thereby helping end the impunity for such crimes.

Miss Campbell’s story demonstrates that one does not need to be an international prosecutor, United Nations diplomat or World Bank official to find oneself in a position to help fight the impunity that so often is associated with war crimes and economic crimes. The supermodel, no stranger to courtrooms herself, likely never imagined that a dinner invitation from Mr. Mandela would land her on the witness stand in The Hague. But now, in an unlikely twist of fate, Miss Campbell has the unique opportunity to provide testimony that might help demonstrate that Mr. Taylor used blood diamonds for his own personal enrichment and to further the destruction he helped orchestrate in Africa.

Let us hope the supermodel recognizes the gravity of the role she is about to play in international justice and the fight against impunity and carries out her duties accordingly. As it was said by Edmund Burke, “All that is necessary for the triumph of evil, is that good men do nothing.”

Mark V. Vlasic is an adjunct professor of law at Georgetown University and partner at Ward & Ward PLLC, where he serves as international legal adviser to the Charles Taylor/Liberia Asset Recovery Team.