MARC SIEGEL (CSBN 142071)
DANA R. WAGNER (CSBN 209099)
U.S. Department of Justice
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, CA 94102
Telephone: (415) 436-6660
Attorneys for the United States
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
UNITED STATES OF AMERICA,
|No. CR 03-0035 SI
Original Filed 3/11/03
The United States of America and HOECHST AKTIENGESELLSCHAFT ("HOECHST"), a corporation organized and existing under the laws of the Federal Republic of Germany, hereby enter into the following Plea Agreement under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure ("Fed. R. Crim. P."):
RIGHTS OF DEFENDANT
1. HOECHST understands its rights:
WAIVER OF RIGHTS AND OFFENSE CHARGED
- To be represented by an attorney;
- To be charged by Indictment;
- To plead not guilty to any criminal charge brought against it;
- To have a trial by jury, at which it would be presumed not guilty of the charged offense and the United States would have to prove every essential element of the charged offense beyond a reasonable doubt for it to be found guilty;
- To confront and cross-examine witnesses against it and to subpoena witnesses in its defense at trial;
- To be charged within five years of the date of the offense in a State and District where the offense occurred;
- To appeal its conviction if it is found guilty at trial;
- To appeal the imposition of sentence against it; and
- As a corporation organized and existing under the laws of the Federal Republic of Germany, to decline to accept service of the Summons in this case, and to contest the jurisdiction of the United States to prosecute this case against it in United States District Court.
2. HOECHST waives the rights set out in Paragraph 1(b)-(g). HOECHST also waives the right to appeal the imposition of sentence against it so long as the sentence imposed is consistent with the recommendation in Paragraph 8. Further, HOECHST agrees, solely for this case and for this limited purpose only, not to contest the jurisdiction of the United States to prosecute this case against it in United States District Court. Under Rule 7(b), Fed. R. Crim. P., HOECHST will waive indictment. It will plead guilty to a one-count Information filed in the United States District Court for the Northern District of California. The Information will charge HOECHST with participating in a conspiracy to suppress and eliminate competition by fixing the prices and allocating market shares of monochloroacetic acid and sodium monochloroacetate (collectively referred to as "MCAA") to be sold in the United States and elsewhere, beginning in or about September 1995 and continuing until in or about June 1997, in violation of the Sherman Antitrust Act, 15 U.S.C. § 1.
3. Under the terms of this Plea Agreement, HOECHST will plead guilty to the criminal charge described in Paragraph 2 and will make a factual admission of guilt to the Court in accordance with Rule 11, Fed. R. Crim. P., as set forth in Paragraph 4.
FACTUAL BASIS FOR OFFENSE CHARGED
4. Had this case gone to trial, the United States would have presented evidence to prove the following facts:
- For purposes of this Plea Agreement, the "Relevant Period" begins in or about September 1995 and continues until in or about June 1997. During the Relevant Period, HOECHST was a corporation organized and existing under the laws of the Federal Republic of Germany. HOECHST has its principal place of business in Frankfurt, Germany. During the Relevant Period, HOECHST was a producer of MCAA and exported MCAA into the United States. MCAA is a reactive compound used to form a number of intermediate industrial chemicals. Markets for MCAA and its derivatives include plastic additives, herbicides, and cosmetics;
- During the Relevant Period, HOECHST, through several of its executives or employees, participated in a conspiracy among major MCAA producers, the primary terms of which were to fix the prices and allocate the market shares of MCAA to be sold in the United States and elsewhere. In furtherance of the conspiracy, HOECHST, through several of its executives or employees, engaged in discussions and attended meetings with representatives of other major MCAA producers. During these discussions and meetings, agreements were reached to fix the prices and allocate the market shares for MCAA to be sold in the United States and elsewhere; and
- During the Relevant Period, MCAA sold by one or more of the conspirator firms, and equipment and supplies necessary to the production and distribution of MCAA, as well as payments for MCAA, traveled in interstate and foreign commerce. The business activities of HOECHST and its coconspirators in connection with the production and sale of MCAA affected by this conspiracy substantially affected interstate and foreign trade and commerce, and the MCAA affected by this conspiracy was within the flow of interstate and foreign trade and commerce.
POSSIBLE MAXIMUM SENTENCE
5. HOECHST understands that, pursuant to 18 U.S.C. § 3571, the maximum penalty that may be imposed against it upon conviction for a violation of the Sherman Antitrust Act is a fine equal to the largest of:
- $10 million (15 U.S.C. § 1);
- Twice the gross pecuniary gain the conspirators derived from the crime; or
- Twice the gross pecuniary loss caused to the victims of the crime.
6. In addition, HOECHST understands that:
- Under § 8B1.1(a)(2) of the United States Sentencing Commission Guidelines ("U.S.S.G."), the Court may order it to pay restitution
to the victims of the offense;
- Under 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, the Court is required to order HOECHST to pay a $400 special assessment upon conviction for the charged crime; and
- Under 18 U.S.C. § 3561(c)(1), the Court may impose a term of probation of at least one year and not more than five years.
7. Sentencing for the offense to be charged will be conducted based on the U.S.S.G. Manual in effect on the day of sentencing. Under U.S.S.G. § 1B1.8, self-incriminating information provided to the United States under this Plea Agreement will not be used to increase the volume of affected commerce attributable to HOECHST or in determining the applicable Guidelines range, except to the extent provided for in U.S.S.G. § 1B1.8(b).
8. Under Rule 11(c)(1)(C), Fed. R. Crim. P., the United States and HOECHST agree that the appropriate disposition of the case is, and agree jointly to recommend that the Court impose, under 18 U.S.C. § 3571(d), a sentence requiring HOECHST to pay to the United States a fine of twelve million dollars ($12 million), payable in full before the fifteenth day after the date of judgment, with no term of probation.
- HOECHST understands that the Court will order it to pay a $400 special assessment, under 18 U.S.C. § 3013(a)(2)(B) and U.S.S.G. § 8E1.1, in addition to any fine imposed;
- The United States and HOECHST jointly submit that this Plea Agreement, together with the record that will be created by the United States and HOECHST at the plea and sentencing hearings, and the further disclosure described in Paragraph 9, will provide sufficient information concerning HOECHST, the offense charged in this case, and HOECHST's role in the offense to enable the meaningful exercise of sentencing authority by the Court under 18 U.S.C. § 3553. The United States will not object to HOECHST's request that the Court accept HOECHST's plea of guilty and impose sentence on an expedited schedule as early as the date of arraignment, based upon the record provided by HOECHST and the United States, under the provisions of Rule 32(c)(1)(A)(ii), Fed. R. Crim. P., U.S.S.G. § 6A1.1, and Rule 32-1(b) of the Criminal Local Rules. The Court's denial of the request to impose sentence on an expedited schedule will not void this Plea Agreement;
- Section 5K2.0 of the U.S.S.G. provides for a sentence above the range established by the applicable guideline if there exists an aggravating circumstance not adequately taken into consideration in the Guidelines. The United States will make a motion pursuant to U.S.S.G. § 5K2.0 requesting that the Court make an upward departure from the sentence calculated pursuant to the Guidelines and impose the agreed-upon sentence set out above. Defendant HOECHST has previously been convicted of one antitrust conspiracy. Because the Guidelines do not explicitly provide for an increased sentence for that conviction, the applicable Guidelines range does not adequately account for HOECHST's prior history and, on that basis, an upward departure is appropriate in this case; and
- The United States and HOECHST understand that the Court retains complete discretion to accept or reject the agreed-upon sentence in this Plea Agreement. If the Court does not accept the agreed-upon sentence, this Plea Agreement will be void and HOECHST will be free to withdraw its guilty plea (Fed. R. Crim. P. 11(d)(2)(A)). If HOECHST does withdraw its plea of guilty, this Plea Agreement, the guilty plea, and any statements made in connection with or in furtherance of the plea or this Plea Agreement, or in the course of discussions leading to the plea or this Plea Agreement, shall not be admissible against HOECHST in any criminal or civil proceeding (Fed. R. Crim. P. 11(f) and Fed.R.Evid. 410).
9. Subject to the ongoing, full, and truthful cooperation of HOECHST described in Paragraph 11, and before sentencing in the case, the United States will fully advise the Court of the fact, manner, and extent of HOECHST's ongoing cooperation with the United States' investigation and prosecutions, all material facts relating to HOECHST's involvement in the charged offense, and all other relevant conduct.
10. In light of the availability of civil causes of action, which potentially provide for a recovery of a multiple of actual damages, and at least one of which has already been filed, see Crompton Corp. v. Clariant Corp., No. 01-84-B-M2 (M.D. La. filed Jan. 24, 2001), the United States agrees that it will not seek a restitution order for the offense charged in the Information.
11. HOECHST and its Related Entities (for the purposes of this Plea Agreement, "Related Entities" shall refer collectively to HOECHST's subsidiaries that have engaged in the sale or production of MCAA and to HOECHST's successors) will fully and truthfully cooperate with the United States in the prosecution of this case, the current federal investigation of violations of federal antitrust and related criminal laws in the MCAA industry, any other federal investigation resulting from these current investigations, and any litigation or other proceedings arising or resulting from any such investigation to which the United States is a party ("Federal Proceeding"). This cooperation shall consist of:
- Producing to the United States all non-privileged documents, information, and other materials, wherever located, in the possession,
custody, or control of HOECHST, or any of its Related Entities, requested by the United States in connection with any Federal Proceeding; and
- Using its best efforts to secure the ongoing, full, and truthful cooperation, as defined in Paragraph 12, of the current and former directors,
officers, or employees of HOECHST or any of its Related Entities (excluding Gerard Duwe, Rainier Grubert, and Dieter Heck), including making these persons available in the United States and at other mutually agreed-upon locations, at HOECHST's expense, for interviews and testimony in grand jury, trial, and other judicial proceedings in connection with any Federal Proceeding.
12. The ongoing, full, and truthful cooperation of each person described in
Paragraph 11(b) will be subject to the procedures and protections of this paragraph,
and shall consist of:
- Producing in the United States and at other mutually agreed-upon locations all non-privileged documents, including claimed personal documents, and other materials requested by the United States;
- Making himself or herself available for interviews in the United States and at other mutually agreed-upon locations, upon the request of the United States;
- Responding fully and truthfully to all inquiries of the United States in connection with any Federal Proceeding, without falsely implicating any person or intentionally withholding any non-privileged information, subject to the penalties of making false statements or declarations (18 U.S.C. § 1001) or obstruction of justice (18 U.S.C. § 1503);
- Otherwise voluntarily providing the United States with any non-privileged materials or information not requested in (a) - (c) of this paragraph that he or she may have that is related to any Federal Proceeding; and
- When called upon to do so by the United States in connection with any Federal Proceeding, testifying in grand jury, trial, and other judicial proceedings in the United States fully, truthfully, and under oath, subject to the penalties of perjury (18 U.S.C. § 1621), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), and contempt (18 U.S.C. §§ 401-402).
13. The United States agrees to the following:
- Upon acceptance of the guilty plea called for by this Plea Agreement and imposition of the agreed-upon sentence, and subject to the exceptions noted in Paragraph 13(c), the United States will not bring criminal charges against any current or former director, officer, or employee of HOECHST or its Related Entities for any act or offense committed before the Court's acceptance of this Plea Agreement and while that person was acting as a director, officer, or employee of HOECHST or its Related Entities that was undertaken in furtherance of an attempted or completed antitrust conspiracy involving the manufacture or sale of MCAA ("Relevant Offense"), except that the protections granted in this paragraph shall not apply to Gerard Duwe, Rainier Grubert, or Dieter Heck;
- Should the United States determine that any current or former director, officer, or employee of HOECHST or its Related Entities has information relevant to any Federal Proceeding, the United States may request that person's cooperation under the terms of this Plea Agreement by written request delivered to counsel for the individual (with a copy to the undersigned counsel for HOECHST) or, if the individual is not known by the United States to be represented, to the undersigned counsel for HOECHST;
- If any person requested to provide cooperation under Paragraph 13(b) fails to comply with his or her obligations under Paragraph 12, then the terms of this Plea Agreement as they pertain to that person, and the agreement not to prosecute that person in this Plea Agreement, shall be rendered void;
- Except as provided in Paragraph 13(e), information provided by a person described in Paragraph 13(b) to the United States under the terms of this Plea Agreement pertaining to any Relevant Offense, or any information directly or indirectly derived from that information, may not be used in a criminal case against that person, except in a prosecution for perjury (18 U.S.C. § 1621), making a false statement or declaration (18 U.S.C. §§ 1001, 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402);
- If any person who provides information to the United States under this Plea Agreement fails to comply fully with his or her obligations under Paragraph 12 of this Plea Agreement, the agreement in Paragraph 13(d) not to use that information or any information directly or indirectly derived from it against that person in a criminal case shall be rendered void;
- The non-prosecution terms of this paragraph do not apply to any civil liability to the United States, to any violation of the federal tax or securities laws, or to any crime of violence; and
- Documents provided under Paragraphs 11(a) and 12(a) shall be deemed responsive to outstanding grand jury subpoenas issued to HOECHST or any of its Related Entities.
14. Upon acceptance of the guilty plea called for by this Plea Agreement and imposition of the agreed-upon sentence, and subject to the cooperation requirements of Paragraph 11, the United States agrees that it will not bring further criminal charges against HOECHST or any of its Related Entities for any Relevant Offense committed before the Court's acceptance of this Plea Agreement. The non-prosecution terms of this paragraph do not apply to any civil liability to the United States, to any violation of the federal tax or securities laws, or to any crime
15. The United States agrees that, when any person travels to the United States for interviews, grand jury appearances, or court appearances under this Plea Agreement, the United States will take no action, based upon any offense subject to this Plea Agreement, to subject that person to arrest, service of process, or prevention from departing the United States. This paragraph does not apply to an individual's commission of perjury (18 U.S.C. § 1621), making false statements or declarations (18 U.S.C. § 1001), making false statements or declarations in grand jury or court proceedings (18 U.S.C. § 1623), obstruction of justice (18 U.S.C. § 1503), or contempt (18 U.S.C. §§ 401-402) in connection with any testimony provided under this Plea Agreement in trial, grand jury or other judicial proceedings in the United States.
16. HOECHST understands that it may be subject to administrative action by federal or state agencies other than the United States Department of Justice, Antitrust Division, based upon convictions resulting from this Plea Agreement, and that this Plea Agreement in no way controls whatever action, if any, other agencies may take. However, the United States agrees that, if requested, it will advise the appropriate officials of any governmental agency considering administrative action against HOECHST based upon any conviction resulting from this Plea Agreement of the fact, manner, and extent of the cooperation of HOECHST and its Related Entities as a matter for that agency to consider before determining what administrative action, if any, to take.
REPRESENTATION BY COUNSEL
17. HOECHST has been represented by counsel and is fully satisfied that its attorneys have provided competent legal representation. HOECHST has thoroughly reviewed this Plea Agreement and acknowledges that counsel has advised it of the nature of the charge, any possible defenses to the charge, and the nature and range of possible sentences.
18. HOECHST's decision to enter into this Plea Agreement and to tender a plea of guilty is freely and voluntarily made and is not the result of force, threats, assurances, promises, or representations other than the representations contained in this Plea Agreement. The United States has made no promises or representations to HOECHST as to whether the Court will accept or reject this Plea Agreement.
VIOLATION OF PLEA AGREEMENT
19. HOECHST agrees that should the United States determine in good faith, during the period any Federal Proceeding is pending, that HOECHST has failed to provide full cooperation, as described in Paragraph 11, or has otherwise violated any other provision of this Plea Agreement, the United States may notify counsel for HOECHST in writing by personal or overnight delivery or by facsimile transmission of its intention to void its obligations under this Plea Agreement (except its obligations under this paragraph). HOECHST may seek court review of any determination made by the United States under this paragraph.
ENTIRETY OF AGREEMENT
20. This Plea Agreement constitutes the entire agreement between the United States and HOECHST concerning the disposition of the criminal charge in this case. This Plea Agreement cannot be modified except in writing, signed by the United States and HOECHST.
21. The undersigned are authorized to enter this Plea Agreement on behalf of HOECHST as evidenced by the certification in the Commercial Register of the Lower Court of Frankfurt am Main Section B, under the number 14500 for the company Hoechst Aktiengesellschaft, attached to, and incorporated by reference in, this Plea Agreement.
23. A facsimile signature shall be deemed an original signature for the purpose of executing this Plea Agreement.
DATED: January 20, 2003
Dr. Thomas Kühlhorn
Dr. Helmut Müller
U.S. DEPARTMENT OF JUSTICE|
Dana R. Wagner
450 Golden Gate Avenue
Box 36046, Room 10-0101
San Francisco, California 94102
COUNSEL FOR HOECHST
Harold D. Murry, Jr., Esq.
Baker & Botts L.L.P.
1299 Pennsylvania Avenue, N.W.
Washington, D.C. 20004