Lindsey Manufacturing Judge Tentatively Dismisses Executives’ Bribery Case

Two Lindsey Manufacturing Co. executives won a tentative ruling dismissing their convictions on charges that they bribed officials at a Mexican state-owned utility.

U.S. District Judge Howard Matz in Los Angeles issued the order at a hearing today dismissing the case against Keith Lindsey, president of the closely held maker of emergency electricity towers, and Steve Lee, its finance chief. The judge cited government misconduct including providing false information to get a search warrant, making unauthorized searches and giving incorrect testimony to a grand jury.

Jeffrey Goldberg, a Justice Department lawyer, told the judge the prosecution made honest mistakes that didn’t call for a misconduct finding.

“We regret those mistakes,” Goldberg said. “We strive to get it right every time, and in this case we didn’t get it right every time.”

Matz said he would issue a final order tomorrow without indicating what if any changes he might make.

A jury in May found Lindsey and Lee guilty of violating the Foreign Corrupt Practices Act. The defendants faced as long as five years in prison for each of five counts of bribing a foreign official, as well as five years for a conspiracy count.

Prosecutors’ Claims

Prosecutors said the men knew that a 30 percent sales commission they paid Enrique Aguilar, a Mexican company representative, was used to cover more than $5 million in bribes to officials at Comision Federal de Electricidad.

Lindsey Manufacturing, based in Azusa, California, retained Aguilar in 2002 after repeatedly failing to win contracts legitimately in previous years, prosecutors claimed.

“The government is fond of saying that the courts should send a message to people who might commit a crime,” Jan Handzlik, a lawyer for the defendants, said after the hearing. “This court has sent a message that there should be fairness and justice in the process.”

Handzlik said prosecutors “purposefully and deliberately” withheld from the defense transcripts of an investigator’s testimony before a grand jury because they wanted to hide the misstatements the investigator had made.

“We are awaiting the court’s final ruling, and we will carefully review the order to consider appropriate steps,” Thom Mrozek, a spokesman for the U.S. attorney in Los Angeles, said in an e-mailed statement.

The case is U.S. v. Aguilar, 10-1031, U.S. District Court, Central District of California (Los Angeles).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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