Court battle between Cognizant and L&T on the bribery scandal continues


Five years after a bribery scandal that roiled Cognizant, the case continues to be an irritant for the IT company.

One of the two top executives indicted in the case, the former legal officer Steven Schwartz, has charged Cognizant with spying on the defense camp. Cognizant has countered the allegation in a New Jersey court that there has never been any such intrusion.

The executives who were charged with foreign bribery are seeking to force an Indian conglomerate to hand over information that could help clear their names, arguing that a New Jersey federal court has
jurisdiction over the conglomerate because it cooperated with U.S. investigators.

The original case, which came to the fore under the previous leadership when it instituted an internal inquiry, alleged Coburn and Schwartz channeled payments to L&T, the construction company responsible for Cognizant’s Chennai campus.

It was alleged that to disguise Cognizant’s repayment to L&T of the bribes the latter paid to government officials, Schwartz and Coburn agreed that L&T would submit many fraudulent changes order requests at the end of the project totaling $2 million.

“L&T Ltd.’s denials establish, beyond question, that it is in possession of material that is exculpatory as to defendants,” Coburn and Schwartz said Tuesday, asking a judge to force the company to comply with a subpoena.

The government received substantial assistance from L&T, according to the heavily redacted filing. But none of the information passed along by prosecutors backs up L&T’s denials of complicity to the press and Indian regulators, the filing said.

“If L&T Ltd. — through leading outside law firms, forensic experts, and consultants — uncovered no evidence of improper payments, it is significantly less likely that a bribe was paid and therefore less likely that the conspiracy of which defendants are accused existed at all,” Coburn and Schwartz said.

L&T has resisted the subpoena by saying it is a foreign company beyond the court’s jurisdiction.

But Coburn and Schwartz said the L&T’s cooperation in the case established jurisdiction, arguing that the company made a “calculated business decision” to work with the Justice Department rather than assert it was beyond the U.S. government’s reach.

Earlier this month, the former executives said Cognizant hired private investigators to interview Schwartz’s former lawyers and communicated with a lead defense investigator, whom they described as a “spy” in their camp. They said these and other actions were part of a “disturbing” pattern of interference related to a dispute over Schwartz’s attorney’s fees, which Cognizant is required to advance.

Coburn and Schwartz are concerned that information gleaned from these alleged “intrusions” into the defense camp could wind up in the hands of prosecutors due to Cognizant’s cooperation with the government, imperiling their due process rights. They asked U.S. District Judge Kevin McNulty to order the government to detail what it knew about these purported efforts by Cognizant and whether prosecutors gleaned any information from them.

Cognizant denied the claims in a letter to the court, saying its lawyers had always acted “professionally and appropriately.”