Appeals court weighs Justice deal to settle Iran charges

A federal appeals court on Friday considered whether a judge could reject as too lenient a deal to settle criminal charges against a Dutch company accused of illegally selling aircraft parts to Iran, Sudan and Myanmar.

The U.S. Court of Appeals for the District of Columbia heard arguments in a case involving the Justice Department's decision not to prosecute Fokker Services BV under an agreement that called for $21 million in penalties.

A federal judge earlier this year refused to accept the deal, which he called "grossly disproportionate to the gravity of Fokker Services' conduct in a post-9/11 world."

The dispute comes as the Justice Department this week trumpeted its commitment to hold company executives more accountable for corporate fraud. The new guidance follows persistent criticism that the department has not been aggressive enough in prosecuting individuals for financial misconduct, including after the mortgage crisis that led to an economic meltdown.

The Justice Department says the judge is interfering with the discretion of prosecutors, but that argument faced resistance from the three-judge panel hearing the case. All three appellate judges agreed that courts have some authority to decide whether to accept settlements, though they disagreed over the extent of that authority.

"You have a very steep hill to climb," Judge David Sentelle told Justice Department lawyer Aditya Bamzai during arguments that took place on the 14th anniversary of the Sept. 11 terrorist attacks.