A violation of the Foreign Corrupt Practices Act (FCPA) requires a bribe or attempt to bribe a foreign official. Is an employee of a state owned enterprise a "foreign official" when the government owns the enterprise's shares and appoints its directors and officers? The recipient of the longest sentence in an FCPA case – 15 years – is challenging the U.S. government's expansive definition of foreign officials in an appeal to the 11th circuit in the U.S. The Wall Street Journal summarizes the appeal as follows:
In Esquenazi’s appeal, his lawyers directly challenge whether employees of the state-owned firm, known as Haiti Teleco, are “foreign officials” simply because Haiti’s national bank owned shares and the government appointed board members and directors.
Prosecutors at trial argued that Haiti Teleco served as an “instrumentality” under the law, making its employees “foreign officials.” The district court bought that argument without probing the word’s definition, the appeal says, arguing that the only case to examine an “instrumentality” under the FCPA found that it limited the word to cover “entities that perform governmental functions.
This is significant because few provisions of the FCPA have been subject to judicial scrutiny until recently. Because an FCPA conviction potentially means significant prison time and fines in the millions of dollars, many defendants and targets settled, thereby accepting the Department of Justice's and Securities and Exchange Commission's interpretration of the FCPA. But that is starting to change. In this case, Esquenazi is challenging the U.S. government's claims about what constitutes a "foreign official".
In Thailand, the former governor general of the TAT and her daughter (the Siriwans), have challenged the government's use of other laws to indict a foreign official when a U.S. party has been convicted on FCPA charges for paying that official. For more information on the Siriwans's challenge in the U.S. of the indictment against them, please go the achieve section of the anti-corruption part of our website for several articles on the protracted and not yet finished proceedings in the Central District of California on this challenge. You can find the lead article here.
For a copy of appellate brief filed by Esquenzai's counsel, click here. For more information on the FCPA and Thai anti-corruption laws generally, click here to go the Anti-Corruption section of our website.