There is a big question raised by the Africa Sting indictments.
As explained in the indictments, one FBI special agent posed “as a representative of the Minister of Defense of a country in Africa (Country A)” and another FBI special agent posed “as a procurement officer for Country A’s Ministry of Defense who purportedly reported directly to the Minister of Defense.”
The DOJ release (here) notes that there was “no actual involvement from any minister of defense.”
According to an individual who attended the DOJ press conference announcing the charges, DOJ officials: did not identify the African country; did say (as indicated in the release) that the African country was not involved in the investigation; but would not say whether the African country had knowledge or was aware of the investigation.
Given the above, two scenarios seem possible.
The first is that the Minister of Defense was purely fictitious (for instance John Doe, the Minister of Defense of Uganda, when in reality there is no John Doe Minister of Defense of Uganda). This would seem unlikely as the indicted individuals could have easily figured out that John Doe was not the Minister of Defense of Uganda – thereby compromising the entire sting operation.
The second, and more plausible scenario, is that John Doe was indeed the Minister of Defense of Uganda, but (as noted in the DOJ release) he was not involved, did not participate, and was not actually seeking bribe payments. It would seem though that to avoid compromising the entire sting operation, John Doe may have known that his name was being used.
Why is this a big question?
Because a key element of an FCPA violation is the existence of a “foreign official.”
Whether a fictitious “foreign official” (the first scenario) or a real, but non-participating “foreign official” (the second scenario) the big question is: can offering to bribe or paying a bribe to such a “foreign official” constitute a substantive FCPA violation?
One can only assume that DOJ thought through this obvious legal issue before seeking the indictments and that it presumably concluded that the answer is yes.
But is that the right answer? What does the FCPA actually say?
The key statutory language is the FCPA’s so-called “third-party payment provisions” because, as alleged in the indictments, the bribe payments were paid not directly to the “foreign official,” but rather to the FBI agent the defendants believed to be the sales agent representative of the “foreign official.”
In pertinent part, these provisions prohibit the payment, offer of payment, etc.
to “any person, while knowing that all or a portion of such money or thing of value will be offered, given, or promised, directly or indirectly, to any foreign official […] for purposes of —
(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such foreign official, or (iii) securing any improper advantage; or
(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality.” (emphasis added).
On this issue, the U.S. Attorneys Manual (here) says:
“The payment must be intended to induce the recipient to misuse his official position to direct business wrongfully to the payer or to any other person. The FCPA prohibits any corrupt payment intended to influence any act or decision of a foreign official in his or her official capacity, to induce the official to do or omit to do any act in violation of his or her lawful duty, to obtain any improper advantage, or to induce a foreign official improperly to use his or her influence with other government officials or agencies to affect or influence any act or decision.” (emphasis added).
Thus, the key statutory language (as indicated in the US Attorneys Manual) requires that the payment or offer of payment influence or induce the “foreign official” to do something.
It’s an open question whether one can or seek to influence or induce a fictitious “foreign official” or a real, but non-participating “foreign official.”
Could the “securing any improper advantage” be the hook the DOJ is “hanging its hat on?”
That clause was added to the FCPA in 1998. The legislative history of the 1998 amendments (see here) is not illuminating as to what precisely that clause means. It is clear though that this clause was added to the FCPA to conform the statute to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, specifically Art. 1, para. 1.
Art. 1, Par. 1 of the OECD Convention(see here) would seem to hinge on a foreign official “acting or refraining from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.”
Thus, it would still seem to be an open question whether a fictitious “foreign official” or a real, but non-participating “foreign official” can act or refrain from acting in relation to the performance of official duties in order to obtain or retain business or other improper advantage.
Of course this big question is only relevant to the FCPA charges in the indictment and of course the indictments contain non-FCPA charges as well.