This 2014 post  highlighted Canadian charges against Robert Barra and Shailesh Govindia (individuals previously associated with Cryptometrics) for bribing Indian officials including those associated with Air India.
As highlighted in the below post, a Canadian court recently concluded  that violations under Canada’s FCPA-like law – the Corruption of Foreign Public Officials Act (CFPOA) – are a specific intent offense and that Barra did not know the individual he allegedly bribed was a “foreign public official.”
As further highlighted below, the Canadian court’s specific intent ruling conflicts with certain FCPA jurisprudence while the Canadian court’s ruling regarding knowledge of the status of a “foreign public official” ruling is consistent with certain U.S. jurisprudence – namely U.S. v. Carson – in which the court issued a “knowledge of status of foreign official” jury instruction prior to trial. (See here ).
The court framed the intent and knowledge of the status of the “foreign public official” issues as follows and concluded:
Has the Crown proven beyond a reasonable doubt that Barra knew that the Captain or MAD were Foreign Public Officials?
Bribery is a specific intent offence and I find that the offence under s. 3(1) of the CFPOA is also a specific intent offence.
In Rex v. Smith (1921), 67 D.L.R. 273 (Ont. C.A.) at p. 275, the Court of Appeal dismissed the charge of bribery of a peace officer and held that the mens rea required that the accused must know that the person receiving the bribe was a peace officer. The Court of Appeal stated the following at p. 275: “Knowledge by the accused of the official character of the person to whom the bribe is offered is an essential element of the bribery.”
The evidence does not prove beyond a reasonable doubt that Barra or Berini knew that Captain Macarenhas or MMD or any of the other employees of Air India who received bribes were foreign public officials as defined in the Act. Mr. Bell and Mr. Berini both testified that they believed that the Captain and MMD were employees of Air India which they believed was a Crown Corporation. They were not aware that these employees of Air India were foreign public officials. This was a reasonable inference to make in the circumstances. Air India is not a Crown Corporation and is owned directly by the Indian government, which made the Captain and MMD foreign public officials as defined under the Act.
Disposition of Issue #3
I therefore find that the Crown has failed to prove beyond a reasonable doubt that Mr. Barra had the required mens rea to agree to give a benefit, namely a bribe, to Captain Macarenhas and the other Air India employees, in order to guarantee that the Cryptometrics bid would be down-selected, because he was not aware that they were foreign public officials as defined under the Act.”
For additional coverage of the Canadian decision, see here .
Regarding whether the FCPA is a specific intent offense as applied to individuals, legislative history instructs as follows. In terms of “willfully,” a House Report stated:
“The bill [states that a person] must be found to have violated the law ‘knowingly and willfully.’ Consistent with the often-reiterated holdings of the courts that have interpreted a similar standard in the few places it is included in the federal securities laws, the knowledge required is merely that a defendant be aware that he is committing the act which constitutes the violation – not that he knows his conduct is illegal or has any specific intent to violate the law. […] Indeed, even in the criminal context, neither knowledge of the law violated nor the intention to act in violation of the law is generally necessary for conviction, and the Committee does not intend that either be required here in either civil or criminal proceedings.” (See H.R. Rep. No. 95-640 (1977).
Although not an actual FCPA enforcement action, Stichting v. Schreiber (327 F.3d 173 (2d Cir. 2003) – a civil malpractice case alleging erroneous legal advice by counsel regarding payments to a Panamanian official that caused the entity to violate the FCPA) is instructive on the corrupt intent element of the FCPA’s anti-bribery provisions. In the case, an appellate court analyzed whether a company, in pleading guilty to FCPA anti-bribery violations, acknowledged acting with intent thus undermining its claims that the erroneous legal advice was the basis for its legal exposure. The court stated:
“Knowledge by a defendant that it is violating the FCPA – that it is committing all the elements of an FCPA violation – is not itself an element of the FCPA crime. Federal statutes in which the defendant’s knowledge that he or she is violating the statute is an element of the violation are rare; the FCPA is plainly not such a statute.”
The court also stated that “corruptly” as used in the FCPA:
“[S]ignifies, in addition to the element of ‘general intent’ present in most criminal statutes, a bad or wrongful purpose and an intent to influence a foreign official to misuse his official position. But there is nothing in that word or anything else in the FCPA that indicates that the government must establish that the defendant in fact knew that his conduct violated the FCPA to be guilty of such a violation.”
FCPA mens rea issues were also the focus of an appellate decision in U.S. v. Kay (513 F.3d 432 (5th Cir. 2007)). After a jury convicted the defendants of FCPA anti-bribery violations an appeal followed in which the defendants argued, among other things, that the trial court failed to adequately instruct the jury on mens rea issues.
As stated by the appellate court:
“The [district] court’s instructions to the jury indicated that ‘corruptly’ was an element of the offense and defined a corrupt act as one that is ‘done voluntarily and intentionally, and with a bad purpose or evil motive of accomplishing either an unlawful end or result, or a lawful end or result by some unlawful method or means.’ The [district] court also instructed the jury on the definition of an act done ‘knowingly’ (thus incorporating the willfulness element into its instructions) and defined a knowing act as one ‘done voluntarily and intentionally, not because of accident or mistake.’”
The appellate court concluded:
“The FCPA does not define ‘willfully,’ and we therefore look to the common law interpretation of this term to determine the sufficiency of the jury instructions pertaining to the mens rea element. The definition of ‘willful’ in the criminal context remains unclear despite numerous opinions addressing this issue. Three levels of interpretation have arisen that help to clear the haze. Under all three, a defendant must have acted intentionally—not by accident or mistake. The first and most basic interpretation of criminal willfulness is that committing an act, and having knowledge of that act, is criminal willfulness—provided that the actions fell within the category of actions defined as illegal under the applicable statute. In these cases, the defendant need not have known of the specific terms of the statute or even the existence of the statute. The defendant’s knowledge that he committed the act is sufficient.
The second and ‘intermediate’ level of criminal willfulness requires the defendant to have known that his actions were in some way unlawful. Again, he need not have known of the specific statute, but rather he must have acted with the knowledge that he was doing a ‘bad’ act under the general rules of law. Under this intermediate level of criminal common law willfulness, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful.’
The strictest level of interpretation of criminal willfulness requires that the defendant knew the terms of the statute and that he was violating the statute. The courts have reserved this category to limited types of statutory violations involving ‘complex’ statutes—namely those governing federal tax law and antistructuring transactions. Although [this court] has not addressed the FCPA under this category, [the Schreiber case discussed above] has determined that the FCPA does not fall within this narrow category of complex statutes, and we agree.
The district court’s jury instructions captured both the first and second levels of criminal willfulness […] We find the instructions sufficient, since the strictest interpretation of criminal willfulness is reserved for complex statutes. Under the first and broadest definition of criminal willfulness, the term ‘knowingly’ in the context of willful criminal action ‘merely requires proof of knowledge of the facts that constitute the offense.’ […]
The district court, by instructing the jury that a guilty verdict required a finding that defendant acted ‘voluntarily and intentionally, and with a bad purpose or evil motive of accomplishing either an unlawful end or result,’ and by including a separate ‘knowing’ instruction, correctly indicated that the jury must identify evidence amounting to ‘knowledge of facts that constitute the offense’ required by the traditional criminal definition of willfulness (which we have described as the first category of willfulness). The court’s instructions also substantially covered the requested instruction that Defendants acted ‘corruptly,’ meaning they acted ‘knowingly and dishonestly, with the specific intent to achieve an unlawful result by influencing a foreign public official’s action in one’s own favor.’ The instructions suggested that illegal conduct under the FCPA defined the ‘unlawful end or result’ to which the court referred, since the jury had to have some standard by which to gauge lawfulness. Additionally, the instructions correctly indicated that to be guilty under the Act, Defendants must have knowingly (i.e., voluntarily and intentionally) acted with awareness of these unlawful ends.
We find that the district court’s jury instructions also capture our second, or intermediate, definition of criminal willfulness—a definition that we commonly follow – that a defendant knew that he was doing something generally ‘unlawful’ at the time of his action. This level of interpretation is stricter than the first because it does not only require that the defendant knew that he was committing an act (an act which, incidentally, falls within the definition of the relevant statute); the defendant must have known that the act was in some way wrong. The district court’s jury instructions captured this level of intent well with their requirement that the jury find that Defendants acted ‘with a bad purpose or evil motive.’
The instructions’ requirements that Defendants acted corruptly, with an ‘unlawful end or result,’ and committed ‘intentional’ and ‘knowing’ acts with a bad motive sufficiently captured the definition of criminal willfulness that we follow. They also allowed Defendants to effectively put forth adequate defenses: Defendants could have argued lack of intent and that they were not acting with knowledge of unlawful means or ends. The district court’s jury instructions adequately conveyed the ‘willfulness’ required for a conviction under the FCPA.”
The Canadian court’s knowledge of the status of a “foreign public official” ruling is consistent with certain U.S. jurisprudence – namely U.S. v. Carson – in which the court issued a “knowledge of status of foreign official” jury instruction prior to trial.
In the enforcement action, various former employees of valve manufacturer Control Components Inc. were criminally charged with FCPA violations in connection with alleged payments to employees at alleged SOEs in China, Malaysia, and the United Arab Emirates. After the court denied the defendants’ motion to dismiss challenging the government’s “foreign official” enforcement theory in a manner similar to Esquenazi, the disputed “foreign official” issue moved to the jury instructions and the judge issued a jury instruction titled “knowledge of status of foreign official” which stated, in pertinent part:
“(4) The defendant offered, paid, promised to pay, or authorized the payment of money, or offered, gave, promised to give, or authorized the giving of anything of value to a foreign official;
(5) The payment or gift at issue in element 4 was to (a) a person the defendant knew or believed was a foreign official or (b) any person and the defendant knew that all or a portion of such money or thing of value would be offered, given, or promised (directly or indirectly) to a person the defendant knew or believed to be a foreign official. Belief that an individual was a foreign official does not satisfy this element if the individual was not in fact a foreign official.” (See Order Re: Select Jury Instructions, U.S. v. Carson , No. SACR 09-0007-JVS (C.D. Cal. Feb. 16, 2012).
As highlighted in this prior post , after this jury instruction and the government’s apparent inability to offer proof, the defendants agreed to settle on substantially reduced charges.
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