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How Should the District Court in Siriwan Interpret Thailand’s Response to the US Government’s Extradition Request?

Today’s post is from Mike Dearington, a third-year law student at Vanderbilt University Law School.  The post concerns the DOJ’s FCPA-related enforcement action against the “foreign officials” in the Gerald and Patricia Green enforcement action. Dearington previously authored guests posts here and here on the action and provides an update below.

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How Should the District Court in Siriwan Interpret Thailand’s Response to the US Government’s Extradition Request?

Prosecutors in United States v. Siriwan filed a response last week (here) to address arguments raised by the Siriwans in mid-January.  Arguing against dismissal, prosecutors advanced the government’s position that Thailand’s responses to the US extradition request indicate that “Thailand has not asserted sole jurisdiction” over the Siriwans.

To recap, the Siriwan case has garnered significant attention because of the government’s novel prosecution tactic:  In 2009, prosecutors charged Juthamas Siriwan, ex-Governor of Tourism Authority of Thailand, as well as her daughter Jittisopa, with money laundering in connection with alleged bribe receipts remitted by Gerald and Patricia Green (see here for the prior FCPA Professor post).  The FCPA cannot reach Juthamas Siriwan because she is a foreign official, a limitation pronounced in United States v. Castle.  Thus, prosecutors charged Siriwan with money laundering in promotion of bribery in hopes of avoiding the FCPA’s shortcoming—a tactic the defense deemed a “novel and untested . . . theory.”

But prosecutors face a hurdle in what Judge Wu has called “a very important case in an area which is very, very difficult.”  Indeed, in a January 2012 hearing on the defendants’ motion to dismiss, Judge Wu expressed reluctance with “the government’s position that [it] can somehow get around” the FCPA by charging defendants under the Money Laundering Control Act (MLCA).  But an additional hurdle stands in the way of the court even reaching this money-laundering issue.

That hurdle is the United States’ treaty with Thailand.  In the January 2012 hearing, Judge Wu stated:

“I would not feel comfortable reaching final conclusions until I figure out or unless I am informed how the government of Thailand is viewing the situation . . . .  [I]f Thailand says it’s not going to extradite, I will find that Thailand has a dominant interest . . . because they will have expressed it to me in no uncertain terms.  If they agree to the extradition, then all of the issues are open and that means I’ll have to decide them all.”

In sum, the court suggested it might not reach a decision on whether prosecutors can proceed under an MLCA theory until the court first decides whether Thailand has a dominant interest or not.

To complicate matters, Thailand has neither agreed to, nor rejected, the government’s extradition request.  By July 2012, Thailand had made no response to US overtures. Finally, in November 2012, the Acting Thai Attorney General notified prosecutors that it was gathering evidence to charge the Siriwans and “must postpone the extradition process” pursuant to the treaty.  And in December 2012, Thailand’s Ministry of Foreign Affairs informed the US Embassy that a “criminal case will be filed” against Siriwan and therefore extradition proceedings “must be postponed . . . .”

Thus, the determinative question at this stage is how the court will interpret Thailand’s response.  On one hand, based on the court’s statements in January 2012, if the court views Thailand’s response and postponement of extradition proceedings as an expression of sole jurisdiction and a refusal to extradite, it will probably dismiss the indictment finding that Thailand has a dominant interest.  In support of dismissal, the defense argued in January that Thailand has expressed “sovereign interest,” and that Thailand’s position and “official[]” postponement “suggest[] the Thai government feels that extradition and prosecution here ‘may affect the international relation.’”

On the other hand, if the court views Thailand’s response not as a refusal, but as a mere delay, the case will likely remain on the court’s docket at least until the Thai Attorney General’s Office concludes its investigation and prosecution.  In the government’s filing last week, prosecutors argued that Thailand has “not made any . . . notification . . . nor has it otherwise signaled that international relations may be impaired . . . by the government’s prosecution.”  Of Thailand’s position, prosecutors stated “Thailand asserts no definitive position on any aspect of the government’s extradition request. . . . Thailand’s only affirmative statement is that it is postponing review of the request for the time being.”  Prosecutors accused the defense of “tr[ying] again and again to invent and interject into this case a conflict with Thailand that, in fact, does not exist,” and also of “inappropriately asserting self-serving and unfounded claims on behalf of Thailand.”

The court will need to first decide the jurisdiction question before even reaching, if at all, the legitimacy of prosecutors’ MLCA theory.  Even if the court ultimately approves the theory, however, the Siriwan proceeding portends the delays and difficulties treaties might pose for the government in seeking to prosecute foreign officials in the future.  A hearing on these issues is scheduled for February 21.

Prosecutors Stymied By Thai Attorney General’s Office In Siriwan Case

This post is from Mike Dearington (a third-year law student at Vanderbilt University Law School) who discusses the DOJ’s FCPA-related enforcement action against the “foreign officials” in the Gerald and Patricia Green enforcement action.  Dearington previously authored this guest post on the action and provides an update below.

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Prosecutors Stymied by Thai Attorney General’s Office in Siriwan Case

Mike Dearington

Take a break from digesting the recently released FCPA guidance to read about happenings in a more remote region of the FCPA world.  For the second time since July, the court in United States v. Siriwan has asked the DOJ to show its cards with respect to its extradition request to Thailand.

Siriwan involves charges that Juthamas Siriwan, ex-governor of Tourism Authority of Thailand, and her daughter, Jittisopa, accepted bribes from Hollywood movie executives Gerald and Patricia Green in exchange for contracts.  Prosecutors face a substantial hurdle in convincing the court that their novel use of the money‑laundering statute (MLCA) to prosecute the Siriwans is permissible even when the defendants are foreign officials otherwise outside the reach of the FCPA.  But based on a November 15 filing (here), prosecutors apparently face a separate hurdle in convincing the court to even reach the merits.  This is because, despite the government’s request, Thailand appears unprepared to extradite the Siriwans.

In July, the government reluctantly revealed that it had “not yet received a response from Thailand regarding extradition.”  The government has finally received its response.  Prosecutors filed a status report this past Thursday updating the court about the government’s struggle to obtain extradition from the Kingdom of Thailand.  Appended to the government’s status report is a translated letter from Thavorn Panichpant, Acting Thai Attorney General, stating that Thailand is “in the process of gathering further evidences [sic] before completing the investigation in order to bring both offenders to court to be formally charged. Hence, we must postpone the extradition of both [defendants] as requested by the U.S. Government, according to the Extradition Act . . . .”

The government has interpreted “postpone” as an indication that Thailand may be willing to ultimately extradite the Siriwans.  Prosecutors appended a letter from the US Office of Law Enforcement and Intelligence, a unit of the Department of State’s Office of the Legal Adviser, interpreting the Thai Acting Attorney General’s letter, “not as a rejection, nor an assertion of jurisdiction over this matter . . . .”  And in its brief, the prosecution argued that Thailand’s response “does not constitute a denial of the government’s extradition request.”  Nonetheless, it appears that Thailand’s response poses serious problems for prosecutors.

First, after reading the letter, the court may decline to exercise jurisdiction over the Siriwans in consideration of “the comity of nations.”  In Hilton v. Guyot, the Supreme Court in 1895 described comity, not as “a matter of absolute obligation . . . nor of mere courtesy and good will,” but rather as a “recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation . . . .”

Second, the court may decline to exercise jurisdiction based on the international-law principle of “reasonableness.”  Section 403 of The Restatement (Third) of Foreign Relations suggests, “[A] state may not exercise jurisdiction to prescribe law with respect to a person or activity having connections with another state when the exercise of such jurisdiction is unreasonable.”  One of The Restatement’s reasonableness factors is “the extent to which another state may have an interest in regulating the activity,” a factor that weighs heavily in the Siriwans’ favor since the Thai Attorney General’s Office has expressed an interest in prosecuting the Siriwans domestically.

If the court decides to dismiss the action, it will probably operate as a dismissal with prejudice, even if dismissed without prejudice.  The statute of limitations for money laundering under § 1956 is five years, and the most recent act of money laundering allegedly occurred in March 2006.  Although the Ninth Circuit has yet to rule on the issue, courts in the Central District of California have typically held that, absent a savings clause, a statute of limitations continues to run despite a dismissal without prejudice, as if the original complaint had never been filed.  See, e.g., Sperling v. White (C.D. Cal. 1998). 

The letter from the Thai Attorney General’s Office could have a substantial impact on the DOJ’s efforts to curb foreign bribery.  If the court decides to dismiss the action, not only will prosecutors lose the opportunity to prosecute the Siriwans, but the DOJ will also lose the opportunity to test its novel prosecution theory that would allow it to hold foreign officials accountable for bribery via the money-laundering statute.  If the court dismisses the action, we can expect prosecutors to appeal such a dismissal as a final order.

U.S. v. Siriwan Filing Sheds Light On Extradition Relations With Thailand In Pivotal Justice Department Case

Today’s post is from Mike Dearington, a rising 3L at Vanderbilt Law School and FCPA Professor reader.

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U.S. v. Siriwan Filing Sheds Light on Extradition Relations with Thailand in Pivotal Justice Department Case

Prosecutors in United States v. Siriwan submitted an extradition status report (here) last Friday in the Central District of California, revealing a potentially strained diplomatic relationship between officials in the U.S. and the Thai Attorney General’s office.  Prosecutors charged Juthamas Siriwan, ex-governor of Tourism Authority of Thailand, and her daughter, Jittisopa, in 2009 with accepting bribes from Hollywood movie executives Gerald and Patricia Green in exchange for lucrative contracts.  (See here for the previous FCPA Professor post.)  The Greens were convicted in 2010 and sentenced to six months imprisonment.  (See here for the previous post.)

In the DOJ’s filing, prosecutors expressed discomfort with providing an extradition-status update pursuant to court order, which they noted was “highly unusual in a public setting and strongly discouraged for many policy and case specific reasons.”  One of these reasons, no doubt, was that the status update forced prosecutors to admit that the U.S. “has not yet received a response from Thailand regarding extradition.”

The Siriwan case is interesting also because it could be instrumental to DOJ efforts to curb foreign bribery, as it is an example of prosecutors uniquely targeting a “foreign official.”  One of the oft-cited shortcomings of the FCPA is that it is purely a “supply side” enforcement scheme.  In other words, the FCPA targets only those paying bribes, and does not prohibit receipt of such bribes by the foreign officials who demand them.

Indeed, critics have declared that, by targeting only the supply side, the law fails to appreciate the nature of foreign bribery.  Bribery is not economically beneficial to corporations because of the risks and costs, yet corporate representatives nonetheless often pay bribes because they are economically extorted by foreign officials.  Officials like Siriwan have been known to set the bidding process and are often first to broach the subject because of their powerful bargaining positions.  Although the FCPA prohibits only bribe payments—and not receipts—the Siriwan case is somewhat of a DOJ workaround.

In Siriwan, prosecutors did not charge FCPA violations, as the Siriwans made no bribery payments.  But prosecutors did charge substantive money-laundering.  The Money Laundering Control Act (MLCA) prohibits the conveyance of funds to or from the U.S. “with the intent to promote the carrying on of specified unlawful activity.”  Just what unlawful activity qualifies is an open question here.

Prosecutors argue that the Greens’ bribe payments represent specified unlawful activity, as do the Siriwans’ violations of Thai laws.  On the other hand, the Siriwans contend the money-laundering charges are pulling “double duty” and that one cannot promote illegal payments by receiving illegal payments.  The Siriwans’ motion to dismiss (see here for the prior post) has been pending since August 2011.

Siriwan may determine whether money-laundering is a viable tactic in the DOJ’s efforts to curb foreign bribery.  The DOJ has expressed an interest in demand-side prosecutions.  In 2009, prosecutors charged Robert Antoine and Jean Rene Duperval, formerly of Haiti Teleco, a state-owned national telecommunications company, with money laundering after each allegedly accepted bribes.  (See here for the prior post.)  Antoine pled guilty and was sentenced to four years in prison; Duperval was convicted and sentenced to nine years in prison in May 2012.

If prosecutors prevail in Siriwan, we can expect the DOJ to pursue a greater number of foreign officials under the MLCA, reminiscent of the way prosecutors pursued foreign executives in the 1990s/2000s under U.S. Antitrust laws due to a lag in foreign anti-trust enforcement.  If U.S. prosecutors can bring foreign officials within their purview, the DOJ may have more tools to reign in foreign bribery.

From the Dockets

This post details developments as to FCPA or related litigation previously reported.

Haiti Teleco Case

Previous posts (here and here)  detailed Joe Esquenazi’s and Carlos Rodriguez’s motion for acquittal or a new trial based on statements made (and then seemingly retracted) by Jean Max Bellerive (Prime Minister of Haiti) concerning the ownership of Haiti Teleco – the entity at the middle of the bribery scheme.  In the DOJ’s response (here) to the defendants’ motion, the DOJ argues, among other things, that “the Government did not seek the first Bellerive declaration from the Republic of Haiti, and there is no need for an evidentiary hearing as to when or how the Government obtained it.”  As to the second Bellerive declaration, the DOJ stated that “the Government assisted Mr. Bellerive in preparing the declaration” in which Bellerive, as noted in the prior post, stated that the first declaration was strictly for internal purposes and he did not know it was going to be used in criminal legal proceedings in the U.S. or that it was going to be used in support of the argument that Teleco was not part of Public Administration of Haiti.

Substantively, the DOJ argues that the first Bellerive declaration does not “contain newly discovered evidence” because the jury “heard most of” the points addressed in the first Bellerive declaration from Garry Lissade, the DOJ’s expert witness, who testified as to the legal status of Haiti Teleco after “he conducted extensive research, including legal research and interviews, in reaching his conclusions.”

The DOJ’s position in many FCPA enforcement actions concerning state-owned or state-controlled entities seems to be that the ownership structure of the entity at issue should be obvious and easily ascertainable to defendants.  If so, why did Lissade (Haiti’s former Minister of Justice) have to “conduct extensive research, including legal research and interviews, in reaching his conclusion” that Teleco was a Haitian public entity?

Africa Sting Case

The second Africa Sting trial involving defendants John Mushriqui, Jeana Mushriqui, R. Patrick Caldwell, Stephen Giordanella, John Godsey, and Marc Morales is set to begin on September 22nd.  The second trial will be more narrowly focused than the first Africa Sting trial that resulted in a mistrial (as well as dismissal of certain counts including money laundering conspiracy charges).

Why?  Because the DOJ did not oppose defendants’ motion to dismiss the money laundering conspiracy charges.  In pre-trial briefing, the DOJ stated as follows.  “At the conclusion of the government’s case-in-chief in the first trial, the Court granted a motion for judgment of acquittal on Count Forty-Four of the Superseding Indictment with respect to the defendants in the first trial. The government continues to believe that the Court should not have granted the motion and that Count Forty-Four should have been submitted to the jury. But the government understands the Court’s ruling and will not object to the Defendant’s motion. The government’s position in this filing recognizes the Court’s past ruling, and in no way suggests that the government will not seek to bring similar charges in future cases.”

Siriwan “Foreign Official” Case

A previous post (here) detailed how Juthamas Siriwan and Jittisopa Siriwan (the “foreign officials” in the Green FCPA enforcement action) were fighting back against DOJ criminal charges.  As noted in the post, the Siriwans argued as follows.  “This is the first judicial challenge to a novel prosecutorial approach the Government recently developed to charge foreign officials allegedly involved in corruption.  That approach is aimed at overcoming a fundamental FCPA limitation.  The FCPA does not criminalize a foreign public official’s receipt of a bribe.  Nor can the Government employ an FCPA conspiracy charge against a foreign public official.  Accordingly, these new enforcement initiatives require expansive interpretations [of] “promotion money laundering” [under the Money Laundering Control Act].”  The Siriwans further argued as follows.  “Congress has extensively amended the FCPA, yet it deliberately has not extended FCPA liability to foreign officials.  If the Government wishes to extend U.S. criminal penalties to foreign officials accepting a bribe, it must go back to Congress, rather than employ dubious charging tactics to evade the direct and repeated congressional choice not to apply FCPA criminal liability to such officials.”

In its opposition brief (here) filed last week, the DOJ stated as follows.  “Upon analysis of defendants’ arguments, it is quickly evident that, in support of their positions, defendants routinely conflate and confuse multiple statutes, interpret and argue the elements of uncharged statutes, and ignore case law relevant to the statutes actually charged.”  Among other things, the DOJ stated as follows.  “That foreign officials cannot face liability for FCPA offenses does not give foreign officials a free pass to commit other, entirely separate, crimes.”  The DOJ noted that the Siriwans are not charged with accepting a bribe, or conspiring to violate the FCPA, but rather with “the separate, and entirely analytically distinct, crime of international transportation money laundering to promote the Greens’ violation of the FCPA.”  The DOJ noted that just because Siriwan “was a foreign official at the time of these offenses, and therefore, not charged under the FCPA does not change the analysis.”

As reported by Samuel Rubenfeld at Wall Street Journal Corruption Currents, a hearing on Siriwans’ motion to dismiss is scheduled for Oct. 20.

A “Foreign Official” Fights Back

The Foreign Corrupt Practices Act addresses the payment of bribes, not the receipt of bribes.

For instance, in U.S. v. Castle, 925 F.2d 831 (5th Cir. 1991), the court was called upon to consider whether “foreign officials” who are excluded from prosecution under the FCPA itself, could nevertheless be prosecuted under the general conspiracy statute (18 USC 371) for conspiring to violate the FCPA.  The court held that “foreign officials”  could not be prosecuted for conspiring to violate the FCPA and adopted the rationale set forth in the trial court opinion (see 741 F.Supp. 116).   That rationale was that Congress, in passing the FCPA, only chose to punish one party to the bribe agreement and the DOJ could not therefore  “override the Congressional intent not to prosecute foreign officials for their participation in the prohibited acts” through use of the conspiracy statute.  The trial court stated as follows.  “The drafters of the [FCPA] knew that they could, consistently with international law, reach foreign officials in certain circumstances. But they were equally well aware of, and actively considered, the ‘inherent jurisdictional, enforcement, and diplomatic difficulties’ raised by the application of the bill to non-citizens of the United States.”  The trial court observed that prosecution and punishment of “foreign officials” (in the Castle case alleged Canadian “foreign officials”) “will be accomplished by the government which most directly suffered the abuses allegedly perpetrated by its own officials, and there is no need to contravene Congress’ desire to avoid such prosecutions by the United States.”  For those of you scoring at home, Castle represents a DOJ loss in a contested FCPA matter.

In recent years, however, the DOJ has used other laws in an attempt to reach “foreign officials.”  This trend has been profiled here and here.  For instance, in January 2010, in connection with the Gerald and Patricia Green FCPA enforcement action, a criminal indictment was unsealed against Juthamas Siriwan and Jittisopa Siriwan.  According to the indictment, Juthamas “was the senior government officer of the Tourism Authority of Thailand (TAT)” and she is the “foreign official” the Greens were convicted of bribing.  Jittisopa is the daughter of the “foreign official” and also alleged to be an “employee of Thailand Privilege Card Co. Ltd.” an entity controlled by TAT and an alleged “instrumentality of the Thai government.”  The charges against the Siriwans were not FCPA charges, but largely conspiracy to money launder and “transporting funds to promote unlawful activity.”

As detailed in this Wall Street Journal Corruption Currents story by Joe Palazzolo, the Siriwans are fighting back.  On behalf of the Siriwans, lawyers at Kelley Drye & Warren LLP recently field this motion to dismiss to the indictment.

In summary, the Siriwans state as follows.  “This is the first judicial challenge to a novel prosecutorial approach the Government recently developed to charge foreign officials allegedly involved in corruption.  That approach is aimed at overcoming a fundamental FCPA limitation.  The FCPA does not criminalize a foreign public official’s receipt of a bribe.  Nor can the Government employ an FCPA conspiracy charge against a foreign public official.  Accordingly, these new enforcement initiatives require expansive interpretations [of] “promotion money laundering” [under the Money Laundering Control Act].”  The Siriwans state as follows.  “Congress has extensively amended the FCPA, yet it deliberately has not extended FCPA liability to foreign officials.  If the Government wishes to extend U.S. criminal penalties to foreign officials accepting a bribe, it must go back to Congress, rather than employ dubious charging tactics to evade the direct and repeated congressional choice not to apply FCPA criminal liability to such officials.”

As noted in Palazzolo’s article, the DOJ has yet to respond to Siriwans’ motion and U.S. District Judge George Wu (C.D. of California) has scheduled a hearing on the motion for October 20th.

In a development that goes straight to a point raised by the Castle court, Thailand’s National Counter-Corruption Commission (NCCC) has reportedly found sufficient grounds to believe that Juthamas Siriwan received money from the Greens and that Jittisopa Siriwan was an accomplice in the bribery case.  The NCCC has reportedly forwarded its conclusion to the Thai Attorney-General for legal action against the Siriwans.  For more, see here from the Bangkok Post.

The Siriwan’s challenge is the latest in “this year of FCPA judicial scrutiny.”  Previously this year, there was the first judicial challenge to the DOJ’s “foreign official” interpretation that made extensive use of the FCPA’s legislative history (see here); the first dd-3 judicial challenge (see here); the first victim petition under the FCPA (see here); and the first Travel Act judicial challenge (see here).

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In a related development (see here), the DOJ has dropped its appeal of Gerald and Patricia Green’s sentence.  As detailed in this prior post, in September 2009, Gerald and Patricia Green were found guilty by a federal jury of substantive FCPA violations, conspiracy to violate the FCPA, and other charges.  After several sentencing delays, in August 2010 (see here), Judge Wu rejected the DOJ’s 10 year sentencing request for both Gerald and Patricia Green and sentenced the Greens to six months in prison, followed by three years probation.  In its sentencing brief, the DOJ urged the court to “disregard defendants’ efforts to obscure the landscape of FCPA sentencing, which generally reflects significant prison terms for convicted individuals.”  I asked at the time whether the “landscape of FCPA sentencing” truly reflected “significant prison terms” as stated by the DOJ – a statement even more true now (see the FCPA Sentences tab under the Search page).

I was surprised to learn that the DOJ was appealing the Green sentences and I am thus not surprised to learn that the DOJ has dropped its appeal.  In short, do you think the DOJ wants anything FCPA related before the 9th Circuit?

 

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