The Foreign Corrupt Practices Act is about corruption, at least corruption of a certain type.
However, there are numerous other forms of corruption as well including here in the United States. Yet an uncomfortable truth is that here in the United States we accept many forms of corruption by assigning various euphemisms, code words and metaphors to the underlying conduct.
For instance, in both Citizens United and McCutcheon (cases dealing with various aspects of campaign finance laws) the Supreme court stated: “ingratiation and access are not corruption” when it involves U.S. officials or political actors even though it would most certainly be corruption if it involved foreign official or foreign political actors.
Likewise, the Second Circuit recently stated the following about corporate lobbying:
“Lobbying has been integral to the American political system since its very inception. […] In order to more effectively communicate their clients’ policy goals, lobbyists often seek to cultivate personal relationships with public officials. This involves not only making campaign contributions, but sometimes also hosting events or providing gifts of value such as drinks, meals, and tickets to sporting events and concerts.”
Yet if one were to provide those gifts or things of value to foreign public officials there would likely be an FCPA enforcement action.
Judicial blessing of forms of corruption through assigning various euphemisms, code words and metaphors to the underlying conduct continued recently as the Seventh Circuit held that a politician trading one favor for another (in which the politician would personally benefit) is not corruption, but “log rolling” – a rather “common exercise” in politics.
The recent opinion was in U.S. v. Blagojevich and involved former Illinois Governor Rod Blagojevich who is currently serving a lengthy prison sentence after being criminally convicted of various counts several years ago. Among the facts serving as a basis for certain of the convictions were the following as described by the court.
“Through intermediaries (his own and [those of President elect Obama]), Blagojevich sought a favor from Sen. Obama in exchange for appointing Valerie Jarrett, who Blagojevich perceived as the person Sen. Obama would like to have succeed him. Blagojevich asked for an appointment to the Cabinet or for the President-elect to persuade a foundation to hire him at a substantial salary after his term as Governor ended, or find someone to donate $10 million and up to a new “social welfare” organization that he would control. The President elect was not willing to make a deal, and Blagojevich would not appoint Jarrett without compensation, saying: “They’re not willing to give me anything except appreciation. Fuck them.”
As noted by the court, “the indictment charged [the above] negotiations as attempted extortion, in violation of 18 U.S.C. §§ 2 and 1951, plus corrupt solicitation of funds (18 U.S.C. §§ 371 and 666(a)(1)(B)) and wire fraud (18 U.S.C. §§ 1343 and 1346).”
As next stated by the court:
“[A] problem in the way the instructions told the jury to consider the evidence requires us to vacate the convictions on counts that concern Blagojevich’s proposal to appoint Valerie Jarrett to the Senate in exchange for an appointment to the Cabinet. A jury could have found that Blagojevich asked the President-elect for a private-sector job, or for funds that he could control, but the instructions permitted the jury to convict even if it found that his only request of Sen. Obama was for a position in the Cabinet. The instructions treated all proposals alike. We conclude, however, that they are legally different: a proposal to trade one public act for another, a form of logrolling, is fundamentally unlike the swap of an official act for a private payment.
Because the instructions do not enable us to be sure that the jury found that Blagojevich offered to trade the appointment for a private salary after leaving the Governorship, these convictions cannot stand.
A political logroll … is the swap of one official act for another. Representative A agrees with Representative B to vote for milk price supports, if B agrees to vote for tighter controls on air pollution. A President appoints C as an ambassador, which Senator D asked the President to do, in exchange for D’s promise to vote to confirm E as a member of the National Labor Relations Board. Governance would hardly be possible without these accommodations, which allow each public official to achieve more of his principal objective while surrendering something about which he cares less, but the other politician cares more strongly. A proposal to appoint a particular person to one office (say, the Cabinet) in exchange for someone else’s promise to appoint a different person to a different office (say, the Senate), is a common exercise in logrolling. We asked the prosecutor at oral argument if, before this case, logrolling had been the basis of a criminal conviction in the history of the United States. Counsel was unaware of any earlier conviction for an exchange of political favors. Our own research did not turn one up. It would be more than a little surprising to Members of Congress if the judiciary found in the Hobbs Act, or the mail fraud statute, a rule making everyday politics criminal.
The prosecutor insists, however, that Blagojevich’s situation is different and uncommon because he sought a post in the Cabinet for himself. It isn’t clear to us that this is unusual. The current Secretary of State was appointed to that position from a seat in the Senate, and it wouldn’t surprise us if this happened at least in part because he had performed a political service for the President. Ambassadors, too, come from the House or Senate (or from state politics) as part of political deals. Some historians say that this is how Earl Warren came to be Chief Justice of the United States: he delivered the California delegation at the 1952 Republican convention to Eisenhower (rather than Senator Taft) in exchange for a commitment to appoint him to the next vacancy on the Supreme Court.
If the prosecutor is right, and a swap of political favors involving a job for one of the politicians is a felony, then if the standard account is true both the President of the United States and the Chief Justice of the United States should have gone to prison. Yet although historians and political scientists have debated whether this deal was made, or whether if made was ethical (or politically unwise), no one to our knowledge has suggested that it violated the statutes involved in this case. (Whether it might have violated 18 U.S.C. §599, and whether that statute is compatible with the First Amendment, are issues we do not address.)
What we have said so far requires the reversal of [various criminal convictions], though the prosecutor is free to try again without reliance on Blagojevich’s quest for a position in the Cabinet.”
The most recent issue of the always informative FCPA Update from Debevoise & Plimpton states as follows regarding the Blagovevich decision.
“[T]he Seventh Circuit’s decision in the Blagojevich matter raises serious questions whether some of the broader theories invoked by the government in FCPA cases (or by government officials in published remarks) are valid.