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Second Circuit Affirms Seng’s Conviction

Seng2

Previous posts here, here and here highlighted Ng Lap Seng’s Second Circuit appeal after a federal jury convicted him in July 2017 of two counts of violating the FCPA, one count of paying bribes and gratuities, one count of money laundering and two counts of conspiracy “for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.”

Recently, in this decision the Second Circuit affirmed Seng’s conviction. As stated in the opinion, the issues on appeal were: (i) whether the United Nations is an “organization” within the meaning of 18 U.S.C. 666; (ii) whether the jury was correctly instructed as to controlling law, particularly as pertains to bribery in light of McDonnell v. United States (see here for the prior post concerning the Supreme Court’s 2016 decision construing 18 USC 201 – the domestic bribery statute – particularly the meaning of “official act”; and (iii) whether the evidence was insufficient to support a guilty plea.

The bulk of the Second Circuit’s approximate 70 page decision highlights the relevant factual background and the court’s analysis concerning 18 U.S.C. 666 regarding “theft or bribery concerning programs receiving federal funds.”

Regarding the so-called McDonnell challenge, Seng argued on appeal that FCPA bribery, as well section 666 bribery, require proof of an official act satisfying the McDonnell standard; that the trial court’s “official act” instruction failed to satisfy this standard; and that the evidence was insufficient to satisfy the McDonnell standard.

Given that 18 USC 201 contains different language than the FCPA (as well as section 666), it is not surprising that the Second Circuit rejected the McDonnell challenge because, in the words of the court, 18 USC 201’s “definition of ‘official act,’ which informs the McDonnell standard, does not delimit the quid pro quo elements of 666 and FCPA bribery.”

As an aside, the Second Circuit’s opinion further highlights the folly of seeking to prohibit “foreign official” bribe demands through an amendment to 18 USC 201 (as this recent House bill seeks to do) rather than through an FCPA amendment.

Under the heading “Section 666 and FCPA Bribery Are Not Textually Limited to “Official Act” Acts as Defined in 201 and McDonnell” the court stated in pertinent part (certain internal citations omitted):

“No uniform definition applies to the word “bribe” as proscribed in the federal code. Nevertheless, at least as to the giver, bribery is generally understood to mean the corrupt payment or offering of something of value to a person in a position of trust with the intent to influence his judgment or actions. It is this quid pro quo element—“a specific intent [corruptly] to give . . . something of value in exchange” for action or decision that distinguishes bribery from the related crime of illegal gratuity.

In addressing various manifestations of bribery under the federal criminal law, Congress may, of course, define the particular quids and quos prohibited.   In generally proscribing the bribery of federal officials, Congress has prohibited corruptly giving such an official “anything of value” (the quid) “to influence any official act” (the quo).  18 U.S.C. § 201(b)(1)(A), Congress has limited “official act,” as used in § 201(b)(1)(A), (2)(A), however, to a statutory definition.  And, as just discussed, this text is the source of the McDonnell standard.

But not all federal bribery statutes identify “official act,” much less official act as defined in § 201(a)(3), as the necessary quo for bribery.  Indeed, the general bribery statute itself proscribes corruptly giving anything of value in exchange for other quos: to influence a public official to commit fraud, see 18 U.S.C. § 201(b)(1)(B); to induce an official to violate a public duty, see id. § 201(b)(1)(C); to influence sworn testimony, see id. § 201(b)(3).    It would be superfluous to identify these quos distinctly if they were mere variations on the statute’s defined “official act.”

Turning to the statutes here at issue, Congress identifies still different quos in proscribing bribery in other contexts.  Section 666, which prohibits bribery concerning programs receiving federal funding, makes it a crime corruptly to give a person anything of value (the quid) “with intent to influence . . . an agent of an organization or of a State, local or Indian tribal government,” any part of which receives federal funding, “in connection with any business, transaction, or series of transactions of such organization . . . involving anything of value of $5,000 or more” (the quo).  18 U.S.C. § 666(a)(2).   The FCPA, which addresses certain foreign trade practices, makes it a crime corruptly to give a foreign official anything of value (again, the quid) for purposes of (1) “influencing any act or decision of such foreign official in his official capacity”; (2) “inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official,” (3) “securing any improper advantage,” or (4) “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” (the quos). 15 U.S.C. §§ 78dd‐2(a)(1), 78dd‐3(a)(1).  The FCPA further requires that each of these quos serves a particular purpose, i.e., to assist the giver in “obtaining,” “retaining,” or “directing” business.

From these textual differences among various bribery statutes, we conclude that the McDonnell “official act” standard, derived from the quo component of bribery as defined by § 201(a)(3), does not necessarily delimit the quo components of other bribery statutes, such as § 666 or the FCPA.

This court has already so held with respect to § 666 bribery, reasoning that the language of that statute “is more expansive than § 201.” United States v. Boyland, 862 F.3d at 291.  As Boyland observed, § 201(b)(1)(A) bribery pertains only to “‘official acts,’” a term statutorily “limited to acts on pending ‘questions, matters, causes suits, proceedings, or controversies.’” By contrast, § 666 prohibits bribery “‘in connection with any business, transaction, or series of transactions of [an] organization, government, or agency.’” Nowhere does § 666 mention “official acts.”   Nowhere does it place any definitional limits on the business or transactions to be influenced—beyond requiring them to be “of” the organization receiving more than $10,000 in federal funding and to have a “value of $5,000 or more.”  18 U.S.C. § 666(a)(2).  Further, the bribery proscribed by § 666 need not pertain directly to the business or transactions of an organization receiving federal funding; it need only be “in connection with” it. Thus, Boyland holds that McDonnell’s “official act” standard for the quo component of bribery as proscribed by § 201 does not apply to the “more expansive” language of § 666.

Boyland’s reasoning applies with equal force to the FCPA, which prohibits giving anything of value in exchange for any of four specified quos. While the first FCPA quo referencing an “act or decision” of a “foreign official in his official capacity” might be understood as an official act, the FCPA does not cabin “official capacity” acts or decisions to a definitional list akin to that for official acts in § 201(a)(3).    15 U.S.C. §§ 78dd‐2(a)(1)(A)(i); 78dd‐3(a)(1)(A)(i).    Nor does it do so for acts or omissions that violate an official’s “duty,” or that affect or influence the act or decision of a foreign government.  Id. §§ 78dd‐2(a)(1)(A)(ii), (B); 78dd‐3(a)(1)(A)(ii), (B).  Finally, the FCPA prohibits bribing a foreign official to “secur[e] an improper advantage” in obtaining,retaining, or directing business, without requiring that the advantage be secured by an official act as limited by the § 201(a)(3) definition.  Id. §§ 78dd‐2(a)(1)(A)(iii); 78dd‐ 3(a)(1)(A)(iii).”

Elsewhere in its opinion, the Second Circuit addressed Seng’s challenges regarding the corrupt intent and obtain or retain business elements of the FCPA’s anti-bribery provisions.

In terms of corrupt intent, Seng argued that in order for the jury to have found that he acted “corruptly” in violation of either section 666 or the FCPA, the jury was required to find that he intended the U.N. officials to breach an official duty owed to the United Nations. The Second Circuit concluded that Seng’s arguments “are defeated by precedent” and cited U.S. v. Bourke in which the Second Circuit upheld a corrupt intent instruction “that made no mention of breach of duty.”

As to obtain or retain business, Seng argued that the trial court erred in rejecting his request to define “business” as commercial business. As stated by the court (certain internal citations omitted):

“According to Ng, the given instruction was erroneous because the jury had “no way to know whether ‘business’ referred to commercial business or more broadly to any transaction.” Moreover, Ng argues that the trial evidence was insufficient for the jury to find this “business” element because he intended to build the convention center and to make it available for UNOSSC use at no cost to the U.N.

These arguments merit little discussion.   Assuming arguendo that Congress intended to limit the FCPA to “commercial bribery,” a reasonable jury would so understand from the statutory text.   While “business” can refer to any productive activity, a reasonable jury, instructed as here to consider the word in the context in which it is used in the FCPA, i.e.,  “obtaining or retaining business for, or with, or directing business to, any person,” would need no further instruction to understand it to bear the common meaning of “commercial or mercantile activity,” Webster’s Third New Int’l Dictionary (2002).

Moreover, the record evidence would allow a reasonable jury to find that Ng paid the two U.N. ambassadors intending for them to obtain a commercial business deal with the U.N., specifically, a contract for his Macau Conference Center to serve as the official host site for the U.N.’s UNOSSC Expo.  Ng does not dispute that contracts are a routine tool in obtaining, maintaining, and directing commercial business. Indeed, at his request, the district court charged the jury that “business” includes “the execution or performance of contracts.”  Nevertheless, Ng argues that a contract, such as the Pro Bono Agreement, which imposed no monetary obligations on the U.N., cannot be deemed to have obtained “commercial” business for him.

Ng’s argument fails because the FCPA prohibits commercial bribery without regard to whether the briber himself profits directly from the business obtained.  Indeed, it prohibits bribery designed to obtain, retain, or direct business not only for or to the briber, but for or to “any person.”  15 U.S.C. §§ 78dd‐2(a)(1)(B), 78dd‐3(a)(1)(B).  Here, “any person” could refer to the U.N.  A reasonable jury could find Ng guilty under the FCPA for bribing Lorenzo and Ashe in return for them using their influence to direct Ng’s business to the U.N., specifically, his willingness contractually to obligate himself to provide the U.N. with the cost‐free use of his Macau convention center as its permanent UNOSSC Expo site.  While such a contract, on its face, might appear to give all commercial benefits to the U.N., the jury could find that by thus using bribery to direct his own business obligation to the U.N., Ng thought he would best be able to obtain greater business for and, thus, to maximize profits from, the larger commercial complex of which the convention center was a part.  Thus, his sufficiency challenge to the business purpose component of the FCPA crimes also fails.”

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