Esquenazi Challenges DOJ’s “Foreign Official” Interpretation
Like many FCPA defendants (corporate and individual), Joel Esquenazi allegedly violated the FCPA’s anti-bribery provisions by providing something of value, not to a foreign government official, but to an employee of an alleged state-owned or state-controlled enteprise (“SOE”).
In a December 2009 indictment (here), the DOJ alleged that: (i) “Telecommunications D’Haiti (“Haiti Teleco”) was the Republic of Haiti’s state-owned national telecommunications company;” (ii) Robert Antoine and Jean Rene Duperval were, at various times, “the Director of International Relations of Haiti Teleco” and a “foreign official as that term is defined in the FCPA;” and (iii) Esquenazi, and others provides, things of value to these “foreign officials” in order to obtain or retain business in violation of the FCPA’s anti-bribery provisions.
Unlike most FCPA defendants (corporate and individual), including others charged with Esquenazi in the same indictment, Esquenazi is putting the DOJ to its burden of proof, specifically as to the FCPA’s “foreign official” element.
In a November 2nd motion to dismiss the indictment (here), Esquenazi “respectfully moves the Court to dismiss the indictment for failure to state a criminal offense and, in the alternative, for vagueness with respect to who would constitute a ‘foreign official’ within the meaning of the” FCPA.
The motion states as follows.
“The instant indictment fails to state a criminal offense because it alleges that the recipients of the improper payments were ‘foreign officials’ because they were employees of an entity ‘owned’ by the Republic of Haiti. Such a definition of ‘foreign official’ is unsupported by the text or the purpose of the FCPA. The FCPA is a public bribery statute which criminalizes improper payments to officials performing a public function. Mere control or partial control or ownership (or partial ownership) of an entity by a foreign government no more makes that entity’s employees ‘foreign officials’ than control of General Motors by the U.S. Department of the Treasury makes all GM employees U.S. officials.” (emphasis in original).
Alternatively, the motion states as follows.
“… the Court should dismiss the indictment on the grounds that the FCPA’s definition of ‘foreign official,’ which includes employees of any foreign government ‘department, agency or instumentality,’ is unconstitutionally vague. Especially in the context of third country under a coup such as Haiti was under at the relevant time, a vague definition of ‘foreign official’ to include employees of entities solely based on partial or even full government ‘ownership’ of those entities would unfairly sweep nearly all economic activity within the scope of the statute.”
Richard J. Diaz, an attorney from Coral Gables, Florida, filed the motion on behalf of Esquenazi.
*****
For prior entries regarding the Haiti Teleco case see here.
As noted in a prior post, an interesting twist is that Haiti Teleco is currently 60% owned by Viettel, a telecommunications company run by Vietnam’s military (see here).
Indicting a “Foreign Official”
Yesterday, the DOJ announced (see here) the unsealing of an indictment (see here) against Joel Esquenazi, Carlos Rodriguez, and Marguerite Grandison which charges (among other things) conspiracy to violate the FCPA and substantive FCPA violations for an alleged scheme to bribe two former employees of Haiti Teleco, the alleged “state-owned national telecommunications company.”
Esquenazi and Rodriguez are former executives of a privately owned, Florida-based telecommunications company and Grandison was the President of Telecom Consulting Services Corp., a Florida based company which served as an intermediary.
The unsealed indictment is the latest chapter in this matter; in May 2009, the DOJ announced (see here) the guilty pleas of Juan Diaz and Antonio Perez in connection with the same scheme.
This matter is also yet another example of an FCPA enforcement action in which the “foreign official” is an employee of an alleged state-owned or state-controlled entity.
That, however, is not why this enforcement action is noteworthy.
It is noteworthy because DOJ also indicted Robert Antoine and Jean Rene Duperval – the alleged “foreign officials.” According to the indictment, Antoine and Duperval both served as the “Director of International Relations of Haiti Teleco” and were responsible for negotiating contracts with international telecommunications companies on behalf of Haiti Teleco.
Of course, the charges were not FCPA charges, because the FCPA only covers “bribe-payers” not “bribe-takers” (see here, here, for prior posts on this subject).
Rather the charges against Antoine and Duperval were money laundering conspiracy and/or substantive money laundering charges.
According to the DOJ release, Antoine is from “Miami and Haiti” and Duperval is from “Miramar, Fla. and Haiti.” Further, according to the indictment, both individuals had bank accounts in the U.S. and these accounts were used in connection with the bribery scheme. (I wonder if Washington Mutual, Wachovia, or Miami Federal Credit Union were aware that Haitian “foreign officials” were among its customers!)
To my knowledge this is the first time “foreign officials” have been specifically charged as defendants in connection with an FCPA enforcement action. This indictment of “foreign officials” comes on the heels of AG Holder’s recent speech (see here) in which he stated that the U.S. government was committed to recovering funds obtained by “foreign officials” through bribery.