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Friday Roundup


FCPA sentence, scrutiny alerts and updates, flummoxed, lots of time to watch film, and for the reading stack. It’s all here in the Friday roundup.

FCPA Sentence

This December 2016 post highlighted the DOJ’s announcement of FCPA conspiracy charges and plea agreements against four individuals (Daniel Perez, Kamta Ramnarine, Victor Valdez, and Douglas Ray) associated with Hunt Pan Am Aviation in connection with a Mexican bribery scheme.

Perez and Ramnarine were both previously sentenced to three years probation and Valdez was sentenced to 1 year and a day in federal prison, 2 years of supervised release, and ordered to pay approximately $91,000 in restitution.

Yesterday, Ray was sentenced to 18 months in federal prison, 3 years of supervised release, and ordered to pay approximately $590,000 in restitution.

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Scrutiny Alerts And Updates

scrutiny alert


Netherlands-based ING NV, a company with shares listed on the New York Stock Exchange, recently disclosed:

“ING Bank is the subject of criminal investigations by Dutch authorities regarding various requirements related to the on-boarding of clients, money laundering and corrupt practices. ING Groep has also received related information requests from U.S. authorities. ING Groep and ING Bank are cooperating with such ongoing investigations and requests. It is currently not feasible to determine how the ongoing investigations and requests may be resolved or the timing of any such resolution, nor to estimate reliably the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome, which could be significant.”

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Friday Roundup


The latest edition of the double standard, survey says, when the dust settles, and for the reading stack.  It’s all here in the Friday roundup.

Double Standard

An individual currently holds political office in one unit of government, yet is also a candidate for a higher unit of government.

Among the contributors to organizations supporting the individual’s campaign for higher office are companies that have secured millions in contracts from the lower unit of government run by the individual.  After all, the individual may not prevail in the higher office race and thus return to the lower unit.

A prudent FCPA practitioner would spot the “red flags” as the contributions could be viewed as a way to curry favor with the individual upon return to the lower unit of government.

However, the individual (more accurately individuals) are not “foreign officials” they are current governors Chris Christie, John Kasich, Bobby Jindal, and Scott Walker who are also running for President.

For the latest edition of the double standard, see this Wall Street Journal article.


Silly you for even mentioning the “b” word.  This is all about “First Amendment rights” according to a source in the article.

Why do business interactions with “foreign officials” seem to be subject to different standards than business interactions with U.S. officials? Why do we reflexively label a “foreign official” who receives “things of value” from private business interests as corrupt, yet generally turn a blind eye when it happens here at home or call it something different such as participation in the political process? Is the FCPA enforced too aggressively or is enforcement of the U.S. domestic bribery statute too lax? Ought not there be some consistently between enforcement of the FCPA and the domestic bribery statute?

For approximately 50 other post highlighting these double standards, see this subject matter tag.

Survey Says

According to this recent ASEAN (Association of Southeast Asian Nations) Business Outlook Survey:

“The risk of pressure to bribe officials for essential licenses and permits varies greatly depending on the country from which executives responded. Less than half of the respondents in Brunei, Malaysia, Myanmar, and Singapore foresee that this risk will hinder their long-term operations, while large percentages of respondents in Cambodia (89%), Laos (85%), and Vietnam (74%) foresee that it will.”

“In contrast, facilitation payments for routine government services are a more common part of international business. (Routine government services may include processing governmental papers, such as visas and work orders, or such services as police protection, power supply, phone service, etc.) In nearly all countries, the risk of pressure to bribe officials to speed up routine government services is slightly higher than the comparable risk for essential licenses and permits.”

In passing the FCPA, Congress recognized the inherent difficulties companies encounter in foreign markets and thus elected not to capture payments in connection with licenses, permits and the like in the anti-bribery provisions.  (To learn more, see “The Story of the FCPA“).  Congress also chose to exempt facilitation payments from the anti-bribery provisions.

When The Dust Settles

FCPA enforcement actions only focus on alleged bribe payers.  However, when an FCPA enforcement action concludes, there is still an alleged “foreign official” who allegedly received the bribe payments.  When the dust settles, what happens to the “foreign official”?

For years, guest contributor Mike Dearington followed the DOJ’s 2011 enforcement action against Juthamas Siriwan, the former government officer of the Tourism Authority of Thailand, and Jittisopa Siriwan, the daughter of the alleged “foreign official” who was 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 Siriwan’s allegedly received improper payments from Gerald and Patricia Green who were convicted of FCPA and related offenses in 2009 and served time in federal prison. (See prior posts at this subject matter tag).

In short, the federal court judge overseeing the DOJ’s money laundering case against Siriwan stayed the case pending expected legal proceedings in Thailand against Siriwan.

Earlier this week, the Bangkok Post reported:

“The Criminal Court has indicted former Tourism Authority of Thailand (TAT) governor Juthamas Siriwan and her daughter in a film festival bribery case, the Office of the Attorney-General spokesman said Wednesday.  Prosecutors indicted Mrs Juthamas, 68, and her daugther Jittisopha, 41, in the Criminal Court on Tuesday on charges of taking bribes, corruption and bid-rigging, plus breaching Section 6 of the law dealing with state employees’ offences and Section 12 of the law governing submitting tenders to state agencies, which carries a maximum jail term of 20 years.”

This development is expected to functionally end the U.S. prosecution.

In other news relevant to the above enforcement action, the Hollywood Reporter reports that Gerald Green recently died.  He was 83.

Reading Stack

The most recent edition of the always informative FCPA Update by Debevoise & Plimpton has a nice write-up of the recent BNY Mellon enforcement action (see here and here for prior posts).  In pertinent part, the Update states:

In the SEC’s View, a Thing of Value Can Be Purely Psychological

[T]he government’s investigations in this area face a key threshold legal issue under the FCPA: can providing a job or internship to an official’s relative constitute a thing of value to the official him/herself? Can offering the purely psychological benefit of helping a child or relative land a job give rise to an actionable attempt at bribery? The official does not stand to see any personal financial gain from the internship, except in the arguable circumstance of reducing the official’s financial obligations to a dependent. But the SEC seems to have purposely disclaimed – or at least strained – that theory here, given that one of the internships at issue was unpaid. The SEC addressed this thorny issue in a single sentence in the Order, asserting that “[t]he internships were valuable work experience, and the requesting officials derived significant personal value in being able to confer this benefit on their family members.”

The SEC has previously suggested that an intangible benefit can be a “thing of value” under the FCPA, having faulted Schering-Plough for providing a requested donation to a legitimate charity with which a foreign official and his spouse were closely involved, in an alleged attempt to influence the official. The BNYM Order, however, seems to represent a significant expansion of that thinking. Notably, in Schering-Plough the SEC charged only a “books and records” violation, not a violation of the FCPA’s anti-bribery provisions. Moreover, even assuming intangible prestige or listing an internship on a resumé can be a thing of value, Schering-Plough at least involved a transfer of funds at the official’s request, which arguably allowed the official himself to reap the prestige of the donation. Here, the prestigious and valuable work experiences – one of which was entirely unpaid – went not to the official but to the official’s family member, and thus only indirectly benefited the official.

Evidentiary Issues: Quid Pro Quo or Internal Speculation?

The BNYM case and others like it also raise difficult evidentiary issues for FCPA enforcement authorities. How can one draw the line between a genuine quid pro quo – an actual exchange of a personal benefit to an official for a business assignment – from mere internal speculation and anxiety about potentially damaging an important relationship? Here, the BNYM Order is notable for what it does not say: the Order does not place the internship hiring requests in the context of any specific business opportunity, or any review or re-evaluation of whether the Sovereign Wealth Fund should maintain its existing business relationship with BNYM. Rather, the cited internal communications reflect a generalized desire to gather additional business in the future or to a perception that existing business could be diminished relative to competitors.

Here, the lack of any tie to a concrete business opportunity could simply be a function of the asset management business, in which funds for investment are (in general terms) fungible. Time will tell whether, in other contexts, courts or enforcement authorities will focus more on an attempt to win a specific business opportunity rather than simply an effort to create or maintain good relations that may (or may not) bear fruit over time. For now, the SEC appears to have followed the controversial “quid pro quo lite” theory that has garnered some success in DOJ criminal domestic bribery prosecutions; in that sense, the reach of the Order may not be that surprising – although its theoretical underpinnings in the FCPA arena remain largely untested.

The SEC’s justification for the imposition of a disgorgement remedy is also difficult to locate within its factual recitation. The disgorgement amount of $8.3 million cannot be explained by the relatively minor new investment with BNYM (of less than $1 million). It stands to reason, then, that the disgorgement amount is based, at least in part, on BNYM’s retention of its existing business with the Sovereign Wealth Fund. The causation analysis on that point is not transparent, as the facts stated do not suggest any meaningful way to assess the degree to which the intern hires arguably contributed to maintaining the existing relationship. The result may be the product of any number of unstated factors that went into the settlement, highlighting once again, why settlements should not make law.


Overall, the BNYM Order highlights two areas of frequent criticism of FCPA enforcement. First, the activity under scrutiny bears a strong similarity to what are perceived as common practices in the private sector in which firms seek to accommodate client representative requests in order to maintain good relations with key decision makers. In this way, enforcement authorities risk criticism that they are using the FCPA to excise business practices affecting relationships with foreign officials abroad that are routinely tolerated in the private sector in the United States – and that are not unprecedented or even rare in the context of companies’ relationships with officials employed by the United States federal, state, and local governments.

Second, the SEC’s choice of a consented-to cease-and-desist order to announce a new and expansive interpretation of the FCPA leaves its interpretations of the law entirely untested by judicial scrutiny and adversarial process. Given that BNYM did not admit the allegations in the Order, BNYM had very little incentive to challenge the SEC’s view of the facts and law, yet as with Schering-Plough’s resolution (referenced above), the SEC’s debatable interpretive position may go years (or decades) without judicial scrutiny.

As noted at the outset, the BNYM Order is just the first resolution of a case of this kind. Others may follow, including in DOJ matters, which will likely shed additional light on the landscape in this area.”


A good weekend to all.

The Challenges Of Pursuing Foreign Bribe-Takers

Today’s post is from Mike Dearington, an associate at Arent Fox LLP in Washington, DC. Dearington has previously authored several FCPA Professor guest posts on the Siriwan matter (see here).


Last week, Leslie Caldwell (Assistant Attorney General for the DOJ Criminal Division) spoke at the American Conference Institute’s International Conference on the Foreign Corrupt Practices Act. Caldwell discussed the Criminal Division’s approach to combatting global corruption, warning that corrupt foreign officials are also in the government’s crosshairs.  “And now we also are prosecuting the bribe takers, using our money laundering and other laws,” Caldwell stated. “[O]ur efforts to hold bribe takers as well as bribe payors accountable for their criminal conduct are greatly aided by our foreign partners.”

Meanwhile, the very same day, federal prosecutors in the Central District of California requested that a court postpone an extradition status hearing in United States v. Siriwan, the government’s bellwether case against a foreign official who allegedly accepted bribes.  In the filing, DOJ prosecutors revealed that the foreign official, Juthamas Siriwan, former governor of the Tourism Authority of Thailand, has been indicted on domestic bribery charges at home in Thailand.  Thailand’s indictment reduces the possibility that it will extradite the former official to the United States to face money-laundering charges.

Prosecutors charged Siriwan in 2009 with violations of the Money Laundering Control Act, alleging that Siriwan used the US financial system to promote or conceal violations of the FCPA and Thai law.  A jury convicted the alleged bribe payers, Hollywood film executives Gerald and Patricia Green, of FCPA violations in 2010 for allegedly paying Siriwan $1.8 million in bribes in exchange for lucrative film festival contracts.  But prosecutors’ case against Siriwan has stalled due to the government’s inability to obtain Siriwan’s extradition from Thailand.  The court has deferred ruling on the government’s somewhat novel legal theory in Siriwan until such time as Siriwan is extradited to the United States to stand trial.  Now that Thailand is contemporaneously prosecuting Siriwan at home, extradition seems even more unlikely, and prosecutors may be unable to convince the court to further stay the case, which has been pending for nearly six years.

The government’s extradition challenges in Siriwan suggest that the Criminal Division’s tactic of pursuing bribe-taking foreign officials can be fraught with diplomatic challenges and uncertainty.  Enforcement agencies in a corrupt official’s home country have a significant interest in holding officials accountable at home.  And a country’s unwillingness to communicate and coordinate with prosecutors in the United States can further complicate an already‑complicated case.  Thailand has been less than clear about whether it intends to extradite Siriwan.  Indeed, prosecutors seem to have learned of Thailand’s decision to indict Siriwan only after finding an article in the Bangkok Post.  In the DOJ’s filing, prosecutors explained, “On November 13, 2014, the Bangkok Post published a report that ‘a joint panel of the Office of the Attorney-General (OAG) and National Anti-Corruption Commission (NACC) has agreed to indict former Tourism Authority of Thailand (TAT) governor Juthamas Siriwan in a film festival bribery case.’  The parties are each gathering more information regarding the development.”

Thailand’s unilateralism with respect to Siriwan has posed problems for prosecutors in the past.  Back in July 2012, after requesting Siriwan’s extradition, prosecutors admitted to the court that the government “has not yet received a response from Thailand regarding extradition,” only to learn from Thailand four months later 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 . . . as requested by the U.S. Government, according to the Extradition Act . . . .”

Although the Criminal Division has obtained guilty pleas from foreign officials in other enforcement actions since indicting Siriwan in 2009—including in Haiti Teleco (Robert Antoine) and Direct Access Partners/BANDES (Maria de los Angeles Gonzalez de Hernandez)—Siriwan remains an important test case.  Prosecutors will likely encounter extradition challenges in future cases against bribe-taking foreign officials, whose home countries have significant interests in prosecuting the officials domestically.  And while the court in Siriwan awaits further information from the government about whether Thailand plans to extradite Siriwan, prosecutors’ legal theory remains untested.

The views expressed in this post are personal views and do not represent the views of Arent Fox LLP, its partners, employees or clients. Furthermore, the information provided is not intended to be legal advice and does not create an attorney-client relationship.

From Siriwan To Gonzalez: Why The DOJ Altered The Way It Charges Alleged Corrupt Foreign Officials

Today’s post is from Mike Dearington, a 2013 Vanderbilt law grad who will soon start his practice career.  Dearington has previously authored several FCPA Professor guest posts on the Siriwan matter.


As the Wall Street Journal reported in March, the court in United States v. Siriwan has issued a stay of the case in order to await resolution of the Thai government’s prosecution of defendant Juthamas Siriwan. A recently released transcript of the March hearing, which details the court’s reasons for the stay, suggests a strategic shortcoming in the DOJ’s charging tactics in the case. The shortcoming may explain why the DOJ, after Siriwan, altered the way it charged an allegedly corrupt foreign official in a similar case, Gonzalez.

Siriwan Background

In 2009, prosecutors charged Juthamas Siriwan, former governor of Tourism Authority of Thailand, as well as her daughter Jittisopa, with awarding lucrative contracts to two Hollywood movie executives in exchange for kickbacks.  (See here for the prior post). Because foreign officials are outside the scope of the FCPA, prosecutors charged Juthamas Siriwan under the MLCA (Money Laundering Control Act). The indictment cited two theories of specified unlawful activity: promotion of (i) violations of the US Foreign Corrupt Practices Act and (ii) violations of Thai law. Under the MLCA, FCPA violations expressly constitute specified unlawful activity, 18 U.S.C. § 1956(c)(7)(D), and violations of Thai law may constitute specified unlawful activity by virtue of being an “offense against a foreign nation involving . . . bribery of a public official, or the misappropriation, theft, or embezzlement of public funds by or for the benefit of a public official,” 18 U.S.C. § 1956(c)(7)(B)(iv). But when the defendant is the foreign official, as in Siriwan, neither theory is well settled under federal law.

Questions about the FCPA theory of money laundering predominated a January 2012 hearing in Siriwan. At that hearing, the court suggested preliminary disapproval of the theory, noting the FCPA’s affirmative legislative policy of exempting foreign officials from its reach. See, e.g., Castle; Gebardi. The government countered that it had not charged the defendant under the FCPA statute and instead was charging money laundering in promotion of FCPA violations, a distinct crime (citing Bodmer).

During the March 2013 hearing, however, discussion shifted to the prosecution’s second theory of money laundering, where an “offense against a foreign nation” is the purported specified unlawful activity.

March 2013 Siriwan Hearing: Court Continues Stay Until Resolution of Thai Prosecution

During the March 2013 hearing on defendants’ motion to dismiss, the court was conspicuously reluctant to decide questions of Thai law, when it could instead wait until Thailand decides those questions itself: “I don’t understand how I could attempt to discover what Thai law is, the ins and outs of Thai law to make that type of determination.” The court opined:

“[E]specially when there are very serious issues, it behooves the court to be somewhat cautious in this regard. And, again, it seems to me that what will happen in Thailand will inform this court as to what this court’s proper response should be to the motion to dismiss. And I do not feel that it is my obligation to do that which can be done through a prosecution in Thailand as to Thai law. [I]t behooves me to wait and see even for no other reason that I can say, at least, they are experts in Thailand as to what Thai law is.”

Additionally, the court averred that an acquittal in Thailand would weaken the government’s money-laundering charge based on promotion of crimes against Thailand. The court speculated that, in the event Thailand acquits the defendant of the very conduct that constitutes specified unlawful activity under the MLCA charge, the government is “going to be precluded from making that argument because the Thai government will have said they haven’t violated Thai law . . . .”

The government did not concede this point, instead cautioning that, in the event of an acquittal in Thailand, the government “would want to reevaluate” its position. The government added that the MLCA charges would still stand under the FCPA theory of money laundering.

Gonzalez: The DOJ Alters Its Charging Tactics After Siriwan

The Siriwan court’s reluctance to decide questions of Thai law before resolution of Thailand’s domestic enforcement means a concomitant delay of the government’s case in the United States. And if prosecutors continue to charge money laundering in promotion of an offense against a foreign nation, thereby implicating foreign law, district courts may repeatedly decide to stay the cases until the foreign nation has resolved its charges against the official. In practice, charging a foreign official with money laundering where the specified unlawful activity is a violation of another country’s law can pose a “trial within a trial” problem; that is, the district court may decide to cautiously await that country’s direct prosecution of the offense before adjudicating a money-laundering charge in the United States predicated on that offense. The latter complication seems to have occurred in Siriwan.

In addition to the delay, when a court awaits the foreign nation’s prosecution, it renders ineffective the government’s prosecution for money laundering predicated on the foreign offense. For instance, if Thailand acquits Siriwan, it will be difficult for prosecutors in the United States to then prove that Siriwan intended to promote an offense against Thailand. On the other hand, if Thailand convicts Siriwan, imprisonment in Thailand may further delay extradition to the United States.

But the government seems to have learned all this from Siriwan. In March 2013, prosecutors in United States v. Gonzalez charged Venezuelan “foreign official” Maria Gonzalez with money laundering in a kickback scheme similar to the one in Siriwan. Specified unlawful activity charged in the criminal complaint consisted of violations of the FCPA, like in Siriwan, but did not include an offense against Venezuela. Thus, the court will not need to defer to resolution of a foreign prosecution of Gonzalez to decide the merits of the government’s case on a motion to dismiss.

Furthermore, prosecutors departed from Siriwan by adding a new charge: violations of the Travel Act. The Travel Act prohibits travelling or using the mail in interstate or foreign commerce with intent to promote unlawful activity. See 18 U.S.C. § 1952(a)(3)(A). Such unlawful activity, defined in § 1952(b), includes bribery under the laws of the United States or any state thereof in which it is committed. The Gonzalez criminal complaint cites New York State Penal Law sections 180.00 and 180.05, which criminalize commercial bribery. Based on the facts alleged in Siriwan, prosecutors could probably have charged Juthamas Siriwan with violating the Travel Act, based on California Penal Code section 641.3, which criminalizes commercial bribery. Naturally, these predicate unlawful activities raise no difficulties of interpreting foreign law, and federal courts are competent at deciding questions of state law.

Attorney General Holder’s Personal Stake in Siriwan and Gonzalez

Attorney General Holder has a personal stake in seeing money-laundering cases predicated on “an offense against a foreign nation involving . . . bribery of a public official” succeed. This is because Holder, as Deputy Attorney General in the Clinton administration, was instrumental in amending the MLCA so that it included this provision in its list of specified unlawful activity.

During the Clinton administration, Holder co-chaired the Money Laundering Steering Committee. As co-chair, Holder oversaw implementation of the National Money Laundering Strategy of 2000, one of five annual strategies mandated by the “Money Laundering and Financial Crimes Strategy Act of 1998.” The 2000 Strategy Report urged passage of the Money Laundering Act of 2000, a bill that would have added bribery of a public official to the MLCA’s list of specified unlawful activity. (The addition would have satisfied Article 7 of the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.) Although the bill failed to pass, Congress resurrected the provision in 2001 under section 315 of Title III of the USA PATRIOT Act (codified at 18 U.S.C. § 1956(c)(7)(B)(iv)).

Presciently, the provision was intended to fill the very “loophole” at issue in Siriwan and Gonzalez. The 2000 report observed that:

“At present, . . . a foreign public official who accepts bribes or embezzles money and then launders the proceeds through a U.S. bank is not subject to a U.S. money laundering prosecution. The new provision will close that loophole, which severely limits the ability of the United States to investigate and prosecute the laundering of foreign criminal proceeds through financial institutions in the United States.”

Fast forward to 2009, and it is unsurprising that the DOJ, under Holder’s leadership, pursued Siriwan under the “offense against a foreign nation involving . . . bribery of a public official” provision that he helped develop.

But after the provision has caused substantial delays in Siriwan, it is equally unsurprising that the DOJ sidelined the provision in Gonzalez. That decision underscores the inefficacy of charging a specified unlawful activity that turns on a foreign offense, which can be better analyzed in a foreign court. Moreover, Gonzalez undoubtedly put the DOJ in the uncomfortable position of abandoning a strategy Holder helped develop earlier in his career at the DOJ.

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