This prior post highlighted the motion to dismiss filed by Carl Zaglin in a pending FCPA (and related) enforcement action.
In summary fashion the motion stated:
“The government has charged Defendant Carl Zaglin with conspiring to commit, and committing, alleged “bribery” pursuant to the Foreign Corrupt Practices Act. However, the Indictment fails to allege facts showing any conduct which meets the legal definition of bribery. Rather, the government alleges conduct which amounts to the payment of gratuities after an action had been performed.
The President of the United States has furthermore explicitly focused on the FCPA and existing enforcement actions under the Act, criticizing enforcement of the FCPA as “overexpansive,” “unpredictable” and “abused.” See Exec. Order No. 14209, 90 Fed. Reg. 9587 (Feb. 10, 2025) (Executive Order). This prosecution for bribery under the FCPA founded on alleged facts which do not constitute bribery amounts to precisely the sort of overexpansive and abusive enforcement of the FCPA condemned by the President in his Executive Order. The charges against Mr. Zaglin in this case fail to state an offense and directly conflict with public policy, and should be dismissed.”
This prior post discussed how many FCPA and their counsel who actively litigate against the DOJ ultimately run into the same issue: the DOJ’s argument in briefing that there are no FCPA cases on the disputed issue or that other cases (including appellate and Supreme Court decisions) are not FCPA cases.
Recently the DOJ filed its response to the motion to dismiss. In summary fashion it states:
“The Indictment alleges all the elements of the charged counts and more than adequately informs Zaglin of the charges against him. Nothing more is required at this stage. The Court should reject Zaglin’s attempt to graft additional elements and a heightened pleading standard on the charged offenses. The Court should likewise reject his additional arguments, which are based on misstatements of the applicable law and the facts alleged in the Indictment.”
Under the heading “Snyder has no bearing on this case,” the response states:
“Relying heavily on United States v. Snyder, 603 U.S. 1 (2024), Zaglin argues that the FCPA “applies only to bribes and not to gratuities.” But Snyder—which addresses a completely different statute—has no bearing on this case. First and most importantly, Zaglin concedes that the government has not charged him with paying gratuities. Rather, the Indictment explicitly charges Zaglin and his co-conspirators with offering to pay, promising to pay, and authorizing the payment of “bribes” to Honduran officials and using Marchena to send “bribe payments” to Cosenza and other officials. Moreover, as noted above, read in context, the Indictment alleges that a corrupt agreement was struck in or around March 2015 when the conspiracy began—that is, before the first TASA contract was awarded in June 2015. Accordingly, the Court should reject Zaglin’s invitation to speculate how Snyder might apply to a hypothetical case involving a “reward or token of appreciation” paid to a foreign government official; this case presents no such question.
Second, as Snyder itself makes clear, its applicability is limited. Indeed, in holding that Section 666(a)(1)(B) does not prohibit state and local officials from accepting gratuities for their past official acts, the Court relied upon Section 666’s specific statutory structure, legislative history, elements, and punishment scheme—all of which are meaningfully different from the FCPA. See Therefore, even if this case did involve allegations of gratuities—which, as Zaglin concedes, it does not—Snyder would have no impact on the viability of the FCPA and related conspiracy charges in this case.”
Under the heading “The DOJ Authorized this Case for Prosecution Pursuant to the President’s Executive Order,” the response states:
“Having failed to establish any legal grounds to dismiss the Indictment, Zaglin urges the Court—without citing any decisional authority—to grant his Motion as a matter of “public policy.” In support of this argument, Zaglin relies on the Executive Order and related Department of Justice memoranda, including the Attorney General’s February 5, 2025 Memorandum, Total Elimination of Cartels and Transnational Criminal Organizations (the “AG Memo”), and the Deputy Attorney General’s Memorandum, Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act (the “FCPA Guidelines”) (together with the AG Memo, the “DOJ Memos”)—all of which expressly state that they do not create any substantive rights. The Court should reject this gambit as both contrary to bedrock legal principles and the DOJ Memos themselves.
[…]
[A]s the Court is aware, the Executive Order required that the Attorney General “review in detail all existing FCPA investigations or enforcement actions and take appropriate actions with respect to such matters . . . .” Such a review was conducted in this case and, following that review, the Government was authorized to proceed to trial. Zaglin may disagree with that decision, but there is simply no legal basis for dismissing an Indictment on “public policy” grounds, much less on grounds that have already been thoroughly and fully considered in accordance with the Executive Order and with the Department of Justice’s internal processes.”
A footnote then states:
“Elsewhere in the Motion, Zaglin also mischaracterizes public remarks made by Acting Assistant Attorney General Matthew Galeotti, the head of the Department of Justice’s Criminal Division, to argue that “No government interests were implicated or affected through the charged conduct,” because “there were no American or foreign competitors for the uniform contracts.” See Mot. at 12. Mr. Galeotti’s full remarks, summarizing the Deputy Attorney General’s FCPA Guidelines, made clear that FCPA enforcement “is not about the nationality of the subject or where the company is headquartered. In plain terms, conduct that genuinely impacts the United States or the American people is subject to potential prosecution by U.S. law enforcement.” In fact, Zaglin and his co-conspirators competed with other American companies for contracts with the Honduran government, depriving them of a fair playing field. In any event, as discussed above, the Department of Justice determined that Zaglin’s conduct merited prosecution.”
