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Friday Roundup

Briefing complete,  an isn’t it ironic follow-up, and going for the gold.  It’s all here in the Friday roundup.

Briefing Complete In Historic “Foreign Official” Challenge

This previous post highlighted the appeal of Carlos Rodriguez and Joel Esquenazi to the 11th Circuit on a host of issues, including whether the trial court erred as a matter of law in its jury instruction regarding what constitutes an “instrumentality” of a foreign government – and thus who are “foreign officials” under the FCPA.  As noted in the post, this is a historic appeal, the first time in the FCPA’s history that “foreign official” will be squarely before an appellate court.  This previous post highlighted the DOJ’s response brief.

Yesterday lawyers for Rodriguez and Esquenazi filed reply briefs here and here.

Among other things, Rodriguez’s brief argues as follows.  “This Court should reject the Government’s assertion that the OECD Anti-Bribery Convention requires that this Court affirm the jury instruction incorporating the government function interpretation.  […] Before the United States adopted the OECD 1997 Convention on Combating Bribery in 1998, the United States had no obligation to prohibit foreign bribery.  Thus, the law of nations sheds no light on what Congress intended when it adopted the relevant definition of foreign official in 1977.   In 1998, when Congress amended the FCPA in light of the OECD’s Convention, Congress did not add “public enterprise” to the definition of foreign official.  This Court should not apply terms from the Convention that Congress chose not to adopt into the FCPA.”

Among other things, Esquenazi’s brief argues that the “government’s untethered definition of instrumentality cannot stand,” “the government engages in a selective and misleading reading of the FCPA’s legislative history,” and that the “government’s vehemence proves too much.”  As to the later point, the brief states as follows.  “The Government spends a significant part of its brief arguing that its broad (and fatally flawed) definition of “instrumentality” is crystal clear.  First, few statutory terms have received such extensive governmental resuscitation efforts. Second, there is a difficult-to-ignore, growing consensus among observers (including two former United States Attorneys General) that the Government is misreading “instrumentality.”

Regarding my “foreign official” declaration (here) that the DOJ is seeking to exclude from the record, the brief states as follows.  “The Government protests Esquenazi’s citation to Professor Michael J. Koehler’s declaration addressing the legislative history of the FCPA, which was filed in United States v. Carson.  Aside from the analysis contained in the Koehler declaration, the substance of the declaration is the legislative history of the FCPA. The Court can surely take notice of legislative history, and evaluate the utility and accuracy of Professor Koehler’s declaration for itself. But the Government’s claim that the declaration of a professor filed in another criminal proceeding and under penalty of perjury is somehow of lower status than a law review article reviewed by law students strains credulity.”

David Simon (Foley & Lardner – here) leads the appellate team for Rodriguez.  Markus Funk (Perkins Coie – here) leads the appellate team for Esquenazi.

Isn’t It Ironic Follow-Up

In this prior post, I asked isn’t it ironic, don’t you think, that while the U.S. is bringing enforcement actions against companies for conduct that includes providing $600 bottles of wine, Cartier watches, cameras, kitchen appliances, business suits, and executive education classes to individuals deemed “foreign officials,” the U.S. has legitimized corporate influence over government in this country?   I noted that this uncomfortable truth will be clear on display as the elections unfold.

Sure enough, earlier this week, the Wall Street Journal had a page one article “Movie Mogul’s Starring Role in Raising Funds for Obama” (here) detailing Jeffrey Katzenberg’s extensive political contributions and close ties to President Obama.  Hosting a dinner that raised $15 million for President Obama.  Check.  Writing a $2 million check to jump start a super PAC supporting President Obama.  Check.  A planned $40,000 per person dinner with President Obama.  Check.

The WSJ article notes that “Mr. Katzenberg’s fundraising prowess has earned him access and a role as the informal liaison between Hollywood and the White House, as the industry continues seeking government help against online piracy” among other issues.

If President Obama was a foreign official and expensive wine was served at the dinner, such allegations might very well find their way into an FCPA enforcement action … and have already.  If the super PAC was a charitable donation and President Obama a foreign official, such allegations might very well find their way into an FCPA enforcement action … and have already.

Isn’t it ironic don’t you think?

But the irony does not stop there.

As noted in the article, among the access that Katzenberg had was attending a State Department lunch during the recent U.S. visit of China’s presumed future leader Xi Jinping.  The lunch occurred in the context of Hollywood’s eagerness to tap into the lucrative Chinese market.

As noted in this previous post, it was widely reported this past spring that the SEC has sent letters of inquiry to several Hollywood studios, including Katzenberg’s DreamWorks Animation, seeking information about potential inappropriate payments and how the companies interact with certain government officials in China.

Isn’t it ironic don’t you think?

Going for the Gold

It’s interesting to witness the lengths FCPA Inc. will go to market its compliance services.  After dozens of London Olympic, Bribery Act, FCPA, are you prepared type pieces, up next is the Winter Olympics in Sochi, Russia, and with that a marketing opportunity.   This recent law firm piece states as follows.  “With the conclusion of the 2012 Summer Olympics in London, the world’s eyes will soon turn to Sochi, the Black Sea resort city in Russia, which will host the 2014 Winter Olympics. In addition to serving as the backdrop for the usual feats of athletic prowess and national pride, the Sochi games may also be fertile ground for prosecutions under the United States’ Foreign Corrupt Practices Act (FCPA). The U.S. government’s actions in this setting will serve as a signal to any company doing business abroad that it must be proactive in ensuring compliance with the FCPA.”

As Above the Law recently observed here, the FCPA “freak-out session is entertaining to watch.”


A good weekend to all.

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