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Second Circuit Judge Raymond Lohier Is Just Plain Wrong


Compared to many other federal statutes, there has been little caselaw interpreting the Foreign Corrupt Practices Act in its 45 years of existence.

Substantive opinions by appellate courts are even more rare.

Thus, it is often a big deal when there is an appellate court decision interpreting the FCPA. Even a dissenting opinion – even a policy statement in a dissenting opinion – is notable.

As highlighted in this post, recently the Second Circuit – once again – sided with FCPA defendant Lawrence Hoskins on an FCPA issue. Specifically, the court held “that the district court properly granted Hoskins’s motion for judgment of acquittal for violations of the FCPA because there was no agency or employee relationship between Hoskins and Alstom Power, Inc.”

As discussed in the prior post, Judge Raymond Lohier (pictured) dissented and concluded that – given the common-law definition of agency – the jury’s verdict was sound. Specifically, Judge Lohier stated: “To prove the existence of an agency relationship under the circumstances of this case, the Government was not required to show that API could cut Hoskins out of the scheme entirely. It had to prove only that API could terminate his involvement — and thus revoke his authority — at least in part. In my view, the Government made that more limited showing.”

In his dissent, Judge Lohier continued:

“Finally, a broader point. The FCPA was amended in 1998 to bring the United States into compliance with the world’s most influential treaty to combat transnational bribery, the Organization for Economic Cooperation and Development (OECD) Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions, known as the “OECD Convention.” See S. Rep. No. 105-2177 (1998) (expressing Congress’s intention that the 1998 amendments to the FCPA “conform it to the requirements of and to implement the OECD Convention”). The convention was intended to target more bad actors, not fewer. See Kevin E. Davis, Between Impunity and Imperialism: The Regulation of Transnational Bribery, at 5–9 (2019) (describing the “OECD paradigm” that “anything foreign legal institutions can do to help combat transnational bribery is likely to be worthwhile,” including “prohibit[ing] a broader range of conduct, target[ing] more actors, impos[ing] more severe sanctions, and get[ting] more and more agencies involved in enforcement”); see also OECD Conv. Preamble (“[A]ll countries share a responsibility to combat bribery in international business transactions.”). The OECD Convention calls on signatories to “take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to” bribe a foreign public official, whether “directly or through intermediaries,” OECD Conv. Art. 13 1.1 (emphasis added), and to assert jurisdiction “when the offence is committed in whole or in part in its territory,” OECD Conv. Art. 4.1.

With that in mind, “[i]t makes little sense to permit the prosecution of foreign affiliates of United States entities who are minor cogs in the crime,” United States v. Hoskins, 902 F.3d 69, 104 (2d Cir. 2018) [hereinafter Hoskins I] (Lynch, J., concurring), while immunizing those who, acting as an agent of the domestic company’s foreign parent, actively participate in the company’s commission of FCPA violations. Neither Hoskins nor the majority has pointed to any specific language or history suggesting that Congress intended to cover only third-party intermediaries, or to exclude employees like Hoskins whose responsibility was, at least in part, to help a domestic concern locate and hire bribe-paying intermediaries.

More worrying still, the OECD is currently considering whether this Court’s initial decision in Hoskins I limiting liability under the FCPA has placed the United States in violation of the Convention. See OECD, Implementing the OECD Anti-Bribery Convention: United States Phase 4 Report (2020), at 36–39, available at 12 Report-ENG.pdf (last visited on Aug. 10, 2022) (“To the extent that recent U.S. case law developments create a divergence between how U.S. courts apply conspiracy law to those who conspire to bribe domestic and foreign officials, the lead examiners consider that this would violate the Convention.”). Today’s decision cannot possibly help in that regard. Under Hoskins I, Hoskins cannot be found guilty of conspiracy to violate the FCPA, nor can he be held liable for aiding and abetting the commission of bribery. See Hoskins I, 902 F.3d at 83–84.

Hoskins I left open the possibility that Hoskins could be held liable as an “agent of a domestic concern.” See id. at 72. But now the majority blocks that path as well. This result is “unlikely to have been specifically anticipated or intended” by the drafters of the FCPA, id. at 104 (Lynch, J., concurring), let alone the OECD Convention. “If anything,” as the Government observes, “a restrictive definition of agent” under the FCPA “could put the U.S. in violation of the OECD Convention to the extent that it prevents prosecution of those responsible for bribery that occurred in part in this country.” Gov’t Reply Br. at 46 n.2.  Congress, or the Supreme Court, will eventually have to clarify the statute’s scope and correct our course.”

Judge Lohier’s suggestion that the FCPA was amended in 1998 “to bring the United States into compliance” with the OECD Convention is just plain wrong.

As detailed in my “foreign official” declaration (and as further discussed in my amicus brief encouraging the Supreme Court to hear the Esquenazi “foreign official” case), it is clear that Congress was informed and understood that the FCPA’s 1998 amendments would not fully conform the FCPA to the OECD Convention.  Rather, the OECD Convention was described throughout the relevant legislative history as “closely modeling” the FCPA; being “very similar” to the FCPA; being “largely consistent” with the FCPA; and “closely tracking” the FCPA.

Indeed, Congress incorporated certain aspects of the OECD Convention into the FCPA’s 1998 amendments, but not others. For instance: (i) while the FCPA contains an express statutory exception for facilitating payments, the OECD Convention does not; (ii) while the FCPA prohibits certain corrupt payments to political parties, the OECD Convention does not; and (iii) while the FCPA requires that corrupt payments be for the purpose of “obtain[ing] or retain[ing] business,” the OECD Convention contains no such requirement.

In fact, the general issue of whether the FCPA (post 1998 amendments) and the OECD Convention are identical was litigated in U.S. v. Kay where both the trial court and appellate court rejected the DOJ’s position that the FCPA captured payments to secure an “improper advantage” because the OECD Convention captured such payments.

The trial court decision stated:

“The OECD Convention had asked Congress to criminalize payments made to foreign officials ‘‘ ‘in order to obtain or retain business or other improper advantage in the conduct of international business.’’ . . . Congress again declined to amend the ‘‘obtain or retain business’’ language in the FCPA . . . . Congress did not insert the ‘‘improper advantage’’ language into the ‘‘obtain or retain business’’ provision of the FCPA.”

Although the Fifth Circuit overruled the trial court’s decision granting the defendants’ motion to dismiss, the appellate court likewise stated as follows concerning the FCPA’s 1998 amendments:

“When Congress amended the language of the FCPA, however, rather than inserting ‘any improper advantage’ immediately following ‘obtaining or retaining business’ within the business nexus requirement (as does the Convention), it chose to add the ‘improper advantage’ provision to the original list of abuses of discretion in consideration for bribes that the statute proscribes.’’

The OECD Convention was not self-executing and it is black letter law that if a treaty is not self executing it is not the treaty, but the implementing legislation, that is the law of the land.

Thus, it is not even a U.S. legal issue to the extent the OECD is – in Judge Lohier’s words “currently considering whether this Court’s initial decision in Hoskins I limiting liability under the FCPA has placed the United States in violation of the Convention.” Moreover, who really cares what the OECD thinks. After all, the OECD Phase 4 Report referenced by Judge Lohier was drafted by “experts from Argentina and the United Kingdom.” Why should a U.S. court care what “experts from Argentina and the United Kingdom” think about U.S. jurisprudence and whether the jurisprudence conforms to a non self-executing convention under U.S. law?

Judge Lohier is also just plain wrong when he stated that “Hoskins I left open the possibility that Hoskins could be held liable as an “agent of a domestic concern.” … [b]ut now the majority blocks that path as well.” (emphasis added).

The majority did not “block that path.”

Indeed, the majority opinion specifically notes “on the the interlocutory appeal, we noted that the government could proceed on its alternate theory—that Hoskins was an “agent of a domestic concern” and therefore could be “liable…. for the substantive FCPA counts charged in the indictment.”

Rather, the majority opinion held that “the government failed to present sufficient evidence to allow the jury to find an agency relationship.” (Emphasis added).

Even though Judge Lohier was just plain wrong on certain issues in dissent, he was correct when he said that Congress may “eventually have to clarify the [FCPA’s] scope and correct our case.”

After all, the DOJ (or SEC) can only enforce a law (the FCPA) that Congress passed and as Congress intended. If the DOJ (or SEC) doesn’t like this, the prudent approach would be for the enforcement agencies to persuade Congress to amend the law (the FCPA), not to argue to a court to expansively interpret a law (the FCPA) outside of its explicit terms and contrary to the intent of Congress.

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