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Seng Seeks Supreme Court Review

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This previous post highlighted how the Second Circuit affirmed Ng Lap Seng’s Foreign Corrupt Practices Act and related conviction“for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.”

The issues in the Second Circuit appeal were: (i) whether the United Nations is an “organization” within the meaning of 18 U.S.C. 666; (ii) whether the jury was correctly instructed as to controlling law, particularly as pertains to bribery in light of McDonnell v. United States (see here for the prior post concerning the Supreme Court’s 2016 decision construing 18 USC 201 – the domestic bribery statute – particularly the meaning of “official act”; and (iii) whether the evidence was insufficient to support a guilty plea.

The bulk of the Second Circuit’s decision concerned 18 U.S.C. 666 regarding “theft or bribery concerning programs receiving federal funds.” Regarding the so-called McDonnell challenge, given that 18 USC 201 contains different language than the FCPA (as well as section 666), it is not surprising that the Second Circuit rejected the McDonnell challenge because, in the words of the court, 18 USC 201’s “definition of ‘official act,’ which informs the McDonnell standard, does not delimit the quid pro quo elements of 666 and FCPA bribery.”

Recently, Seng filed this petition seeking Supreme Court review.

As stated in the petition, the questions presented are:

1. Whether the generic term “organization” in §666 should be construed to include quasi-sovereign public international entities like the United Nations.

2. Whether McDonnell’s official act requirement applies to §666 and FCPA prosecutions like this one and, if so, whether it was satisfied here.

As to the second question, the brief states in pertinent part (internal citations omitted):

“To be sure, neither §666 nor the FCPA specifically refers to bribery in exchange for an “official act.” But neither do the statutes prohibiting honest services fraud and Hobbs Act extortion, under which McDonnell was charged and convicted. The Court interpreted those statutes (with the government’s agreement) to incorporate the “official act” provision of 18 U.S.C. §201(a)(3) because that was the only way to cabin them to the kinds of bribery claims that the federal government may constitutionally prosecute. Here too, the official act requirement applies because that is the only way to ensure that the public bribery theory under which the government proceeded comports with the Constitution. Given the constitutional concerns that arise whenever the government seeks to criminalize an interaction between the public and a public official, the official act requirement must be met in all public official bribery cases, regardless of the specific statutes under which the government chooses to charge.

If anything, those constitutional concerns have even greater force (and the official act requirement is even more pressing) in the international context of this case, where federal anti-corruption statutes were invoked to prosecute a foreign national based on interactions with foreign ambassadors to the UN. It is not at all clear what actions by the UN or its ambassadors qualify as “official acts,” and permissible practices in this context may be far different from what is considered acceptable in the United States. The risk of chilling appropriate public discourse, and the due process problems of lack of fair notice and arbitrary enforcement, are thus even more substantial. And it is at least as important for the United States to avoid setting imprecise standards for interactions with foreign or UN officials that may conflict with foreign norms or UN rules as it is for the federal government to avoid “setting standards of good government for local and state officials.”

Indeed, unconstrained by an official acts requirement, §666 and the FCPA (like other federal anti-corruption statutes) would risk becoming void for vagueness. Section 666 criminalizes payments made “with intent to influence or reward” a covered agent “in connection with any business [or] transaction” valued above the statutory threshold. The FCPA is, if anything, even broader; it criminalizes not only payments made to “influenc[e] any act or decision of [a] foreign official in his official capacity” or “induc[e] such foreign official to do or omit to do any act in violation of [his] lawful duty,” but also payments made to “secur[e] any improper advantage.” Like the expansive definition of “official act” that the government advocated in McDonnell each of those standards is nebulous enough to raise significant vagueness concerns—especially in the UN context, where foreign norms on what conduct constitutes public corruption may be far different from American standards, and where the proper official duties of a foreign ambassador to the UN may be far from clear.

That problem reaches its zenith under the third prong of the FCPA. Criminalizing any payment for “any improper advantage,” without any further limitation, would create a wholly indeterminate (and therefore unconstitutionally vague) standard. It cannot be criminal to seek an advantage, and yet no one can know what sort of “advantage” the government will deem “improper” in any given case.The official act requirement is thus especially critical to limit the otherwise “standardless sweep” of §666 and the FCPA.”

The notion that the FCPA criminalizes any payment to a foreign official for “any improper advantage” is false and represents a significant statutory interpretation error by Seng’s counsel at Kirkland & Ellis.

True, the FCPA’s anti-bribery provisions do contain the words “improper advantage” but set forth below is the statutory scheme.

“anything of value to

 any foreign official for purposes of

(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or

(B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality,

in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;

The notion that the FCPA generally prohibits payments to foreign official to secure an improper advantage was specifically addressed (and rejected)  by both the trial court and the appellate court in United States v. Kay, a case involving payments to Haitian “foreign officials” for the purpose of reducing customs duties and sales taxes a company owed the Haitian government.

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 likewise court 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.’’

Recently, the DOJ filed this opposition brief. In pertinent part, the DOJ stated (internal citations omitted):

“Unlike Section 201, neither Section 666 nor the FCPA specifically refers to an “official act.” Nor does a circuit conflict exist on whether either requires proof of one. Rather, the courts of appeals that have addressed the issue have held that they do not.

In any event, this case would be an unsuitable vehicle for addressing the second question presented, because petitioner’s view that the government was required to prove an official act in the context of this case does not provide any basis for relief from his convictions.”

The Supreme Court has never substantively addressed the FCPA in the statute’s 42+ year history and it is unlikely to accept Seng’s petition.

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