In August 2024, the DOJ announced that a “federal grand jury in the Southern District of Florida returned an indictment … charging three executives of an election voting machine and service provider company and a former Chairman of the Commission on Elections (COMELEC) of the Republic of the Philippines for their roles in an alleged bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections. […] These bribes were allegedly paid to obtain and retain business related to providing voting machines and election services for the 2016 Philippine elections and to secure payments on the contracts, including the release of value added tax payments.”
Although not mentioned in the indictment, the company at issue was Smartmatic (and related entities).
The individuals charged with Foreign Corrupt Practices Act offenses were:
- Roger Alejandro Pinate Martinez (a citizen of Venezuela and resident of Florida described as a cofounder, Chief Operating Officer and President of Company 1 who was also and employee of Company 2); and
- Jorge Miguel Vasquez (a citizen of the U.S. and executive for Company 2 in Florida who managed hardware development and manufacturing worldwide for Company 1 who reported to Pinate).
In addition, Pinate, Vasquez and Juan Andres Donate Bautista and Elie Moreno are charged with a variety of money laundering offenses.
- Bautista is described as the Chairman of COMELEC (an independent agency mandated to enforce and administer election laws in the Philippines) from on or about April 28, 2015, to in or around October 2017.
- Moreno is described as follows: “a dual citizen of Venezuela and Israel, was a Company 1 executive involved in managing Companies 1 and 3’s contracts with COMELEC in the Philippines. He served as project director for Company 3 and a Company 1 subsidiary in the Philippines, and he signed and implemented the 2016 Philippine elections contracts with COMELEC.”
Yesterday, in a Superseding Indictment, Smartmatic was also criminally charged with conspiracy to violate the FCPA’s anti-bribery provisions, money laundering conspiracy, and money laundering. (See here for the DOJ release).
2010 was the last time a business organization was criminally indicted for FCPA offenses (as opposed to a criminal information / complaint resolved through a plea agreement or deferred prosecution agreement; non-prosecution agreement; or declination with disgorgement).
The conduct at issue is the same as alleged in the original indictment.
Smartmatic is described as follows:
SGO CORPORATION LIMITED, a/k/a, “Smartmatic,” (“SGO”), headquartered in the United Kingdom, provided election voting machines and related services. The SGO corporate structure included entities, individually and collectively, commonly referred to as “Smartmatic,” “SMMT,” or “Smartmatic Group.” This included, among others: a wholly owned subsidiary organized under the laws of The Netherlands (“Smartmatic International”); a wholly owned indirect subsidiary incorporated in Delaware and registered in Florida, with an address in Boca Raton, Florida (“SMMT USA”); a wholly owned indirect subsidiary organized under the laws of and operated in the Philippines (“SMMT Philippines”), and a joint venture controlled by Smartmatic (“SMMT-TIM 2016”). SGO was a “person,” and SGO’s subsidiaries and affiliates were “agents” of SGO, as those terms are used in the FCPA, Title 15, United States Code, Section 78dd-3(a). SMMT USA was a “domestic concern” as that term is used in the FCPA, Title 15, United States Code, Section 78dd-2(h)(l).”
This Law360 article notes:
A Smartmatic spokesperson said in a statement Thursday that the company “categorically” denies the allegations, which it called “politically influenced.”
In Thursday’s statement, the Smartmatic spokesperson said the indictment “is wrong on the facts and wrong on the law.”
“We will contest the claims, and we are confident we will prevail in court,” she said.
The spokesperson added that the company believes the U.S. Attorney’s Office for the Southern District of Florida “has been misled and politically influenced by powerful interests, despite our extensive cooperation with the government. This is again, targeted, political and unjust.”
“Smartmatic will continue to stand by its people and principles,” the spokesperson said. “We will not be intimidated by those pulling the strings of power.”
