As long as political actors have existed, political actors have taken credit for filling a perceived legal gap by enacting new laws.
Time will tell of course, but query whether the recently enacted Foreign Extortion Prevention Act (FEPA) (a law which seeks to capture the so-called “demand” side of foreign bribery) was even needed.
As has been discussed on these pages over the last several years when various versions of FEPA were introduced in Congress, the Department of Justice already has several criminal statutes available to prosecute alleged “foreign officials” who receive bribes and has been prosecuting such cases for a long time.
Two examples occurred in just the past few weeks while much attention has been focused on FEPA and how it plugs a purported legal gap.
In late December (see here for the prior post) – in connection with FCPA charges against various individuals for a bribery scheme involving the Honduran National police – the DOJ also criminally charged Francisco Roberto Cosenza Centeno (former Executive Director of the Comité Técnico del Fideicomiso para la Administración del Fondo de Protección y Seguridad Poblacional (TASA) a Honduran governmental entity that procured goods for the Honduran National Police) with conspiracy to commit money laundering, substantive money laundering offenses and engaging in transactions in criminally derived property. As noted in the DOJ release, the individual “face[s] a maximum penalty of 20 years in prison on each of the money laundering offenses and 10 years in prison on the count of engaging in transactions in criminally derived property.”
More recently, last week the DOJ criminally charged Paulinus Iheanacho Okoronkwo in an interesting case. (See here for the DOJ release).
On one level, as the indictment alleges, Okoronkwo (also known as Pollie) is a dual citizen of the U.S. and Nigeria and resides in California where he is an attorney admitted to the State Bar of California and the “sole proprietor of the Law Office of Pollie Okoronkwo, where he practiced immigration law and personal injury matters, such as slip-and-fall and motor vehicle injury cases.”
On another level, as the indictment alleges, Okoronkwo was a “foreign official serving as the general manager of the NNPC’s [Nigerian National Petroleum Corporation] Upstream Division” and the indictment alleges the following relevant background.
“In or about 1998, Addax [a wholly-owned subsidiary of Sinopec Group (a Chinese SOE), was an international oil and gas corporation headquartered in Geneva, Switzerland, with a strategic focus on Africa and the Middle East] entered into a production sharing contract with the NNPC. In or about 2001, Addax and the NNPC negotiated a “side letter” to the original production sharing contract that provided favorable fiscal terms for Addax with respect to tax and royalty payments that it was required to make to the government of Nigeria. Following negotiation of the side letter, Addax and the Nigerian government had ongoing disputes concerning the calculation of tax and royalty payments.
In or about 2012, after years of failing to reach an agreement, the government of Nigeria nullified the favorable fiscal terms that had been conferred in the 2001 side letter and began to recoup past benefits that had been conferred to Addax by “overlifting,” i.e., keeping a greater share of the oil that Addax extracted than the quantity agreed upon. By in or about the end of August 2014, the government of Nigeria had recouped approximately $510 million in past benefits conferred on Addax.
Addax calculated that, if the 2001 side letter were rescinded, Addax would be obligated to repay approximately $2.76 billion for the period from 2001 to 2014 and would be deprived of approximately $2.37 billion in future benefits. Accordingly, Addax stood to incur losses in excess of $5 billion if the side letter dispute was not successfully resolved.
Addax filed a lawsuit in Nigeria for breach of contract against the NNPC. On May 25, 2015, in the last few days of the administration of Nigerian President Jonathan Goodluck, Addax and the NNPC entered into a settlement agreement in which the favorable financial terms of the 2001 side letter were reinstated and future liabilities that Addax faced were nullified.
By no later than on or about September 7, 2015, new Nigerian President Muhammadu Buhari left in place the portions of the settlement agreement resolving disputes over past benefits that Addax received but nullified the portion of the agreement that guaranteed that those terms would be kept in place going forward. Addax had calculated that the failure to apply the side letter prospectively would cost Addax approximately $2.37 billion.”
Under the heading, “The Illegal Bribery Scheme,” the indictment alleges:
“On or about October 26, 2015, Addax signed an engagement letter with the “Law Office of Pollie Okoronkwo,” purportedly based in Lagos, Nigeria. Per the terms of the letter, Addax agreed to pay $5,263,157.89, including an immediate payment of $2,105,263.16, purportedly in exchange for firm’s work as “Consultants for the negotiation and completion of a Settlement Agreement with NNPC” with respect to Addax’s dispute over drilling rights. The engagement letter also included wiring instructions that directed payment to the OKORONKWO IOLTA [Interest on Lawyers Trust Account]. In reality, the engagement letter was a ruse intended to conceal the fact that Addax’s payment to Okoronkwo constituted a bribe in exchange for his influence in securing more favorable financial terms relating to Addax’s extraction of crude oil in Nigeria, and the purported Lagos address for the Law Office of Pollie Okoronkwo housed a different business.
On or about October 28, 2015, Addax caused a bribe of approximately $2,105,263 to be transmitted to the OKORONKWO IOLTA by means of an international wire.
To ensure the favorable financial terms Okoronkwo sought on Addax’s behalf were not later revoked or revised, Okoronkwo and Addax took steps to conceal from governmental authorities, auditors, and the public Addax’s transfer of funds to the OKORONKWO IOLTA.”
As noted in the DOJ release, “Okoronkwo is charged with three counts of engaging in monetary transactions in property derived from specified unlawful activity, one count of tax evasion, and one count of obstruction of justice.” The release further states: “If convicted of all charges, Okoronkwo would face a statutory maximum sentence of 10 years in federal prison for each money laundering count, 10 years in federal prison for the obstruction of justice count, and five years in federal prison for the tax evasion count.”
