Did Bill Clinton violate the Foreign Corrupt Practices Act?
Thursday, April 23, 2015 at 9:28AM
Richard L. Cassin in Bill Clinton, Business Nexus Element, Conspiracy, Frank Giustra, Jurisdiction, Kazakhstan, New York Times, Nursultan Nazarbayev, Statute of Limitations, UrAsia Energy, agent

Image courtesy of the Clinton FoundationIn 2005, former president Bill Clinton traveled to Kazakhstan to meet with its leader, Nursultan Nazarbayev. Clinton flew to Almaty with the Canadian mining financier Frank Giustra on Giustra's private jet, the New York Times reported Thursday. Giustra was there to secure rights to Kazakhstan's rich uranium deposits.

At a dinner, the Times said, "Clinton handed the Kazakh president a propaganda coup when he expressed support for Mr. Nazarbayev’s bid to head an international elections monitoring group, undercutting American foreign policy and criticism of Kazakhstan’s poor human rights record by, among others, his wife, then a senator."

"Within days of the visit," the New York Times said, "Mr. Giustra’s fledgling company, UrAsia Energy Ltd., signed a preliminary deal giving it stakes in three uranium mines controlled by the state-run uranium agency Kazatomprom."

In 2008, the New York Times reported that Giustra had donated $31.3 million to the Clinton Foundation, a philanthropic organization controlled by Bill, Hillary, and Chelsea Clinton.

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The U.S. Foreign Corrupt Practices Act prohibits giving or promising to give anything of value to a foreign official to obtain or retain business. Individuals who violate the FCPA can be jailed for up to five years. A copy of the statute is here (pdf).

Did Bill Clinton give Nursultan Nazarbayev "anything of value" by supporting his bid to head an international elections monitoring group? The Times called Clinton's support "a propaganda coup" for the Kazakh president. That suggests lots of reputational value to Nazarbayev.

There haven't been any FCPA enforcement actions based entirely on the giving of non-financial benefits. But the law doesn't say money or goods have to change hands, just "anything of value."

The FCPA Guidance from the DOJ and SEC says at pages 14 and 15:

An improper benefit can take many forms. While cases often involve payments of cash (sometimes in the guise of “consulting fees” or “commissions” given through intermediaries), others have involved travel expenses and expensive gifts. Like the domestic bribery statute, the FCPA does not contain a minimum threshold amount for corrupt gifts or payments. . . . Regardless of size, for a gift or other payment to violate the statute, the payor must have corrupt intent -- that is, the intent to improperly influence the government official.

The FCPA has never been used to prosecute apparent political favors, such as those described in the New York Times story.

Was Bill Clinton's support for the Kazakh president intended "to obtain or retain business?" Frank Giustra and his company, UrAsia Energy, won business in Kazakhstan. And Giustra in turn donated more than $30 million to the Clinton Foundation.

The so-called business nexus element of the FCPA ("to obtain or retain business") has been interpreted broadly. The DOJ and SEC have entered into resolutions with companies alleged to have paid bribes to obtain --

(1) government inspection reports and laboratory certifications

(2) reductions in annual employment tax obligations

(3) reductions in general tax obligations

(4) refunds on previous tax payments

(5) customs clearance for goods or equipment that were improperly or illegally imported

(6) customs clearance for goods delayed due to the failure to post bonds with sufficient funds to cover duties and tariffs

(7) encourage the repeal or amendment of national regulations limiting foreign investments

(8) repeal of a government decree requiring an environmental impact study to be conducted

(9) expedited government registration certifications required by law to produce, warehouse, or market products in the country, and

10) beneficial changes to laws and regulations relating to land development.

No FCPA enforcement action has been based on an alleged business nexus as indirect as Giustra's contributions to the Clinton Foundation.

Bill Clinton was subject to the FCPA as an American citizen. The FCPA could also reach his conduct if he was acting as an agent for Giustra or UrAsia, and if either Giustra or his company was a "domestic concern" under the FCPA.

Domestic concerns can be an individual who is a citizen, national, or resident of the United States. Domestic concerns can also be companies or organizations with "a principal place of business in the United States or which is organized under the laws of a state of the United States or a territory, possession, or commonwealth of the United States." We don't know if Giustra or UrAsia were domestic concerns in 2005.

The statute of limitations for FCPA offenses is five years. Bill Clinton's trip to Kazakhstan was in 2005. The prosecution of violations that might have happened then would be time barred.

But the statute of limitations for an alleged FCPA conspiracy would run from the most recent act in furtherance of the conspiracy. The DOJ often alleges FCPA conspiracy counts, and uses them to include in complaints alleged behavior that happened more than five years earlier. Under the conspiracy statute, it also can be easier for the DOJ to assert personal jurisdiction.

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The New York Times story, "Cash Flowed to Clinton Foundation as Russians Pressed for Control of Uranium Company," by Jo Becker and Mike McIntire published April 23, 2015 is here.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
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