Cable Reveals 'Foreign Policy' Impact Of Jefferson's FCPA Case

Reporters Bruce Alpert and Jonathan Tilove at the New Orleans Times-Picayune found a WikiLeaks cable with a tie to ex-Congressman William Jefferson's prosecution for bribery and FCPA-related offenses.

The internal State Department assessment from 2005 said Nigeria's 'then-president, Olusegun Obasanjo, was hoping the FBI would get the dirt on Vice President Atiku Abubakar and his wife, Jennifer Douglas, as part of its probe of Jefferson, thereby derailing Abubakar's expected run for president,' according to the Times-Picayune story.

The secret cable was written four months after the FBI found $90,000 cash in Jefferson's freezer. The DOJ said Jefferson planned to use the money to bribe Vice President Abubakar in exchange for a telecommuinications contract for a Jefferson-linked company.

After an eight-week trial in Alexandria, Virginia, a jury acquitted Jefferson in 2009 of the only substantive FCPA charge he faced. But he was convicted on 11 other counts, including conspiracy to violate the FCPA. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes.

Jefferson, 64, a former nine-term congressman from Louisiana, was sentenced to 13 years in prison. He's free pending his appeal to the U.S. Fourth Circuit in Richmond, Virginia.

Abubakar failed to gain Nigeria's presidency in 2007 and 2011, the Times-Picayune said.

The cable was classified 'secret' by Consul General Brian L. Browne at the U.S. Consulate in Lagos.

View an extract from the September 14, 2005 cable 'Nigerian VP's Political Future Dims' here.

More Delay In Jefferson's Appeal

The U.S. Fourth Circuit Court of Appeals won't hear former Congressman William Jefferson's appeal until late October. 

His appellate argument was first set for May this year. But his lawyer's illness pushed the date to September, and a crowded calendar force the appeals court to reschedule until sometime between October 25 and 28.

Here's a full report from Bruce Alpert at the New Orleans Times-Picayune.

Three years ago, Jefferson, now 64, became the first member of Congress to be charged with violating the Foreign Corrupt Practices Act. Two years later, he became the first individual in nearly twenty years to be acquitted of a substantive FCPA charge.

But he was convicted on an FCPA conspiracy count. Now he's asking an appeals court to toss the conviction and order a new trial.

As the Times-Picayune's Alpert said, "The case is best known for the $90,000 the FBI found hidden in the freezer of Jefferson's Washington, D.C., home. Prosecutors said the marked bills had been given to Jefferson by a cooperating witness for what agents believed was intended to be a bribe to an African official. Jefferson was not convicted on that count."

After an eight-week trial in Alexandria, Virginia, a jury acquitted Jefferson of the only substantive FCPA charge he faced. But he was convicted on 11 other counts, including conspiracy to violate the FCPA. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes.

Judge Tim Ellis sentenced Jefferson to thirteen years in prison but freed him pending his appeal to the fourth circuit.

Jefferson's conspiracy count contained three objects: to solicit bribes, to deprive citizens of honest services by wire fraud, and to violate the FCPA. Because the bribery and honest services objects were tainted by erroneous jury instructions, he's arguing, the FCPA-related object was also tainted and should be tossed.

"Count 1 would have to be retried because one of the alleged objects of the conspiracy (violation of the FCPA) involves neither bribery nor honest-services wire fraud," Jefferson's appeal brief said.

On the rest of the counts, Jefferson said he was acting as a private citizen, while a corruption statute he was convicted under applies only to public acts by elected officials.

The U.S. Fourth Circuit Court of Appeal (pictured above) sits in Richmond, Virginia.

Worst FCPA Prosecutions Ever

We have enormous respect for those who serve the public, including the prosecutors at the DOJ. Without them, the 'rule of law' would just be pretty words.

But everyone is human and stuff happens.

So today we're looking at the DOJ's worst five FCPA enforcement actions of all time. Some defendants on the list faced stacked charges. Or the DOJ overreached at the sentencing phase. Or the prosecutions were a mistake to begin with.

Again, we mean no disrespect to anyone. Decisions made at the start of a case can look different later on, when all the facts are in. That's why hindsight is perfect and real life isn't.

But our job is to talk about FCPA enforcement, warts and all. And warts there sometimes are, as these five prosecutions show.

We've listed them in reverse order, with Number One being the worst FCPA enforcement decision ever.

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Number 5. Gerald and Patricia Green. The government stacked a lot of charges against the Hollywood power couple, and that apparently displeased the judge. There was conspiracy to violate the FCPA, nine substantive FCPA counts, seven money-laundering counts, and a tax charge. The Greens -- he's now 79 and she's 56 -- were facing 30 to 40 years in prison. The government wanted ten years. But the judge sentenced them to just six months in jail. Then, displaying a petty spirit, the DOJ filed a notice of appeal against the 'short' sentences. By then the government had seized almost everything the Greens owned, including their company, pension assets, and family home, leaving them indigent.

Number 4. Frederic Bourke. The co-founder of high-end handbag maker Dooney & Bourke was accused of making an investment with Viktor Kozeny, while knowing that Kozeny might bribe foreign officials with some of the money. Bourke wasn't accused of bribing anyone, or approving any bribes, or helping arrange them. Just investing in a project where he knew or should have known that bribery might happen. That's a stretch for the FCPA. On top of that, Bourke himself lost his entire $7 million investment he made with Kozeny, and dragged in family and friends, including Senator George Mitchell, who lost $200,000. After being convicted of conspiracy to violate the FCPA, Bourke faced five years in prison. The judge sentenced him to a year and a day, saying Bourke looked like a victim. He's appealing his conviction.

Number 3. William Jefferson. The former United States Congressman was given $100,000 by an undercover cooperating witness, allegedly for Jefferson to use to bribe a Nigerian official. In a later raid on Jefferson's house, $90,000 of the cash was found in his freezer, and there was no evidence Jefferson had used any of the money to bribe anyone. But to get the cash-in-the-freezer evidence admitted in court, the DOJ alleged the money was part of a scheme to violate the FCPA. The jury didn't buy the substantive FCPA charge -- the cash was in the freezer, not in the pocket of a Nigerian official. Jefferson, however, was convicted of conspiracy and of being a corrupt politician. He's appealing.

Number 2. Bobby Jay Elkin was a former country manager in Kyrgyzstan for tobacco company Dimon Inc, now called Alliance One International. He pleaded guilty to a one-count criminal information charging him with conspiracy to violate the FCPA. He paid more than $3 million to officials in Kyrgyzstan, mainly to keep corrupt Kyrgyz Tax Inspection Police off the company's back. The DOJ wanted him sentenced to 38 months in prison. The judge let him off with no jail time and even let him travel back overseas (with another employer). At sentencing, the judge in Roanoke, Virginia said Elkin faced a choice of "either you do this or lose your job." The judge called Elkin a hero who protected his workers when rioting broke out.

Number 1. James Giffen. The DOJ indicted Giffen, an oil consultant and middleman, for paying $84 million in bribes to the president of Kazakhstan and other foreign officials. Giffen said, and eventually convinced the judge, that he was keeping the CIA informed about everything he did, and that he always had the agency's go-ahead. After a six-year prosecution, Giffen was allowed to plead guilty to a misdemeanor tax charge, for which he received no punishment. The judge described him as a "conduit for communications on issues vital to America’s national interest in the region.” In other words, Giffen was a patriot and a hero.

Jefferson Appeals FCPA Conspiracy Charge

Three years ago, William Jefferson became the first member of Congress to be charged with violating the Foreign Corrupt Practices Act. Two years later, he became the first individual in nearly twenty years to be acquitted of a substantive FCPA charge.

But he was convicted on an FCPA conspiracy count. Now he's asking an appeals court to toss the conviction and order a new trial.

Prosecutors alleged that in 2005, he hid $90,000 in the freezer at his Washington home. It was part of $100,000 provided by the government's cooperating witness and intended, the government said, to be used to bribe a Nigerian official to steer business to firms in which Rep. Jefferson's family had interests.

After an eight-week trial in Alexandria, Virginia last year, a jury acquitted Jefferson of the only substantive FCPA charge he faced. But he was convicted on 11 other counts, including conspiracy to violate the FCPA. He was also found guilty of soliciting and taking bribes, depriving citizens of honest services, money laundering and racketeering, and conspiracy to solicit bribes.

Judge Tim Ellis sentenced Jefferson to thirteen years in prison but freed him pending his appeal to the fourth circuit.

Jefferson's conspiracy count contained three objects: to solicit bribes, to deprive citizens of honest services by wire fraud, and to violate the FCPA. Because the bribery and honest services objects were tainted by erroneous jury instructions, he's arguing, the FCPA-related object was also tainted and should be tossed.

"Count 1 would have to be retried because one of the alleged objects of the conspiracy (violation of the FCPA) involves neither bribery nor honest-services wire fraud," his brief says.

On the rest of the counts, Jefferson says he was acting as a private citizen, while a corruption statute he was convicted under applies only to public acts by elected officials.

We questioned the substantive FCPA count against Jefferson before his trial began. "The money so spectacularly found in the freezer -- it was in the freezer; it was not in the bank account of a foreign official," we said.

Although the cash seemed to prove Jefferson's innocence on the substantive FCPA charge, it was also ideal evidence of his bad intentions as a public servant. That's what made the FCPA count important to the government's case.

Jefferson's appeal isn't expected to be decided until at least the middle of next year.

Download a copy of William Jefferson's brief in his appeal to the United States Court of Appeals for the Fourth Circuit dated November 15, 2010 in U.S. v. William J. Jefferson here.

Will Jefferson Walk?

Former Congressman William Jefferson's chances of winning his appeal got a big boost from the Supreme Court two weeks ago.

In Skilling v. United States, the justices narrowed the reach of the honest services statute. That law was behind most of the 11 counts Jefferson was convicted on. He was acquitted of the single substantive FCPA charge he faced but was found guilty on a conspiracy count that included both an FCPA and an honest-services element.

Jefferson, 63, was sentenced in November to 13 years in prison. He's free pending appeal.

The former nine-term Congressman from New Orleans was the first and only U.S. public official to be charged under the FCPA since it was enacted in 1977. His case will always be remembered for the $90,000 in cash found in his freezer. The money was part of $100,000 given to him by government informant Lori Mody. Prosecutors said Jefferson planned to use it to bribe Nigeria's then vice president, Atiku Abubakar.

According to a report in the Times Picayune, Judge T.S. Ellis III included in his definition of honest services fraud "concealed conflicts of interest." The Supreme Court ruling narrows the statute's use to exclude conflicts of interest. Jefferson's lawyers are saying there's no way to determine what role the conflicts allegations played in the honest-services guilty verdicts or other fraud counts, which should all be thrown out.

The honest-services object probably also dooms Count 1 of the indictment. It alleged three separate illegal conspiracies -- to solicit bribes, deprive citizens of honest services, and violate the FCPA. We argued before the Skilling ruling that the FCPA-related conspiracy count against Jefferson should be tossed. The jury's verdict form did not require it to specify which of the three illegal conspiracies the panel believed he engaged in. So his conviction on Count 1 may or may not have included a finding that he conspired to violate the FCPA. Jury accountability was lacking, and Judge Ellis himself said after the trial he regretted the way the verdict form was written.

The 4th Circuit Court of Appeals will now decide what to do with Jefferson's case. The most likely scenario is a remand to Judge Ellis, for him to decide how to apply the Supreme Court's ruling and perhaps to modify Jefferson's sentence. The ex-Congressman's lawyers are unlikely to be satisfied with anything less than a new trial.