The Feds Should Take A Meeting
Monday, August 17, 2009 at 8:12PM
Richard L. Cassin in 1998 Amendments, American Rice, David Kay, Douglas Murphy, Gerald Green, Jurisdiction, Jury Instructions, Thailand

Husband-and-wife movie producers Gerald and Patricia Green are now on trial in LA for violating the Foreign Corrupt Practices Act. Prosecutors allege they paid more than $1.8 million in bribes to Juthamas Siriwan, a former governor of the Tourism Authority of Thailand, in return for $14 million in contracts to stage the Bangkok Film Festival. They're also charged with conspiracy, money laundering, obstruction, and filing false tax returns. He's 76, she's 54, and they're now facing up to five years in prison for each FCPA charge, up to 10 years for each tax count, and up to 20 years for the money-laundering and obstruction charges.

Theirs is the third FCPA-related trial this year. In July, Frederick Bourke of the Dooney & Bourke handbag company was convicted by a jury in Manhattan of conspiracy to violate the FCPA. A month later, William Jefferson, the former nine-term congressman from Louisiana, was found guilty on a similar charge (among 10 others) in Alexandria, Virginia.

We don't know how many currently-serving U.S. Attorneys or Assistant U.S. Attorneys had seen an FCPA trial before this year. But the number could be zero or close to it. So going into the recent trials, prosecutors didn't have a lot of courtroom-tested resources to draw from. That might explain why the government's proposed jury instructions on the FCPA counts in the Greens' case are copied verbatim from Judge Shira Scheindlin's instructions in Frederic Bourke's trial. There's one problem though. Those instructions contained some errors.

The most glaring mistake concerns the "interstate commerce" element of an FCPA offense. That instruction, as they'd say in Hollywood, is just so 1997. As Prof Mike Koehler explained on his blog,
The [Bourke] instructions say (on pg. 24) that a "domestic concern" (as Bourke is under FCPA-speak) "must have intended to make use of the mails or a means or instrumentality of interstate commerce" in order to violate the FCPA. This is the so-called "territorial" jurisdictional provision found at 78dd-2. However, the 1998 amendments to the FCPA expanded the jurisdictional reach of the FCPA, as applied to "domestic concerns," by adding an alternative "nationality" jurisdictional provision found at 78dd-2(i) which removes the interstate commerce / U.S. territorial nexus requirements. Thus, a "domestic concern" can be charged and found liable for a substantive FCPA violation even if the prohibited activity took place entirely outside of the U.S. The jury instruction that the "domestic concern" "must have intended to make use of the mails or a means or instrumentality of interstate commerce" is thus just plain wrong.
Another problem in the Bourke instructions and repeated by the government's requested instructions in U.S. v. Green concerns the definition of "foreign official." The instructions depart from the text of the FCPA by inserting a reference to "an instrumentality" where it shouldn't be. True, the word "instrumentality" pops up all over the FCPA, but not in the place in the statute's definition of a "foreign official" where the instructions put it. The government has gone one instrumentality too far.

How serious are the errors? Not very. In Bourke's trial, the anachronistic "interstate commerce" element probably hurt the government's case but not Bourke's defense. Prosecutors had to present evidence that wasn't really needed to prove his FCPA-related violation -- i.e., Bourke's use of an instrumentality (that word again) of interstate commerce while offering or making a corrupt payment to a foreign official. And the reference to "instrumentality" in the description of a foreign official is a bit confusing but not a big deal -- probably harmless error. Still, the government might want to have a quick huddle and check its notes.

The jury instructions from United States v. Bourke, S1 05 Cr. 418 (SAS) (S. D. N. Y.) can be downloaded here.

The government's proposed jury instructions in United States v. Green (United States District Court for the Central District of California, Case #: 08-59(B) - GW) can be downloaded here.

Read all our posts about U.S. v. Green here.

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More from Hollywood: A couple of years ago, LA Times reporter Glenn F. Bunting wrote a great story (here) about the budget for the movie "Sahara." The information he extracted from documents filed in a court case included this:
"Courtesy payments," "gratuities" and "local bribes" totaling $237,386 were passed out on locations in Morocco to expedite filming. A $40,688 payment to stop a river improvement project and $23,250 for "Political/Mayoral support" . . .
Since that story appeared, lawyers and pundits have wondered when the FCPA hammer would fall on Hollywood's overseas "community relations" practices. Could the Greens' case be the first of many?

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New Addresses: The wrageblog has a fascinating post (here) about prison assignments in white-collar criminal cases. Here's what it says about two convicted FCPA defendants who started serving their time this year:
Douglas Murphy of American Rice, sentenced to 63 months after his FCPA conviction, is serving his sentence at the Federal Correctional Institution in El Reno, a medium security facility. However, David Kay, who was tried with Murphy, is serving his 37 month sentence at Texarkana, a low security facility.
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Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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