Source: https://globalanticorruptionblog.com/2018/09/18/the-us-can-probably-charge-bribe-taking-foreign-officials-as-conspirators-or-accomplices-in-fcpa-cases/
Timestamp: 2019-04-19 15:17:43+00:00

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Since Castle, so far as I can tell, this principle that the US government can’t prosecute bribe-taking foreign officials as conspirators in an FCPA violation (or, similarly, as accomplices to an FCPA violation under another statute, 18 U.S.C. § 2(a)), seems to have become generally accepted, largely unchallenged by the US government, and treated as clearly correct as matter of legal doctrine. And it matters a great deal as a policy matter: If the Castle ruling had gone the other way, than the FCPA—complemented by the general conspiracy and complicity statutes—would give the US government a very powerful tool, for better or worse, to prosecute bribe-taking foreign government officials, at least those with sufficient ties to the US to establish personal jurisdiction (an important qualification I’ll return to later). I’d always assumed, without much reflection, that Castle was rightly decided. But after some digging into the case law, prompted largely by the more recent decision in Hoskins, and re-reading the Castle opinion, I think that Castle’s broad holding is doctrinally incorrect. If certain other conditions hold, a bribe-taking foreign official can be guilty as an accomplice to or co-conspirator in an FCPA violation, even though the foreign official could not directly violate the FCPA.
The starting point here is the well-established principle under US law that, as a general matter, a party may be guilty of conspiracy (under § 371) or complicity (under § 2(a)) even if that party did not commit all, or even any, of the elements of the underlying federal crime. Indeed, a party can be guilty of a conspiracy to commit a crime, or complicity in a federal crime, even if that party cannot, as a matter of law, commit the underlying crime (because the party is not a member of the specific class of individuals to whom the criminal statute applies). If that principle applied in cases like Castle, then there would be no question that the bribe-taking foreign officials were co-conspirators and/or accomplices.
The Castle court thought that Gebardi barred the conclusion that bribe-taking foreign officials were co-conspirators in FCPA violations. As the court reasoned, “Congress intended in both the FCPA and the Mann Act to deter and punish certain activities which necessarily involved the agreement of at least two people, but Congress chose in both statutes to punish only one party to the agreement.” Furthermore, the Castle court noted, the fact that the FCPA criminalizes only bribe-giving, and conspicuously fails to criminalize bribe-taking, is in notable contrast to other federal anti-bribery statutes that address bribery of federal public officials (e.g. here, here, and here), as those other statutes prohibit both bribe-giving and bribe-taking.
The Hobbs Act, then, is like the FCPA in that it only explicitly criminalizes one side of a bribe transaction: While the FCPA criminalizes paying a bribe but not taking a bribe, the Hobbs Act criminalizes taking a bribe but does not (explicitly) criminalize paying a bribe. But can the private party who pays a bribe to a public official be guilty of conspiracy (with the public official) to violate the Hobbs Act? The question has arisen repeatedly, and the Supreme Court and multiple courts of appeal have given a consistent answer: Yes, but only if the bribe-payer is more actively involved in suggesting or encouraging the bribe transaction—not if the bribe-payer is, as the Supreme Court put it in its 2016 decision in Ocasio v. United States, “merely complying with an official demand.” As Ocasio explained, “Holte and Gebardi make perfectly clear that a person may be convicted of conspiring to commit a substantive offense that he or she cannot personally commit. They also show that when that person’s consent or acquiescence is inherent in the underlying substantive offense, something more than bare consent or acquiescence may be needed to prove that the person was a conspirator.” In so holding, Ocasio was not breaking any new ground: A long string of court of appeals opinions has held that a bribe payer may be guilty of conspiracy to violate the Hobbs Act (or as an accomplice to such violation)—even though the relevant provision of the Hobbs Act applies directly only to the bribe-taking public official—as long as the bribe-payer “exhibits conduct more active than mere acquiescence.” (See also here, here, and here.) A similar logic has been applied in the context of other anticorruption statutes that, like the Hobbs Act, only explicitly criminalize one side of an unlawful transaction.
Now, there are two important qualifications to the above conclusion.
First, even if the above analysis is correct, it doesn’t mean that the US will be able charge all foreign officials who actively solicit bribes in FCPA cases as accomplices or co-conspirators. Some officials, particularly heads of state, may be protected by foreign sovereign immunity doctrines. And even for those who aren’t, the U.S. would still have to establish personal jurisdiction over the defendant, consistent with the Due Process Clause of the US Constitution. This will typically entail establishing that the foreign government official has sufficient “systemic and continuous” contacts with the US to establish general jurisdiction, or that the FCPA violation in question arose from the defendant foreign official’s conduct within US territory (say, the payment or agreement to make a payment was concluded in US territory).
Second, even if the Castle court’s analysis is flawed, it’s possible that its holding might be justified on other grounds. This may bring us back to Hoskins, which relied in part on the reasoning of cases like Gebardi, but emphasized in particular the alleged affirmative legislative policy under the FCPA to limit extraterritorial complicity or conspiracy liability. I explained in my last post why I don’t think Hoskins’ analysis is correct on this point, but someone who finds Hoskins persuasive with respect to the limits on extraterritorial applications of complicity and conspiracy liability in FCPA cases might endorse the outcome in Castle even if they find my critique of Castle’s reasoning persuasive. That said, it’s perhaps worth pointing out that the Castle rule and the Hoskins rule don’t always lead to the same conclusion. Consider a foreign public official who takes a bribe from a US firm while in US territory. The Hoskins holding would not (by itself) bar a charge against the official for conspiracy to violate the FCPA, since such a charge would not be extraterritorial, but the Castle rule would bar such a charge. Similarly, a non-US co-conspirator whose relevant acts are all abroad but who is not the bribe-taking official (for example, someone like Mr. Hoskins), would be protected by the Hoskins rule but unaffected by the Castle rule.
I’m not sure, as a policy matter, whether it would be a good idea for the US government to be able to charge bribe-taking foreign officials (over whom the US can properly assert personal jurisdiction) with conspiracy or complicity in FCPA violations. That seems to me a hard question, and one that merits further thought. But as a legal matter, the idea that such officials cannot be charged as FCPA accomplices or conspirators—a view that many people (me included, until very recently) take to be both settled and settled correctly—is almost certainly wrong, in the sense of being inconsistent with the relevant case law. At the appropriate time, perhaps the US government should revisit this question and consider testing the issue by bringing charges in an appropriate case.
This entry was posted in Commentary and tagged 18 U.S.C. 2, 18 U.S.C. 371, aider and abettor liability, conspiracy, conspirator liability, extraterritorial jurisdiction, Foreign Corrupt Practices Act, Gebardi v United States, Hobbs Act, immunity from prosecution, jurisdiction, Mann Act, United States v. Castle, United States v. Holte, US v. Hoskins by Matthew Stephenson. Bookmark the permalink.
While it’s clear that this is a purely legal analysis, I find the policy side of this question extremely interesting. I have to admit that I was rather settled in my thinking about this question too, up until now – somehow the Castle precedent in my head was set as an unquestionable rule (thank you for shaking it up!). I probably like the idea that the FCPA could be applied to foreign officials – mostly because I have seen many investigations related to the FCPA charges in foreign countries fall flat even after the foreign national prosecutors receive memos from the US prosecutors about actual convictions in US related to foreign officials. I would be very interested to hear your thoughts on the practical policy implications of what you are suggesting in this post (and the one from 11th Sept). Would expanding the FCPA application to foreign officials taking a bribe mean that the US needs to sign separate legal cooperation agreements with foreign countries so that the US Prosecution could actually reach the foreign officials? If not, I find it hard to imagine how the foreign countries would just agree to extradite their foreign officials to US based on charges as sensitive as corruption (it is even harder to imagine given that those foreign countries may have very high levels of corruption, resulting in their corrupt foreign officials being part of, say, the state capture).
Summarizing my very long question (sorry for being so detailed – this really raised many interesting questions for me and it shows), would you see this actually happening in practices US in cases of FCPA application for foreign officials? What path would see to be legally feasible for this?
Great questions, to which I don’t (yet) have any good answers. As you rightly note, I limited myself in the post to a legal analysis, partly so as not to bite off more than I can chew in one post, but partly because I’m myself genuinely unsure whether it would be a good idea, as a matter of policy, for the US to charge bribe-taking foreign officials as abetters and/or co-conspirators in FCPA cases.
One thing worth re-emphasizing is that, as I mentioned in the post, there are separate limitations on the ability of US prosecutors to bring such charges, including Due Process limits on personal jurisdiction over foreign defendants and head-of-state immunity doctrine. In addition, you’re correct that in many cases the U.S. wouldn’t be able to convince the foreign jurisdiction to extradite. Still, it’s quite possible that in some cases all of these barriers could be overcome — as they were in Castle itself. You could imagine a lower-level (though still senior) foreign official (or ex-official), with substantial assets in the US who travels here frequently, being charged and tried in the US. After all, the US does (I believe) bring criminal charges against foreign nationals for extraterritorial conduct with some frequency, especially in the context of money laundering and drug trafficking.
But you’re absolutely right to point out how politically sensitive it would be for the US to bring criminal charges against a foreign government official for accepting bribes from a US company (or a US issuer), especially if the bribe transaction took place entirely on foreign soil. Even if the US could legally do it, it might not be wise. At the same time, though, the foreign official might be a genuinely bad actor, and the conduct might have adverse effects on US parties, and perhaps might have even taken place (partly) in the US–and the foreign jurisdiction might have no interest in prosecuting or lack the capacity to do so. If so, then there’s quite a good case to be made for the US to bring charges, if we presume (as I argued in the original post) that Castle is wrongly decided. This is just a long-winded way of saying what I said above: I’m not sure.
Ruta and Professor Stephenson, many thanks for your comments to this interesting piece. I’ll caveat all of what I have to say with the following: My knowledge of the FCPA, the Mann Act, and Gebardi is limited to what I learned last year in Professor Wu’s “Law & the International Economy” course.
Anyway, I wanted to pick up on the open policy question that isn’t resolved in the piece. (N.B. From a doctrinal standpoint, I am convinced by Professor Stephenson’s legal analysis that a bribe-taker could be charged conspiratorially with an FCPA violation.) Foreign sovereign immunity and jurisdictional requirements aside, one policy benefit that I could envision resulting from a COA or SCOTUS decision overturning Castle is that the government would have leverage with the bribe-taker to convince them to testify against the bribe-giver. In other words, in a scenario in which the bad actor the government really wants to ensure a conviction against an American bribe-giver, being able to offer immunity to the bribe-taker (i.e., a foreign official) in exchange for testimony could make FCPA cases easier to make (which would, theoretically, propel deterrence efforts).
I understand I have asked you to take the additional and even more uncertain intellectual step with my question and I thank you for taking your time to do that.
I was also thinking about what you call the really “bad actor” and what role it could play in such cases – I agree that there would be a difference where such a public official would actively extort bribes from US companies. I also really agree that such cases could be relatively simpler where as you put it “the conduct might have adverse effects on US parties, and perhaps might have even taken place (partly) in the US–and the foreign jurisdiction might have no interest in prosecuting or lack the capacity to do so”.
Meanwhile, though, while the FCPA enforcement does not reach the foreign officials, I wonder if the US would be willing to do more in cooperating with foreign jurisdictions. I am always bitterly reminded of the most recent FCPA case in Lithuania. In 2012, Data Systems & Solutions LLC (DS&S) paid an $8.82 million criminal penalty in a case where the DS&S was accused of paying bribes to officials employed by the Ignalina Nuclear Power Plant, a state-owned nuclear power plant in Lithuania, to secure contracts to perform services for the plant (https://www.justice.gov/opa/pr/data-systems-solutions-llc-resolves-foreign-corrupt-practices-act-violations-and-agrees-pay). When the Lithuanian journalists found out about this and contacted our local law enforcement agencies to inquire whether those Lithuanian officials will be indicted too, there seemed to have been a total confusion on behalf of the law enforcement agencies. In the end, they concluded that the bribes were paid in 1999-2004, therefore the Lithuanian side of the investigation was dismissed due to statutes of limitation with the public officials experiencing exactly zero responsibility for that… This prompted me to think that Lithuanian law enforcement agencies had no clue that the investigation was being carried out in the US before the results were made public. I understand that in some cases such secrecy might be predetermined by the fact that tipping off foreign countries might hinder the investigation itself (where there is a reason to believe that such tips may leak). Meanwhile, I wonder if in other cases the US could actually timely inform the foreign law enforcement agencies so that they could timely begin an investigation on their own behalf and ensure that there is at least a chance that the “foreign officials” are investigated and indicted by their home country. Again, it might be that it is already happening, but is simply confidential (and the unfortunate example of Lithuania was an exception).

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