11th Circuit primed to issue key FCPA ruling

The court plans to define exactly what a “foreign official” is under the Foreign Corrupt Practices Act


October 16, 2013 •

The 11th Circuit Court of Appeals in Miami began to tackle an important foreign bribery case on Oct. 11, and the resulting interpretation of the Foreign Corrupt Practices Act (FCPA) could be crucial for all businesses conducting affairs outside the U.S.

Joel Esquenazi and Carlos Rodriguez, two ex-executives of Terra Telecommunications Corp., were previously found guilty in August 2011 of bribing Haiti’s official state-owned telecom company, Haiti Teleco, in order to receive government contracts. Under the FCPA, Esquenazi received 15 years in jail. However, lawyers for the two attempted to appeal on the basis that Haiti Teleco officials did not constitute “foreign officials” as defined by the FCPA.

The FCPA defines foreign officials as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof.” According to the defense lawyers, Haiti Teleco’s officials should not fall under the “instrumentality” category, as was originally ruled.

The 11th Circuit heard oral arguments for nearly an hour on Oct. 11, and many expect that the court could set precedent concerning a more specific definition of “instrumentality.” Narrowing instrumentality’s definition could cut down on overall FCPA litigation, as prosecutors have pushed the limits of the law under a 2011 U.S. district court decision that identified state-run company employees as foreign officials.

According to The Wall Street Journal, the government plans to make this case a mandate moving forward. As Rodriguez’s lawyer Sam Johnson told the WSJ, “The 11th Circuit is writing on a blank slate with regard to the meaning of what is a ‘foreign official’ under the FCPA. It’s obvious from the arguments the court will work hard to try to get it right.” Fellow Rodriguez lawyer David Simon concurred, telling the WSJ, “Our point is that the government hasn’t drawn a clear line, and in a criminal case you have to have a clear line.”

There is currently no timetable for the 11th Circuit to issue a final ruling in the case.


Author: `