On April 21, a federal court in California dismissed an indictment charging three individuals with violations of the wire fraud and federal program bribery statutes (18 U.S.C. §§ 1343, 666) and conspiracy in connection with an alleged foreign bribery scheme. One of the defendants was a Venezuelan citizen employed by the International Civil Aviation Organization (ICAO), an agency of the United Nations based in Canada involved in “standardizing machine readable passports.” The other defendants were senior executives of a Ukrainian conglomerate who allegedly bribed the ICAO official in order to obtain business. All of the conduct at issue “occurred outside of the United States between three defendants who are not United States citizens, who never worked in the United States, and whose use of wires did not reach or pass through the United States.” However, the government argued that the United States had an interest in prosecuting the conduct because the United States funds a significant portion of ICAO’s activities, which implicate national security issues.
In dismissing the indictment, the court first held that neither statute contained a clear indication of congressional intent that it apply extra-territorially, as required by Morrison v. National Australia Bank Ltd., 561 U.S. 247, 254 (2010). Second, it held that the indictment violated the Due Process Clause because the defendants, who “neither lived in, worked in, nor directed any of [their] alleged conduct at the United States,” could not have reasonably anticipated being haled into court in this country. The court distinguished the cases cited by the government as involving much more contact with the United States or a misuse of federal funds, whereas this case involved “wholly foreign conduct and wholly foreign actors” and there was no indication that “even one dollar of the millions of dollars the United States presumably sent to ICAO was squandered.” In sum, the court held, the government’s theory would place “no limit to the United States’s ability to police foreign individuals, in foreign governments or in foreign organizations, on matters completely unrelated to the United States’s investment, so long as the foreign governments or organizations receive at least $10,000 of federal funding. This is not sound foreign policy, it is not a wise use of scarce federal resources, and it is not, in the Court’s view, the law.” The government has appealed to the Ninth Circuit.
Notably, the DOJ did not bring FCPA charges despite what appear to be allegations of bribes paid to employees “of a public international organization.” 15 U.S.C. § 78dd-3(f)(2). Presumably the government could not establish any of the FCPA’s statutory jurisdiction requirements, however the case is illustrative of the ever-expanding reach of the government’s foreign anti-corruption efforts. It is also a reminder that when individual defendants fight foreign corruption charges in court, convictions are not certain.