Some of our favorite websites are asking whether employees of government-linked companies are really “foreign officials” under the FCPA. The DOJ has always insisted they are. But that interpretation has never been tested in court, allowing proponents to say the DOJ has taken improper liberties with the statute’s text.
We’ve never thought that argument had much promise. Our plain reading of the words in question is that employees of companies owned or run by foreign governments, or even greatly influenced by them, fit within the intended meaning of “foreign officials.” How so? The law defines them to include employees of a government or any instrumentality of it. Is a government-linked company an instrumentality?
According to the free dictionary, an instrumentality is “a subsidiary organ of government created for a special purpose.” Or it’s “the tools or means by which an organization or subset of that organization accomplishes its projects and goals.” That might describe a government-linked company. And in the Supreme Court cases we’ve checked, instrumentality is a catch-all word, like “thing.” It pops up in tax cases — to mean ships, containers, cars, roads, canals, etc. It wouldn’t be a stretch to include a state-owned enterprise as another thing.
Proponent Mike Koehler points out, correctly, that the DOJ’s expansive view of “foreign official” can produce strange results — “employees of a Delaware company perhaps being Venezuelan ‘foreign officials’ and an American citizen perhaps being a Dubai ‘foreign official.'” Spot on. The world is now thoroughly corporatized and, yes, globalized. Strange is the new normal.
Beyond that, would a federal judge be willing to abridge FCPA enforcement and presumably unleash a wave of “private” bribery by Americans overseas? Imagine the scolding from China’s rulers and our OECD anti-corruption partners. Even if a judge performed such radical surgery, we think Congress (in either party’s hands) would act before lunch to restore order.
Nonetheless, this debate has people talking, and that’s a good thing.
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Here’s the FCPA’s definition of “foreign official.” You be the judge of what’s intended and let us know what you think:
The term “foreign official” means any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.