A judge in California may decide whether federal law reflected by the FCPA prevents charging foreign officials with money laundering in connection with bribes they took.
Judge George H. Wu, left, told the Justice Department that circumventing the FCPA’s ban on prosecuting foreign officials by using other charges may be wrong.
His comments came during a hearing in January last year in the case against former Thai Tourism Governor Juthamas Siriwan.
A jury in Los Angeles convicted the Greens of multiple FCPA violations. They each served six months in federal prison.
Judge Wu said the Foreign Corrupt Practices Act exempts foreign officials from being subject to prosecution for accepting bribes.
‘The FCPA contains a legislative policy to leave unpunished a well-defined group of persons who are necessary parties to the act constituting the violation of that substantive law and that is the foreign officials who accept bribes,’ he said during the hearing.
Other cases, he said, have held that prosecutors can’t circumvent the FCPA’s exclusion by alleging conspiracy.
Applying the same exclusion to money laundering would make sense, Judge Wu said.
In the Haiti telco bribery prosecution, Jean Rene Duperval, an executive at the state-owned Telecommunications D’Haiti S.A.M., was charged with money laundering. He was sentenced to nine years in prison last year after a jury convicted him. The DOJ said in related cases that Duperval was a ‘foreign official’ under the FCPA.
Judge Wu was a federal prosecutor in Los Angeles in the 1980s and early 1990s. President George W. Bush appointed him to the bench in 2007.
Jonathan Lopez from the DOJ’s Money Laundering and Bank Integrity Unit in Washington, D.C. disagreed with Judge Wu during Siriwan’s hearing. He argued that barring money-laundering prosecutions related to FCPA cases would expose the U.S. financial system to widespread misuse.
Judge Wu continued the hearing until February 21, 2013.
Siriwan and her daughter are fighting extradition from Thailand.
Judge Wu said if Thailand refuses to extradite them, he’ll likely dismiss the indictments and not rule on whether a foreign official accused of taking bribes can be charged with money laundering.
Here are excerpts from Judge Wu’s remarks at the hearing in January last year on the defendants’ Motion to Dismiss the Indictment in U.S. v. Siriwan et al:
THE COURT: No. Let me put it this way. I agree with a lot of what the government says in its responsive papers. But this is the major problem that I have in this case and, that is, this is it. You know, there’s no dispute that, you know, when Congress enacted the Foreign Corrupt Practices Act or FCPA. It exempted foreign officials from being subject to prosecution for accepting bribes under that statute as stated in United States v. Castle, 925 F.2d 831, which is a Fifth Circuit case.
The FCPA contains a legislative policy to leave unpunished a well-defined group of persons who are necessary parties to the act constituting the violation of that substantive law and that is the foreign officials who accept bribes. And other cases have said that prosecutors cannot circumvent that exclusion by alleging the crime as a conspiracy crime; and I presume one would also say the thing about — the same thing about trying to use aiding and abetting as a means of circumventing the exception of foreign officials from the Foreign Corrupt Practices Act which, in essence, is a bribery-type situation.
MR. LOPEZ: Can I respond to that, Your Honor? . . .
THE COURT: . . . I understand the point. I understand that you’re going into the money laundering act; but let’s take a look as it. I mean, if the whole point of Congress, which these, you know, cases seem to indicate, the whole point of Congress in excepting foreign officials is to avoid certain problems when you prosecute foreign officials in this country for these types of criminal acts involving bribery, et cetera.
Those are the same concerns when you attempt to go after these people for money laundering because they accepted bribes. In other words, what you’re saying is that: Oh, as long as the foreign official, you know, agrees to accept the bribe, they’re scot-free. But once the foreign official gets the money which was promised as the bribe, then they violate money laundering and, therefore, the same concerns that Congresshad in excepting foreign officials from the Foreign Corrupt Practices Act vanishes into air because the money which they were promised they have now received and, therefore, they can be guilty of conspiracy in regards to money laundering.
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THE COURT: . . . But my concern is, again, my focus is on the fact that because Congress has specifically exempted foreign officials from the — what I consider to be the bribery penumbra that I have trouble with the government’s position that they can somehow get around it by charging, you know, money laundering as — based upon the bribery as the specified unlawful activity when, you know, the foreign official is, you know, can’t be guilty of that.
And congressional concern is, you know, a situation where one is attempting to prosecute a foreign official. Because, I mean, lord knows that this country would get a little upset if other countries, you know, find that, you know, hey, by sending money to support, you know, pro-democracy elements in some foreign countries, that all the sudden in their opinion the banking system in their country has been violated and, therefore, our foreign officials should be subtract to prosecution in their country for engaging in these types of corruptions of their banking system. I just think that, you know, these are precisely the concerns that Congress had . . . .