U.S. Supreme Court Declines To Hear FCPA Case Concerning Definition Of “Foreign Officials”

November 7, 2014 — The Foreign Corrupt Practices Act (FCPA) is a powerful weapon to stop multinational companies from attempting to win or retain business abroad by paying bribes or bestowing lavish gifts on foreign officials with state-owned enterprises. Aimed at eradicating the harm to honest business dealings in a global market that is caused by foreign bribery, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 allows for substantial financial rewards to insider informants and others who blow the whistle on FCPA violations.

High Court Refuses To Disturb Eleventh Circuit’s Ruling That “Foreign Official” Under FCPA Includes Managers And Employees Of Foreign State-Run Businesses

On October 6, 2014, the United States Supreme Court refused to hear a case that would have considered what constitutes a “foreign official” under the FCPA. The decision lets stand the broad interpretation urged by the U.S. Justice Department and the SEC that the definition of a “foreign official” includes government officials as well as officers or employees of state-owned or state-controlled entities.
The issue arose in a case in which Joel Esquenazi and Carlos Rodriguez were convicted of FCPA violations. Esquenazi and Rodriguez, former executives of Terra Telecommunications Corp., had been convicted for their participation in bribing officials with Haiti Teleco, Haiti’s state-owned telecommunications company. Esquenazi received the longest prison sentence ever imposed in an FCPA case — fifteen years. Rodriguez was sentenced to seven years.
On appeal, the pair argued that they had not bribed “foreign officials” as defined under the FCPA because the Haiti Teleco officials who received the money worked for a foreign state-owned company rather than a government agency. The Eleventh Circuit Court of Appeals rejected that argument and held that an “instrumentality” under the FCPA includes any entity that the foreign government controls that performs a function treated by the foreign government as its own. The two men then petitioned the high court to restrict the FCPA’s definition of the term to include only foreign government officials.
As reported in JD Supra, the Supreme Court’s decision not to hear the case means that the Eleventh Circuit’s decision remains good law.

Whistleblowers Notify Government About FCPA Violations

While Waters & Kraus is not handling this particular FCPA case, we are representing whistleblowers in similar matters involving foreign bribery violations. If you have comparable claims against your employer or another business, contact us or call our qui tam attorneys at 855.784.0268 to learn more about our practice and how we can collaborate with the government to redress illegal foreign bribery schemes. Our experienced lawyers, such as Loren Jacobson and Caitlyn Silhan in the firm’s Texas office, are working to level the playing field in international business operations.

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