Former U.S. Congressman Indicted for FCPA Violations

United States Congressman William J. Jefferson was indicted June 4, by a federal grand jury on charges including bribery and racketeering for allegedly using his office to corruptly solicit bribes and for paying bribes to a foreign official, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney Chuck Rosenberg for the Eastern District of Virginia announced on June 4.^[1]

The indictment alleges that from around August 2000 to around August 2005, Jefferson, who was at the time serving as an elected member of the U.S. House of Representatives, used his position and his office improperly take bribes in exchange for services provided to advance the interests of those who had allegedly bribed him.^[2]

The bribes allegedly paid to Jefferson may have included hundreds of thousands of dollars in payments from monthly fees or retainers, consulting fees, percentage shares of revenues and profits, flat fees for items sold, and stock ownership in the companies seeking his official assistance.^[3] In return for the money the government asserts that Jefferson allegedly lead official business delegations to Africa, and utilized congressional staff members to promote businesses and businesspersons.^[4] Business ventures that Congressman Jefferson sought to promote may have included: telecommunications deals in Nigeria, Ghana, and elsewhere; oil concessions in Equatorial Guinea; satellite transmission contracts in Botswana, Equatorial Guinea, and the Republic of Congo; and development of different plants and facilities in Nigeria.^[5]

The government further alleges that Jefferson violated the Foreign Corrupt Practices Act by allegedly offering, promising and making payments to a foreign official to advance the various business endeavors in which he and his family had financial interest. Jefferson was allegedly responsible for negotiating, offering and delivering payments of bribes to the official identified in the indictment as “Nigerian Official A.”^[6]

The 16-count indictment charges Jefferson with solicitation of bribes, honest services wire fraud, money laundering, obstruction of justice, violating the Foreign Corrupt Practices Act, racketeering, and conspiracy. Jefferson possibly faces a maximum of 235 years in prison if convicted on all counts.^[7]

FCPA
Congress enacted the Foreign Corrupt Practices Act (FCPA) in 1977 to stop illicit payments to foreign public officials by United States businesses and individuals.^[8] The FCPA makes it illegal to bribe foreign government officials to obtain or retain business, or to direct business to another person.^[9] it essentially states that a) it shall be unlawful for any broker or dealer, directly or indirectly, to make use of the mails or of any means or instrumentality of interstate commerce for the purpose of effecting on an exchange not within or subject to the jurisdiction of the United States, any transaction in any security the issuer of which is a resident of, or is organized under the laws of, or has its principal place of business in, a place within or subject to the jurisdiction of the United States, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors or to prevent the evasion of this chapter.^[10] However the provisions of 15 U.S.C. § 78dd shall not apply to "any person insofar as he transacts a business in securities without the jurisdiction of the United States, unless he transacts such business in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate to prevent the evasion" of 15 U.S.C. § 78dd.^[11]

Regarding payments to foreign officials, the act draws a distinction between bribery and facilitation or "grease payments", which may be permissible if they are not against local laws. A company's legal department generally still has to approve such payments. The primary distinction is that grease payments are made to an official to expedite his performance of the duties he is already bound to perform.^[12]

We have previously spoken about money laundering here.
We have previously spoken about wire fraud here.

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^[1] DOJ Press Release, U.S. Dep't of Justice website, June 4, 2007, available at http://www.justice.gov/opa/pr/2007/June/07_crm_402.html (last visited June 11, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] 15 U.S.C. §§ 78m(b), (d)(1), (g)-(h), 78dd-2, 78ff (1997), The FCPA was amended by the International Anti-Bribery and Fair Competition Act of 1998, 15 U.S.C. §§ 78dd-1 to 78dd-3, 78ff.
^[9] 15 U.S.C. § 78dd-2(a).
^[10] 15 U.S.C. § 78dd(a).
^[11] Id. at §78dd(b)
^[12] 15 U.S.C. §§ 78dd-1, et seq.