Crime in the Suites: An Analyis of Current Issues in White Collar Defense
Oct 17
2012

DOJ Opinion on Key FCPA Issue Makes Sense, But What’s Next?

We have previously advocated for the Department of Justice to employ a more narrow reading of the term “foreign official” in the Foreign Corrupt Practices Act. Therefore, we were pleased to see that the DOJ recently issued an opinion that parsed the definition and came to the conclusion that a member of a foreign royal family was not a “foreign official” under the FCPA. Although this is a positive development, it somewhat conflicts with the DOJ’s prior opinions and accordingly will probably serve to further muddy the FCPA waters.

In February 2012, an American lobbying firm approached the DOJ to request an opinion regarding the FCPA implications of its proposed partnership with a foreign consulting group. The consulting group was to act as its sponsor in providing lobbying services for the unspecified foreign country’s embassy in the U.S. The lobbying firm was concerned that this arrangement might implicate the FCPA because the foreign consulting group was owned, in part, by a member of the foreign royal family.

On September 18, the DOJ issued a statement finding that the royal family member was not considered a “foreign official” under the FCPA. The DOJ stated that, “[W]hether a member of a royal family is a ‘foreign official’ turns on such factors as (i) how much control or influence the individual has over the levers of governmental power, execution, administration, finances, and the like; (ii) whether a foreign government characterizes an individual or entity as having governmental power; and (iii) whether and under what circumstances an individual (or entity) may act on behalf of, or bind, a government.”

As the DOJ explained, in this instance the “Royal Family Member holds no title or position in the government, has no governmental duties or responsibilities, is a member of the royal family through custom and tradition rather than blood relation, and has no privileges or benefits because of his status.” The DOJ concluded that, “the Royal Family Member does not qualify as a foreign official under [the FCPA] so long as the Royal Family Member does not directly or indirectly represent that he is acting on behalf of the royal family or in his capacity as a member of the royal family.”

The DOJ surprised us by undertaking a reasonable, thoughtful, and fact-intensive analysis in finding that the royal family member was not a foreign official. However, the new standard invoked by the DOJ conflicts with the broad reading of “foreign official” that the DOJ has previously applied, which encompasses even employees of state-owned communications companies. Surely a telecom employee does not exert much control or influence “over the levers of governmental power,” nor would his government characterize him as having “governmental power.” Yet the DOJ found telecom employees to be foreign officials.

We applaud the DOJ for taking a reasonable approach in determining whether the royal family member is a “foreign official.” We encourage the DOJ to apply the same three factors every time it analyzes who is, and is not, a foreign official.

 

 

Ifrah Law is a leading white-collar criminal defense firm that focuses on a variety of practice areas. View all.

related practices at ifrah law:
View all
tags:
,
Leave a Comment
Subscribe to Comments

Connect with Us Share

About Ifrah Law

Crime in the Suites is authored by the Ifrah Law Firm, a Washington DC-based law firm specializing in the defense of government investigations and litigation. Our client base spans many regulated industries, particularly e-business, e-commerce, government contracts, gaming and healthcare.

Ifrah Law focuses on federal criminal defense, government contract defense and procurement, healthcare, and financial services litigation and fraud defense. Further, the firm's E-Commerce attorneys and internet marketing attorneys are leaders in internet advertising, data privacy, online fraud and abuse law, iGaming law.

The commentary and cases included in this blog are contributed by founding partner Jeff Ifrah, partners Michelle Cohen, David Deitch, and associates Rachel Hirsch, Jeff Hamlin, Steven Eichorn, Sarah Coffey, Nicole Kardell, Casselle Smith, and Griffin Finan. These posts are edited by Jeff Ifrah. We look forward to hearing your thoughts and comments!

Visit the Ifrah Law Firm website