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In a 9-0 vote, the US Supreme Court overturned the conviction of former Virginia governor Virginia Bob McDonnell for public corruption under the Hobbs Act. McDonnell and his wife, Maureen, were convicted in 2014 of public corruption, charges stemming from $177,000 in gifts, luxury vacations and loans they accepted from Jonnie R. Williams Sr. The former CEO of Star Scientific Inc. Williams was a wealthy Virginia businessman who wanted the governor and his wife to promote his tobacco-based dietary supplement business.
Chief Justice Roberts, writing for the Court said, “There is no doubt that this case is distasteful; it may be worse than that. But our concern is not with tawdry tales of Ferraris, Rolexes, and ball gowns. It is instead with the broader legal implications of the Government’s boundless interpretation of the federal bribery statute.” The Court went on to find that it was prosecutorial over-reach which invalidated the conviction, not the Governor’s distasteful acceptance of gifts.
How will this impact enforcement of the Foreign Corrupt Practices Act (FCPA) going forward? From where I sit, it will not impact FCPA enforcement. It is important to remember that in the McDonnell case, the focus was on the conduct of the recipient not the payor, so any FCPA analysis will not be governed by this case.
The conviction was under the Hobbs Act which was established in 1946 and has been used to criminalize acts of robbery or extortion that affect interstate commerce, basically the equivalent of bribery. The Hobbs Act also reaches acts by public officials acting in their official capacity. A public official commits a crime when he obtains a payment to which he is not entitled knowing that it was made in exchange for official acts. The Court basically found that McDonnell’s receiving the gifts and then providing services such as scheduling meetings and the like is not illegal under the Hobbs Act. The Court said the “conscientious public officials arrange meetings for constituents, contact other officials on their behalf, and include them in events all the time. The basic compact underlying representative government assumes that public officials will hear from their constituents and act appropriately on their concerns”.
The Hobbs Act does not have the specific language of the FCPA. The FCPA prohibits actions which “(A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or (B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person;”.
Clearly the focus of the FCPA is the quid part of defendant’s actions. Even if you applied the Roberts Court discomfort with the vagueness of the FCPA language of “influencing any act or decision” it seems clear that the language “securing an improper advantage” and “in obtaining or retaining business” is sufficiently clear to pass even the scrutiny of this current Supreme Court. Fortunately there is clear court precedent for such an interpretation under the FCPA, as the Fifth Circuit Court of Appeals held, in the decision Kay v. US, 359 F.3d 738, 750-51 (5th Cir. 2004), that the plain meaning of the FCPA holds and is clear.
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