InfoBytes Blog
2nd Circuit affirms acquittal of former transportation and energy industry executive
On August 12, the U.S. Court of Appeals for the Second Circuit upheld a lower court’s decision to partially acquit a former executive of a French multinational transportation and energy company after a federal jury found him guilty of seven counts related to the Foreign Corrupt Practices Act (FCPA) and four counts of money laundering. The former executive, a British national, was employed by the company’s U.K. subsidiary and involved in a bribery scheme to secure public contracts in Indonesia for the company’s U.S. subsidiary. The 2nd Circuit agreed that the government failed to prove that the former executive was covered by the FCPA as an agent of a domestic concern, but left the money laundering convictions intact.
In 2019, a jury in the U.S. District Court for the District of Connecticut found the defendant guilty of one count of conspiracy to violate the FCPA, six counts of substantive FCPA violations, and four counts of money laundering, for his involvement in a scheme to bribe Indonesian officials in exchange for granting his company’s U.S. subsidiary, a power generation equipment manufacturer, a power plant construction contract. After the guilty verdict, he filed a Rule 29(a) motion for a judgment of acquittal, arguing as to the FCPA counts that the government “failed to prove that he was an agent of [the subsidiary], the relevant domestic concern.” The 2nd Circuit had previously held that accomplice and co-conspirator liability was not available in the case, leaving agency liability. (Covered by InfoBytes here.)
As previously covered by InfoBytes, in 2020, the district court agreed that the evidence at trial did not establish that the subsidiary exercised “control over [the former executive’s] actions sufficient to demonstrate agency” and acquitted him of the FCPA-related counts after determining that the government failed to prove at trial that the defendant was an “agent” of a domestic concern.
On appeal, a divided three-judge panel affirmed the lower court’s decision, concluding that “[t]here was no explicit or implied agency or employee relationship between [the defendant and the company’s U.S. subsidiary] such that the elements of an agency relationship were proven beyond a reasonable doubt.” The majority held that lack of control held by the subsidiary over the defendant was fundamental in determining whether he was acting as an agent of the subsidiary. A principal’s accountability for the actions of an agent depends on its ability to select and control the agent and terminate the agency relationship, as well as an agent’s agreement to act on the principal’s behalf, the majority wrote. “[T]he fact that [the defendant] collaborated with and supported [the subsidiary and a co-defendant] does not mean he was under their control within the meaning of the FCPA,” the majority explained.