Last week, U.S. District Court Judge Jose Martinez (S.D. of Florida) denied (here) Carlos Rodriguez’s and Joel Esquenazi’s motions for judgment of acquittal or a new trial in the Haiti Teleco case.  See here for a prior post regarding the jury verdict.

With sparse caselaw on the FCPA’s ”foreign official” element, anything a court says as to “foreign official” or “instrumentality” is worthy of a read. This post summarizes relevant excerpts from Judge Martinez’s order  including the evidence the court found sufficient to demonstrate that Teleco was an “instrumentality” of the Haitian government and that certain employees of Teleco were thus “foreign officials” under the FCPA.  As detailed below, that evidence mostly (but not exclusively) consisted of “extensive research” a former Haitian Minister of Justice did in connection with a book.

Under the heading “Evidence at Trial Regarding Teleco As A Public Entity,” the order notes that the Government called Gary Lissade to testify regarding Haitian law and public institutions and states (at pages 5-7) as follows.

“In support of the allegations regarding the FCPA and Haitian bribery law, the Government called Gary Lissade, Haiti’s former Minister of Justice and the author of a book on Haiti’s public administration, as an expert in Haitian law and Haitian public institution. [A footnote explains that Lissade conducted extensive researching, including legal research and interviews, in reaching his conclusions] Mr. Lissade explained that Teleco was widely considered to be a Haitian public entity during the relevant time period and that he had classified Teleco as part of the public administration in his 2000 book.”

“Mr. Lissade explained that Teleco was established as a private institution in 1968 but become a public entity when, around 1971-1972, the state-owned National Bank of the Republic of Haiti (“BNRH”) acquired 97% of its shares. Mr. Lissade conceded that the exact time and circumstances of this acquisition were unclear but explained that the Government’s actions and official documents from the time period reflected that the acquisition and assumption of control had occurred. Mr. Lissade also conceded that, although Teleco began to use the term “S.A.M.,” rather than “S.A.” [a footnote says that Mr. Lissade noted that S.A. designates a private corporation in Haiti and that the addition of the initial "M" indicates that the corporation is a mixed public/private enterprise] to reflect its partial state-ownership after the acquisition, Teleco never underwent any legal process to change its name.”

“Mr. Lissade testified that Teleco was 97% owned and 100% controlled by BNRH’s successor, the state-owned Bank of the Republic of Haiti (“BRH”), for many years, including during the time period charged in the indictment.  Teleco was run by a board of directors and a general director, all of whom were appointed by executive order signed by Haiti’s President, Prime Minister, and relevant Ministries.  The people who worked under these political appointees were considered to be ‘public agents’ working for the ’public administration,’ which Mr. Lissade defined as ‘the entities the state uses to perform and to give services to the people living in Haiti’ and ‘as an instrument … for the state to reach it missions and objectives and goals.’  Teleco was entitled to special treatment under Haitian tax laws, and its revenues were controlled by the BRH.”

“Mr. Lissade further testified that Haiti’s bribery laws applied to Teleco officials during the relevant time period.  In 2008, Haiti passed an asset disclosure law, intended to combat public corruption, that required certain employees of Teleco and other public institutions to declare their assets, further confirming Mr. Lissade’s opinion that Teleco had been considered a public entity during the relevant time period.”

“Mr. Lissade also explained that, in 1996, Haiti passed a modernization law intended to privatize certain state-owned companies, including Teleco, but Teleco did not actually become partially privatized until 2009-2010.”

“Mr. Lissade’s testimony that Teleco was owned and controlled by the Haitian government was corroborated by numerous witnesses and voluminous documentary evidence.  For example:  Robert Antoine testified that Teleco was a state-owned company and that, when he worked there, he was a government employee whose supervisor, Patrick Joseph, had been appointed by the President of Haiti; Jean Fourcand testified that the President of Haiti appointed his cousin, Patrick Joseph, as General Director of Teleco, the ‘state owned’ ‘national phone company’ of Haiti; Juan Diaz testified that he learned while living in Haiti that Teleco was a ‘nationalized’ company owned by the Haitian government; Antonio Perez testified that Esquenazi, Dickey, and Terra’s business partners at HAWAI told him that Haiti Teleco was owned and operated by the Haitian government and that he saw an Aon insurance application submitted by Terra to that effect; and John Marsha, who worked at Aon, testified that Esquenazi, Rodriguez, and Dickey told him that the contract they wanted to insure was with a foreign government and that the type of insurance they requested only applied to government contracts.”

Judge Martinez stated, as to the “foreign official” / “instrumentality” issue, and otherwise, that based on the above ”the evidence at trial was sufficient to support the jury’s verdict of guilty beyond a reasonable doubt and also weighed heavily in favor of the jury’s verdict.  This is not a case in which the interests of justice require that the jury’s verdict be set aside.”

Judge Martinez next addressed the defendants’ argument that the “court’s instruction regarding a state-owned enterprise pursuant to the FCPA was incorrect.”  See this prior post for the full instruction.  Judge Martinez merely stated as follows.  “This court properly instructed the jury through a non-exclusive multi-factor definition that permitted the jury to determine whether Teleco was an instrumentality of a foreign government.”

Judge Martinez concluded his order by discussing the declaration of Jean Max Bellerive, the current Prime Minister of Haiti.  As detailed in this prior post, Bellerive stated that “Teleco has never been and until now is not a state enterprise.”  Yet, as detailed in this prior post, the DOJ assisted Bellerive in revising certain statements in his declaration even though the facts in his original declaration were “truthful.”

Judge Martinez stated that the “declaration provides no newly discovered evidence and would not have affected the jury verdict. He stated that  “Mr. Bellerive’s second declaration simply clarified the contents of the first declaration” and that the “contents of the first declaration were established throughout trial and were known to Defendants during trial preparation.”

Sentencing of Rodriguez and Esquenazi is scheduled for October 25th.