Today’s post is from Mike Dearington, a rising 3L at Vanderbilt Law School and FCPA Professor reader.

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U.S. v. Siriwan Filing Sheds Light on Extradition Relations with Thailand in Pivotal Justice Department Case

Prosecutors in United States v. Siriwan submitted an extradition status report (here) last Friday in the Central District of California, revealing a potentially strained diplomatic relationship between officials in the U.S. and the Thai Attorney General’s office.  Prosecutors charged Juthamas Siriwan, ex-governor of Tourism Authority of Thailand, and her daughter, Jittisopa, in 2009 with accepting bribes from Hollywood movie executives Gerald and Patricia Green in exchange for lucrative contracts.  (See here for the previous FCPA Professor post.)  The Greens were convicted in 2010 and sentenced to six months imprisonment.  (See here for the previous post.)

In the DOJ’s filing, prosecutors expressed discomfort with providing an extradition-status update pursuant to court order, which they noted was “highly unusual in a public setting and strongly discouraged for many policy and case specific reasons.”  One of these reasons, no doubt, was that the status update forced prosecutors to admit that the U.S. “has not yet received a response from Thailand regarding extradition.”

The Siriwan case is interesting also because it could be instrumental to DOJ efforts to curb foreign bribery, as it is an example of prosecutors uniquely targeting a “foreign official.”  One of the oft-cited shortcomings of the FCPA is that it is purely a “supply side” enforcement scheme.  In other words, the FCPA targets only those paying bribes, and does not prohibit receipt of such bribes by the foreign officials who demand them.

Indeed, critics have declared that, by targeting only the supply side, the law fails to appreciate the nature of foreign bribery.  Bribery is not economically beneficial to corporations because of the risks and costs, yet corporate representatives nonetheless often pay bribes because they are economically extorted by foreign officials.  Officials like Siriwan have been known to set the bidding process and are often first to broach the subject because of their powerful bargaining positions.  Although the FCPA prohibits only bribe payments—and not receipts—the Siriwan case is somewhat of a DOJ workaround.

In Siriwan, prosecutors did not charge FCPA violations, as the Siriwans made no bribery payments.  But prosecutors did charge substantive money-laundering.  The Money Laundering Control Act (MLCA) prohibits the conveyance of funds to or from the U.S. “with the intent to promote the carrying on of specified unlawful activity.”  Just what unlawful activity qualifies is an open question here.

Prosecutors argue that the Greens’ bribe payments represent specified unlawful activity, as do the Siriwans’ violations of Thai laws.  On the other hand, the Siriwans contend the money-laundering charges are pulling “double duty” and that one cannot promote illegal payments by receiving illegal payments.  The Siriwans’ motion to dismiss (see here for the prior post) has been pending since August 2011.

Siriwan may determine whether money-laundering is a viable tactic in the DOJ’s efforts to curb foreign bribery.  The DOJ has expressed an interest in demand-side prosecutions.  In 2009, prosecutors charged Robert Antoine and Jean Rene Duperval, formerly of Haiti Teleco, a state-owned national telecommunications company, with money laundering after each allegedly accepted bribes.  (See here for the prior post.)  Antoine pled guilty and was sentenced to four years in prison; Duperval was convicted and sentenced to nine years in prison in May 2012.

If prosecutors prevail in Siriwan, we can expect the DOJ to pursue a greater number of foreign officials under the MLCA, reminiscent of the way prosecutors pursued foreign executives in the 1990s/2000s under U.S. Antitrust laws due to a lag in foreign anti-trust enforcement.  If U.S. prosecutors can bring foreign officials within their purview, the DOJ may have more tools to reign in foreign bribery.