MOTION TO DISMISS THE FIRST SUPERSEDING INDICTMENT

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JANET I. LEVINE (STATE BAR NO. 94255)
MARTINIQUE E. BUSINO (STATE BAR NO. 270795)
CroweII & Moring LLP
515 South FIower Street, 40th FIoor
Los AngeIes, CaIiIornia 90071-2258
Phone: (213) 622-4750
Fax: (213) 622-2690
EMAIL: iIevine:croweII.com
EMAIL: mbusino:croweII.com
Attornevs Ior DeIendant
Steve K. Lee
JAN L. HANDZLIK (STATE BAR NO. 47959)
THOMAS H. GODWIN (STATE BAR NO. 255384)
GREENBERG TRAURIG LLP
2450 CoIorado Avenue, Suite 400 East
Santa Monica, CaIiIornia 90404
Phone: (310) 586-6542
Fax: (310) 586-0542
EMAIL: handzIiki:gtIaw.com
EMAIL: godwint:gtIaw.com
Attornevs Ior DeIendants Lindsev ManuIacturing
Companv and Keith E. Lindsev
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
UNITED STATES OF AMERICA,
PIaintiII,
v.
ENRIQUE FAUSTINO AGUILAR
NORIEGA, ANGELA MARIA
GOMEZ AGUILAR, LINDSEY
MANUFACTURING COMPANY,
KEITH E. LINDSEY, and
STEVE K. LEE,
DeIendants.
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CASE NO. CR 10-1031(A)-AHM
DEFENDANTS` NOTICE OF
MOTION AND MOTION TO
DISMISS THE FIRST
SUPERSEDING INDICTMENT;
MEMORANDUM OF POINTS AND
AUTHORITIES; }PROPOSED¡
ORDER (FILED UNDER
SEPARATE COVER)
Date: March 21, 2011
Time: 3:00 p.m.
PIace: Courtroom 14
)
Case 2:10-cr-01031-AHM Document 220 Filed 02/28/11 Page 1 of 33 Page ID #:3010
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TABLE OF CONTENTS
Page(s)
TabIe oI Authorities..............................................................................................iii
MEMORANDUM OF POINTS AND AUTHORITEIS....................................... 2
I. INTRODUCTION....................................................................................... 2
II. ARGUMENT .............................................................................................. 5
A. The Court ShouId Dismiss The FSI Now Because Under
No Set OI Facts Can The Government EstabIish Everv
EIement OI The Charges................................................................... 5
B. EmpIovees OI State Owned Enterprises Are Not
Foreign OIIiciaIs ............................................................................... 6
1. The PIain Meaning OI InstrumentaIitv¨ ExcIudes
State Owned Corporations...................................................... 6
C. Anv Ambiguitv In The Term InstrumentaIitv¨ Is Erased
Bv The LegisIative Historv OI The Fcpa, And In Anv Case,
This Court ShouId ResoIve Anv Ambiguitv In Favor OI The
DeIendants ...................................................................................... 13
1. The Historv oI the FCPA Shows that Congress
DeIiberateIv Chose Not to Target Bribes Intended to
InIIuence State Owned Corporations.................................... 14
a. Congress Reiected BiIIs ExpIicitIv Addressing
Pavments to State Owned Corporations When It
Passed the FCPA........................................................15
b. 1988 Amendments to the FCPA ReIIect the
Omission oI State Owned Corporations Irom the
Statute`s Ambit...........................................................17
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c. The 1988 Amendments Further IIIustrate That
Congress Did Not Consider State Owned
Corporations to be InstrumentaIities¨....................... 19
2. The RuIe oI Lenitv Requires that the Court Dismiss
Because, at a Minimum, the Government`s Interpretation
oI InstrumentaIitv¨ Is Not UnambiguousIv Correct ........... 21
D. II InstrumentaIities¨ Does IncIude State Owned Enterprises,
The Statute Is UnconstitutionaIIv Vague........................................ 22
E. At A Minimum, The Statute Is Vague As AppIied To The
Conduct AIIeged In the FSI ............................................................ 23
III. CONCLUSION......................................................................................... 25
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TABLE OF AUTHORITIES
Page(s)
CASES
Circuit Citv Stores. Inc. v. Adams.
532 U.S. 105 (2001) ......................................................................................... 7, 8
Edwards v. 360 Commcns,
189 F.R.D. 433 (D. Nev. 1999) .......................................................................... 14
Forbes v. Napolitano,
236 F.3d 1009 (9th Cir. 2000)............................................................................ 22
Kolender v. Lawson,
461 U.S. 352 (1983) ........................................................................................... 23
Levi Strauss & Co. v. Abercrombie & Fitch Trading Co.,
F.3d, 2011 WL 383972 (9th Cir. Feb. 8, 2011) ............................. 6, 7, 9, 13
Public Citizen v. Department of Justice,
491 U.S. 440 (1989) ........................................................................................... 13
Religious Tech. Center v. hollersheim,
796 F.2d 1076 (9th Cir. 1986)............................................................................ 14
Skilling v. United States,
130 S. Ct. 2896 (2010) ........................................................................... 22, 23, 25
Smith v. Goguen,
415 U.S. 566 (1974) ........................................................................................... 23
United States v. Brooks,
610 F.3d 1186 (9th Cir. 2010).............................................................................. 7
United States v. Carson. et al.,
No. SA CR 09-00077-JVS (C.D. CaI.)............................................................. 4, 5
United States v. Covington.
395 U.S. 57 (1969) ............................................................................................... 5
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United States v. Esquenazi. et al., No. 09-21010-CR-JEM (S.D. FI.) ...................... 4
United States v. Flores,
404 F.3d 320 (5th Cir. 2005)................................................................................ 5
United States v. Granderson,
511 U.S. 39 (1994) ....................................................................................... 12, 21
United States v. King,
244 F.3d 736 (9th Cir. 2001)............................................................................ 7, 8
United States v. Napier,
861 F.2d 547 (9th Cir. 1988).............................................................................. 21
United States v. Nguven. et al.,
No. 08-522-TJS (E.D. Pa.) ................................................................................... 4
United States v. Panarella,
277 F.3d 678 (3d Cir. 2002) ................................................................................. 6
United States v. Santos,
553 U.S. 507 (2008) ................................................................................. 7, 13, 21
United States v. Shortt Accountancv Corp.,
785 F.2d 1448 (9th Cir. 1986).............................................................................. 5
STATUTES
15 U.S.C.
§ 78dd-2.............................................................................................................. 17
§ 78dd-2(a)(1)....................................................................................................... 9
§ 78dd-2(a)(2)....................................................................................................... 9
§ 78dd-2(b) ......................................................................................................... 10
§ 78dd-2(h)(2)(A)................................................................................................. 3
§ 78dd-2(h)(2)(B) ............................................................................................... 10
18 U.S.C.
§ 1346 ................................................................................................................. 23
§ 1839 ................................................................................................................. 12
28 U.S.C. § 1603(b) (enacted Oct. 21, 1976) .......................................................... 12
Dodd-Frank WaII Street ReIorm and Consumer Protection Act, Pub. L. No.
111-203, 124 Stat. 1376, § 1504 (2010)............................................................... 9
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Foreign Corrupt Practices Act. Pub. L. No. 95-213, 91 Stat. 1494 (1977)............. 17
InternationaI Anti-Briberv and Fair Competition Act oI 1998, Pub. L. No.
105-366, 112 Stat. 3302 (1998).......................................................................... 20
Omnibus Trade and Competitiveness Act oI 1988, Pub. L. No. 100-418, 102
Stat. 1107 (1988) (amending the Foreign Corrupt Practices Act oI 1977
(Pub. L. No. 95-123)) ......................................................................................... 19
PriviIeges and Immunities oI InternationaI Organizations Act. 22 U.S.C. §
288 ...................................................................................................................... 10
OTHER AUTHORITIES
American Heritage Dictionarv (4th ed. 2000) ...................................................... 7, 8
Blacks Law Dictionarv (9th ed. 2009) ..................................................................... 7
Business Accounting and Foreign Trade Simplification Act. Joint Hearing
before the Subcomm. on Securities and the Subcomm. on International
Finance and Monetarv Policv of the Comm. on Banking. Housing. and
Urban Affairs. 97th Cong. 151 (1981) ............................................................... 18
Exec. Order No. 13,395, 71 Fed. Reg. 3203 (Jan. 13, 2006) .................................. 10
Exec. Order No. 13,524, 74 Fed. Reg. 67803 (Dec. 16, 2009) ............................... 10
Fed. R. Crim. P.
12(b)(2)................................................................................................................. 5
12(d)...................................................................................................................... 5
H.R. 15149, 94th Cong. §§ 2(e) & (h) (1976)......................................................... 16
H.R. 3815, 95th Cong. (1977) ........................................................................... 16, 17
H.R. 7543, 95th Cong. (1977) ................................................................................. 16
H.R. REP. NO. 95-640 (1977)................................................................................... 11
H.R. REP. NO. 95-831 (1977) (ConI. Rep.) ............................................................. 17
Multinational Corporations and United States Foreign Policv. Hearings
Before the Subcomm. on Multinational Corporations of the Comm. on
Foreign Relations, 94th Cong. 1-2 (1975) (Statement oI Sen. Church,
Chairman oI Subcomm.) .................................................................................... 11
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Organization Ior Economic Cooperation and DeveIopment Convention on
Combating Briberv oI Foreign PubIic OIIiciaIs in InternationaI Business
Transactions, Dec. 4, 1960, 12 U.S.T. 1728, 206 U.N.T.S. 143.................. 19, 20
S. 305, 95th Cong. (1977).................................................................................. 16, 17
S. 3741, 94th Cong. (1976)................................................................................ 15, 16
S. REP. NO. 95-114 (1977)....................................................................................... 11
S. REP. NO. 99-486 (1986)....................................................................................... 18
hebsters II New College Dictionarv (3d ed. 2005) ............................................. 7, 8
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TO: UNITED STATES ATTORNEY ANDRE BIROTTE JR., ASSISTANT
UNITED STATES ATTORNEY DOUGLAS M. MILLER, AND UNITED
STATES DEPARTMENT OF JUSTICE SENIOR TRIAL ATTORNEYS
NICOLA J. MRAZEK AND JEFFREY GOLDBERG:
PLEASE TAKE NOTICE that on Mondav, March 21, 2011, at 3:00 p.m., or
as soon thereaIter as the matter mav be heard, in the Courtroom oI the HonorabIe
A. Howard Matz, deIendants Lindsev ManuIacturing Companv, Keith E. Lindsev,
and Steve K. Lee, bv and through their counseI oI record, wiII move this Court Ior
an order dismissing the First Superseding Indictment.
This motion is based on the accompanving Memorandum oI Points and
Authorities, aII IiIes and records in this case, and anv such arguments and evidence
as mav be presented at or beIore the hearing on this motion.
DATED: Februarv 28, 2011 RespectIuIIv submitted,
JANET I. LEVINE
CROWELL & MORING LLP
/s/ Janet I. Levine
Bv: JANET I. LEVINE
Attornev Ior DeIendant
Steve K. Lee
JAN L. HANDZLIK
GREENBERG TRAURIG LLP
/s/ Jan L. HandzIik
Bv: JAN L. HANDZLIK
Attornev Ior DeIendants
Lindsev ManuIacturing Companv and
Keith E. Lindsev
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MEMORANDUM OF POINTS AND AUTHORITIES
I. INTRODUCTION AND SUMMARY OF ARGUMENT
In the First Superseding Indictment (FSI¨), the government charged
Lindsev ManuIacturing Companv (LMC¨), Keith E. Lindsev (Dr. Lindsev¨),
LMC`s President, and Steve K. Lee (Mr. Lee¨), the Companv`s ChieI FinanciaI
OIIicer (herein deIendants¨), with conspiring with Enrique Faustino AguiIar, a
saIes representative (and others unnamed and unidentiIied in the FSI), to vioIate
the Foreign Corrupt Practices Act (FCPA¨) and with certain substantive FCPA
vioIations reIated to saIes oI LMC products to the Mexican Comision FederaI de
EIectricidad (CFE¨). To prove a FCPA vioIation, the government must prove a
pavment to a Ioreign oIIiciaI. This motion raises the simpIe question: Does an
oIIicer or empIovee oI a state owned corporation quaIiIv as a Ioreign oIIiciaI?
The FSI charges that the CFE was an eIectric utiIitv companv owned bv the
government oI Mexico.¨ FSI
1
¹ 3.
2
According to the aIIegations in the FSI,
OIIiciaIs 1 and 2 heId senior IeveI positions at CFE, and this Iact aIone made
|them] Ioreign oIIiciaI|s],` as that term is deIined in the FCPA . . . .¨ Id. ¹¹ 4-5.
The government is wrong to assert, as iI it were settIed Iaw, that a position with a
state owned corporation equates to status as a Ioreign oIIiciaI¨ under the FCPA.
In Iact, this is not a settIed issue, and the better view is that empIovees oI state
owned corporations are not Ioreign oIIiciaIs in the FCPA.
The FCPA deIines Ioreign oIIiciaIs¨ as oIIicer|s] or empIovee|s] oI a
Ioreign government or anv department, agencv, or instrumentaIitv thereoI, or oI a
1
The FSI is attached as an exhibit in other motions IiIed concurrentIv
herewith.
2
In the EngIish Ianguage version oI the CFE website, CFE acknowIedges that
it is a companv created and owned bv the Mexican government.¨
http://www.cIe.gob.mx/Iang/en/Pages/thecompanv.aspx.
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pubIic internationaI organization,¨ or individuaIs who acted in an oIIiciaI capacitv
Ior or on behaII oI anv such government or department, agencv, or instrumentaIitv
. . . .¨ 15 U.S.C. § 78dd-2(h)(2)(A). The Act does not deIine department, agencv
or instrumentaIitv.¨ The government`s theorv is most IikeIv that the CFE, a state
owned corporation, is an instrumentaIitv,¨ given the ordinarv meanings oI
department¨ and agencv.¨
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The government`s theorv has no basis in the text or the historv oI the FCPA,
and is contradicted bv the pIain meaning oI the term instrumentaIitv¨ in the
context oI the Ioreign oIIiciaI deIinition (and the FCPA as a whoIe), the IegisIative
historv oI the statute, and Congress`s purpose in enacting it. And the government`s
theorv, iI accepted, wouId Iead to absurd resuIts.
The proper interpretation oI instrumentaIitv¨ actuaIIv excludes, as a matter
oI Iaw, state owned corporations. And, iI there is anv ambiguitv about the meaning
oI this term, doubt must be resoIved in Iavor oI the deIendant. Under either view,
the Court shouId dismiss the FSI because it hinges on the IIawed IegaI theorv that
CFE empIovees are Ioreign oIIiciaIs. In the aIternative, the Court shouId dismiss
the FSI as it hinges on an unconstitutionaIIv vague statute.
This is a matter oI aImost Iirst impression. SimiIar, but not identicaI, issues
have been raised in two district cases, neither in this circuit.
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Another court in this
3
AIthough the CFE describes itseII as an agencv¨ on its website, it is
nevertheIess a state owned corporation, see. supra. note 1, FSI ¹ 3, and, in anv
case, what CFE caIIs itseII is oI no moment. DeIendants argue in this motion that
the text and IegisIative historv oI the FCPA estabIish that Congress did not intend
to address pavments to state owned corporations with the FCPA (or that, in the
aIternative, the statute is vague on the question). What one oI these entities caIIs
itseII in a particuIar case, and into which prong oI the Ioreign oIIiciaI¨ deIinition
the government cIaims a particuIar corporation IaIIs, is irreIevant to these issues.
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In the Eastern District oI PennsvIvania and the Southern District oI FIorida,
courts denied pretriaI motions to dismiss based on somewhat simiIar arguments
about the Ioreign oIIiciaI¨ eIement. These decisions are obviousIv not binding,
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district wiII consider an argument much Iike that presented here. On Februarv 21,
2011, the deIendants in an FCPA case beIore the HonorabIe James V. SeIna IiIed a
motion simiIar to the present motion. United States v. Carson. et al., No. SA CR
09-00077-JVS (C.D. CaI.), DeIendants` Notice oI Motion and Motion to Dismiss
Counts One through Ten oI the Indictment and Memorandum in Support ThereoI
(Docket No. 304).
5
and thev shouId be given IittIe weight Ior severaI reasons. First, the deIendants in
these cases argued that prooI that a pavment was made to an empIovee oI an
instrumentaIitv¨ required prooI that the government controIIed entitv in question
was whoIIv owned bv the government and perIormed a pureIv pubIic Iunction. an
argument distinct Irom that presented here. See generallv United States v. Nguven.
et al., (hereinaIter Nguven), No. 08-522-TJS (E.D. Pa.), Motion to Dismiss
Superseding Indictment Ior FaiIure to State a CriminaI OIIense and Ior Vagueness
(Motion to Dismiss¨) (Docket No. 110); United States v. Esquenazi. et al.,
(hereinaIter Esquenazi), No. 09-21010-CR-JEM (S.D. FI.), DeIendant JoeI
Esquenazi`s (Corrected and Amended) Motion to Dismiss Indictment Ior FaiIure to
State a CriminaI OIIense and Ior Vagueness (Motion to Dismiss¨) (Docket No.
283). DeIendants` chieI argument in the present motion is distinct. Second, in
neither case did the deIendants oIIer as much detaiI about the IegisIative historv as
LMC, Dr. Lindsev, and Mr. Lee do in the present motion. See generallv Nguven.
Motion to Dismiss (Docket No. 110); Esquinazi. Motion to Dismiss (Docket No.
283). Third, in Esquenazi. the court`s principIe ground Ior denving the motion was
that it perceived the deIendants` arguments to be IactuaI in nature and thus
premature, a criticism not appIicabIe to this motion. Esquenazi, Order Denving
Motion to Dismiss Indictment (Order¨) (Docket No. 309), 2-3 (addressing the
Ioreign oIIiciaI¨ eIement substantiveIv onIv in dicta, having aIreadv ruIed that the
motion was premised on IactuaI arguments and thus premature). The Eastern
District oI PennsvIvania court did not expIain at aII its rationaIe Ior denving the
motion to dismiss in Nguven. Nguven, Order that Motion to Dismiss Superseding
Indictment is Denied (Order¨) (Docket No. 144). FinaIIv, in neither case did the
courts expIain their rationaIe Ior concIusions about the meaning oI the term
Ioreign oIIiciaI.¨ Esquenazi. Order (Docket No. 309), 3; Nguven, Order (Docket
No. 144).
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The deIendants in United States v. Carson submitted with their motion a
decIaration bv MichaeI J. KoehIer, Associate ProIessor oI Business Law at ButIer
Universitv, weII known Ior his schoIarship and pubIic speaking regarding the
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II. ARGUMENT
A. The Court Should Dismiss The FSI Now Because Under No Set Of
Facts Can The Government Establish Every Element Of The
Charges
The Court shouId ruIe on the deIendants` motion beIore triaI because it can
determine |the obiections] without a triaI oI the generaI issue.¨ Fed. R. Crim. P.
12(b)(2). Indeed, the FederaI RuIes state that the Court must decide everv pretriaI
motion beIore triaI unIess it Iinds good cause to deIer a ruIing.¨ Fed. R. Crim. P.
12(d) (emphasis added). The RuIes contempIate that a court can decide a motion
based on IactuaI issues bv requiring, in those cases, that the court state its
essentiaI Iindings on the record.¨ Id. A court mav dismiss charges pretriaI where
triaI wouId be oI no assistance in determining¨ their vaIiditv. United States v.
Covington. 395 U.S. 57, 60 (1969). A pretriaI motion is generaIIv capabIe oI
determination beIore triaI iI it invoIves questions oI Iaw rather than Iact.¨ United
States v. Shortt Accountancv Corp., 785 F.2d 1448, 1452 (9th Cir. 1986) (internaI
citation and quotations omitted). This approach avoids the waste oI iudiciaI
resources¨ that wouId resuIt Irom taking IegaIIv meritIess cases to triaI. United
States v. Flores, 404 F.3d 320, 323, 325 (5th Cir. 2005) (aIIirming district court`s
decision to resoIve beIore triaI whether, given undisputed Iacts, deIendant was
iIIegaIIv or unIawIuIIv in the United States,¨ a prerequisite Ior vioIation oI
statute).
FCPA and Ior his FCPA ProIessor¨ bIog, which is avaiIabIe at
http://IcpaproIessor.bIogspot.com/. The decIaration comprehensiveIv outIines the
IegisIative historv oI the FCPA and incIudes excerpts oI the cited congressionaI
record as exhibits. See United States v. Carson. et al., No. SA CR 09-00077-JVS
(C.D. CaI.), DecIaration oI ProIessor MichaeI J. KoehIer in Support oI DeIendants`
Motion to Dismiss Counts One through Ten oI the Indictment, and Exhibits
Thereto (Docket Nos. 305 & 306) (hereinaIter KoehIer Dec.¨).
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None oI the issues raised bv the instant motion rests on disputed Iacts and
none is dependent on Iurther Iinding oI Iact. DeIendants argue that, no matter
what other characteristics oI CFE the government mav attempt to prove at triaI,
and assuming that aII oI the aIIegations in the FSI are true, as a matter oI Iaw no
state owned corporation is an instrumentaIitv,¨ meaning that no CFE empIovee is
a Ioreign oIIiciaI¨ under the FCPA. II the Court agrees, the Court must Iind that
the government cannot prove the aIIegation that deIendants made pavments to, or
conspired to make pavments to, a Ioreign oIIiciaI¨ and thus cannot prove the
charged vioIation oI the FCPA and conspiracv to vioIate the FCPA (and the
parasitic monev Iaundering charges), no matter what evidence the government
intends to introduce about other characteristics oI the CFE. In the aIternative,
deIendants argue that the term instrumentaIitv¨ is unconstitutionaIIv vague,
another pureIv IegaI issue. See United States v. Panarella, 277 F.3d 678, 685 (3d
Cir. 2002) (stating that the court must dismiss an indictment that aIIeges each
eIement oI an oIIense iI the speciIic Iacts aIIeged . . . IaII bevond the scope oI the
reIevant criminaI statute, as a matter oI statutorv interpretation¨).
B. Employees Of State Owned Enterprises Are Not ~Foreign
Officials¨
1. The Plain Meaning of ~Instrumentality¨ Excludes State
Owned Corporations
It is pIain Irom the deIinition oI Ioreign oIIiciaI¨ that Congress did not
intend Ior FCPA IiabiIitv to be based on pavments made to empIovees oI state
owned corporations Iike CFE. Statutorv anaIvsis begins, oI course, with the the
Ianguage oI the statute. When the pIain meaning oI a statutorv provision is
unambiguous, that meaning is controIIing.¨ Levi Strauss & Co. v. Abercrombie &
Fitch Trading Co., F.3d, 2011 WL 383972, *12 (9th Cir. Feb. 8, 2011)
(internaI citations and quotations omitted).
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In attempting to discern the pIain meaning¨ oI a term that is not deIined,
courts turn Iirst to the term`s ordinarv meaning.¨ United States v. Santos, 553
U.S. 507, 511 (2008). The Ninth Circuit has heId that words are to be iudged bv
their context and that words in a series are to be understood bv neighboring words
in a series,¨ a principIe known as noscitur a sociis. United States v. King, 244 F.3d
736, 740-41 (9th Cir. 2001) (internaI citations and quotations omitted). A
particuIar iteration oI this doctrine is the cannon oI eiusdem generis, which
provides that |w]here generaI words IoIIow speciIic words in a statutorv
enumeration, the generaI words are construed to embrace onIv obiects simiIar in
nature to those obiects enumerated bv the preceding speciIic words.`¨ Circuit Citv
Stores. Inc. v. Adams. 532 U.S. 105, 114-15 (2001) (quoting 2A N. Singer,
Sutherland on Statutes and Statutorv Construction § 47.17 (1991)); United States
v. Brooks, 610 F.3d 1186, 1201 n.6 (9th Cir. 2010) (quoting Circuit Citv Stores,
532 U.S at 114-15). FinaIIv, |t]o determine the pIain meaning oI a statutorv
provision,¨ courts examine not onIv the speciIic provision at issue, but aIso the
structure oI the statute as a whoIe, incIuding its obiect and poIicv.¨ Levi Strauss &
Co., 2011 WL 383972, *12 (internaI citations and quotations omitted); see also
Santos, 553 U.S. at 512 (Since context gives meaning,¨ courts examine terms in
question not in isoIation but as . . . used in the |reIevant] statute.¨).
According to hebsters II New College Dictionarv, the ordinarv meaning oI
instrumentaIitv is the quaIitv or state oI being instrumentaI,¨ which, in turn,
means serving as a means or agencv: impIementaI,¨ or oI, reIating to, or done
with an instrument or tooI.¨ hebsters II New College Dictionarv (hebsters II¨)
589 (3d ed. 2005).
6
In turn, hebsters II deIines to govern¨ as to set Iorth and
6
See also American Heritage Dictionarv 908 (4th ed. 2000) (deIining
instrumentaIitv as |a] means; an agencv,¨ or |a] subsidiarv branch, as oI a
government, bv means oI which Iunctions or poIicies are carried out¨); Blacks
Law Dictionarv 870 (9th ed. 2009) (deIining instrumentaIitv as |a] thing used to
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administer the pubIic poIicv or pubIic aIIairs oI,¨ or to exercise poIiticaI
authoritv.¨ hebsters II at 492-93 (aIso incIuding more generic deIinitions).
7
Thus, the most ordinarv meaning oI an instrumentaIitv oI the government,¨
is an entitv the government uses to accompIish its Iunctions oI setting Iorth and
administering pubIic poIicv or pubIic aIIairs, or exercising poIiticaI authoritv. In
the context oI the Ioreign oIIiciaI deIinition in the FCPA, where the term IoIIows
two other terms with deIinite meaning in the Iaw (and organization oI the U.S.
government), under the doctrines noscitur a sociis and eiusdem generis,
instrumentaIitv¨ must be understood to describe entities simiIar to agencies and
departments or ÷ iI it is meant as a generaI term to capture muItipIe categories oI
government entities ÷ it must be understood to capture onlv entities that share
quaIities both agencies and departments share. See King, 249 F.3d at 740-41;
Circuit Citv Stores. Inc., 532 U.S. at 114-15. Under either interpretation,
instrumentaIities¨ most IikeIv wouId incIude entities Iike government branches,
ministries, bureaus, boards, administrations, commissions, and miIitaries, among
others. Like government departments and agencies, such entities onIv exist in
government, and onIv at the pIeasure oI governments. Thev are Iunded onIv bv
governments. Thev orient to poIicies and/or pubIic poIicv. FinaIIv, the extent oI
their powers are deIined and uniIorm within each state. Corporations, as a
categorv, have no pIace in this group. UnIike agencies and departments,
corporations can take mvriad Iorms and are created and operated in innumerabIe
wavs and Ior inIiniteIv variabIe purposes.
achieve an end or purpose,¨ or |a] means or agencv through which a Iunction oI
another entitv is accompIished, such as a branch oI a governing bodv¨).
7
See also American Heritage Dictionarv at 760 (deIining govern as |t]o
make and administer the pubIic poIicv and aIIairs oI; exercise sovereign authoritv
in,¨ or to exercise poIiticaI authoritv,¨ among other wavs).
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The Iack oI uniIormitv in how state owned corporations are Iormed and
operated contrasts starkIv with the deIined scope oI the terms that precede
instrumentaIitv,¨ and it is impossibIe to identiIv anv characteristic that the Iirst
two categories (departments, agencies) necessariIv have in common with
government/state owned corporations. For these reasons, the doctrines oI noscitur
a sociis and eiusdem generis estabIish that instrumentaIities must mean something
diIIerent than state owned corporations.
8
Moreover, the structure oI the |FCPA] as a whoIe, incIuding its obiect and
poIicv¨ make cIear that Congress did not intend to incIude state owned
corporations when it passed the Act and deIined Ioreign oIIiciaIs.¨ See Levi
Strauss & Co., 2011 WL 383972, *12 (stating that a court must Iook to the
structure oI a statute and its purpose in understanding the pIain meaning oI a term).
First, the statute prohibits corrupt pavments not onIv to oIIiciaIs oI departments,
agencies, or instrumentaIities, but aIso to oIIiciaIs oI pubIic internationaI
organizations,¨ 15 U.S.C. § 78dd-2(a)(1), id. § 78dd-2 (h)(2)(A) (deIining Ioreign
oIIiciaI¨ to incIude pubIic internationaI organization|s]¨), and to anv Ioreign
poIiticaI partv or oIIiciaI thereoI or anv candidate Ior Ioreign poIiticaI oIIice,¨ 15
U.S.C. § 78dd-2(a)(2). PubIic internationaI organizations are organization|s] in
8
A provision in the recent Dodd-Frank WaII Street ReIorm and Consumer
Protection Act iIIustrates the point that, when Iisted immediateIv aIter
department¨ and agencv,¨ instrumentaIitv must encompass onIv entities verv
cIoseIv anaIogous to those entities. The Act requires resource extraction issuers to
discIose certain pavments to Ioreign governments. Pub. L. No. 111-203, 124 Stat.
1376, § 1504 (2010). It provides that Ioreign government¨ incIudes a
department, agencv, or instrumentaIitv oI a Ioreign government, or a companv
owned bv a Ioreign government, as determined bv the Commission.¨ Id.
(emphasis added). The provision iIIustrates the point that the naturaI reading oI
instrumentaIitv¨ when Iisted with department¨ and agencv¨ does not incIude
state owned corporations, and that Congress knows how to address corporations
when it desires to do so.
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which the United States participates pursuant to anv treatv or under the authoritv oI
anv Act oI Congress authorizing such participation or making an appropriation Ior
such participation, and which shaII have been designated bv the President through
appropriate Executive order as being entitIed to eniov the priviIeges, exemptions,
and immunities¨ provided Ior in the PriviIeges and Immunities oI InternationaI
Organizations Act. 22 U.S.C. § 288; see 15 U.S.C. § 78dd-2(h)(2)(B) (deIining
pubIic internationaI organization|s]¨ bv reIerence to Executive orders made
pursuant to section 1 oI the InternationaI Organizations Immunities Act or Ior
purposes oI the FCPA). ExampIes incIude the InternationaI CriminaI PoIice
Organization (InterpoI¨) and the GIobaI Fund To Fight AIDS, TubercuIosis and
MaIaria (GIobaI Fund¨). Exec. Order No. 13,524, 74 Fed. Reg. 67803 (Dec. 16,
2009) (InterpoI); Exec. Order No. 13,395, 71 Fed. Reg. 3203 (Jan. 13, 2006)
(GIobaI Fund). PubIic internationaI organizations, poIiticaI parties, and candidates
÷ Iike agencies and departments ÷ aII bring to mind traditionaI and pureIv
governmentaI roIes or processes in a wav that state owned corporations simpIv do
not.
9
Likewise, the Iact that the FCPA incIudes an exception Ior pavments made to
inIIuence routine governmental action¨ emphasizes how centraI commonIv-
understood concepts oI government and poIitics are to the FCPA. See 15 U.S.C. §
78dd-2(b) (emphasis added).
This is in Iine with the CongressionaI purpose in enacting the FCPA.
Congress`s investigation oI briberv oI Ioreign oIIiciaIs¨ stretched back to at Ieast
1975, two vears beIore Congress passed the FCPA, when the Senate Subcommittee
on MuItinationaI Corporations heId a hearing on the subiect oI poIiticaI
9 Sesame Street characters oIten sing: One oI these things is not Iike the
others; One oI these things iust doesn`t beIong.¨ Joe Raposo and Jon Stone, One
Of These Things (Is Not Like The Others), on The Sesame Street Book & Record
(CoIumbia Records 1970), http://members.tripod.com/tinvdancer/one.htmI. This
song is apt to this argument ÷ state owned corporations are iust not Iike anvthing
eIse encompassed in the FCPA.
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contributions to Ioreign states made bv U.S. corporations. See generallv
Multinational Corporations and United States Foreign Policv. Hearings Before
the Subcomm. on Multinational Corporations of the Comm. on Foreign Relations,
94th Cong. 1-2 (1975) (Statement oI Sen. Church, Chairman oI Subcomm.)
(hereinaIter Multinational Corporations Hrg); KoehIer Dec. ¹ 28. The issue arose
in the wake oI the Watergate investigation which reveaIed that manv American
corporations routineIv made poIiticaI contributions in the United States, and the
Securities and Exchange Commission report to Congress which reveaIed that manv
companies negIected to report to sharehoIders the pavments thev made to Ioreign
governments. Multinational Corporations Hrg at 1-2; KoehIer Dec. ¹ 28. When,
two vears Iater, Congress passed the FCPA, Congress had in mind the impact that
the corruption oI Ioreign oIIiciaIs had on internationaI governmentaI poIitics. That
is, Iawmakers were troubIed that American corporations admitted to briberv oI
Ioreign government oIIiciaIs, poIiticians, and poIiticaI parties¨ not iust because
briberv is inherentIv unIIattering to U.S. companies and unnecessarv, but because
corrupting Ioreign governments caused speciaI harm. H. R. REP. NO. 95-640, at 5
(1977) (describing severe Ioreign poIicv probIems¨ caused bv corporate briberv);
see also S. REP. NO. 95-114, at 3 (1977) (Foreign governments IriendIv to the
United States in Japan, ItaIv, and the NetherIands have come under intense
pressure Irom their own peopIe. The image oI American democracv abroad has
been tarnished.¨).
The exampIes oI embarrassing corruption cited most oIten as Congress
contempIated various biIIs Ieading up to the FCPA were cases in which bribes were
paid to traditionaI government Iigures, nameIv the Prime Minister oI Japan, a
Prince oI the NetherIands (the Queen`s husband, and aIso the Inspector GeneraI oI
the Dutch Armed Forces), and various pureIv governmentaI oIIiciaIs in ItaIv ÷ the
President, the Prime Minister, and deIense ministers among them. See. e.g., H.R.
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REP. NO. 95-640 at 5. Congress couId have criminaIized and thus Iimited aII
briberv abroad. It chose not do so and instead, when it passed the FCPA, had in
mind onIv the reIativeIv narrow ÷ aIbeit serious ÷ probIem oI the impact oI briberv
on governmentaI aIIairs. The Ianguage it chose to address this narrow issue
shouId, accordingIv, be construed narrowIv.
In addition, the Ianguage in a statute enacted before the FCPA demonstrates
that Congress was aware oI the concept oI state owned corporations and was
capabIe oI draIting IegisIation which deIined instrumentaIitv¨ to incIude them; it
chose not to do so with the FCPA. The Foreign Sovereign Immunities Act, Ior
exampIe, which deIines the scope oI Ioreign oIIiciaIs` immunitv Irom enIorcement
oI U.S. Iaw, incIudes as a deIinition oI instrumentaIitv¨ anv entitv . . . which is
an organ oI a Ioreign state or poIiticaI subdivision thereoI, or a maioritv of whose
shares or other ownership interest is owned bv a foreign state or political
subdivision thereof.¨ 28 U.S.C. § 1603(b) (enacted Oct. 21, 1976) (emphasis
added). The Economic Espionage Act, passed aIter the FCPA, demonstrates that
even aIter Congress enacted the FCPA, Congress did not interpret
instrumentaIitv¨ to per se incIude state owned corporations. That Act speciIies
that Ioreign instrumentaIities¨ incIudes, among other things, a . . . corporation.
firm. or other entitv that is substantiallv owned. controlled. sponsored.
commanded. managed. or dominated bv a foreign government¨). 18 U.S.C. § 1839
(enacted Oct. 11, 1996). These statutes Iurther demonstrate that, in the absence oI
evidence to the contrarv, the Court shouId concIude that Congress did not intend to
address such a wide swath oI entities with a singIe term grouped with two other,
more narrow, terms.
FinaIIv, the aIternative interpretation, that state owned corporations are
incIuded among instrumentaIities,¨ wouId Iead to absurd resuIts, an outcome the
Court shouId avoid. See United States v. Granderson, 511 U.S. 39, 47 n.5 (1994)
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(decIining to adopt a deIinition that wouId have Ied to an absurd resuIt¨); Public
Citizen v. Department of Justice, 491 U.S. 440, 454 (1989) (stating that the court
must Iook Ior other evidence oI congressionaI intent to Iend |a] term its proper
scope, |w]here the IiteraI reading oI a statutorv term wouId compeI an odd
resuIt.`¨) (internaI citations omitted). II it were true that state owned corporations
were contempIated bv the FCPA then some U.S. citizens, Iiving and working in the
U.S., but empIoved bv Ioreign state owned corporations, such as CITGO, wouId
quaIiIv as Ioreign oIIiciaIs.¨ SimiIarIv, empIovees oI companies that have been
nationaIized bv their sovereigns the worId over ÷ suddenIv, temporariIv, and onIv
due to crises ÷ such as the RovaI Bank oI ScotIand, the AngIo Irish Bank, and
Northern Rock ÷ wouId wouId quaIiIv as Ioreign oIIiciaIs.¨ Congress couId not
have intended either oI these resuIts, and the Court shouId interpret the FCPA to
avoid them. In Iight oI the pIain meaning oI the term instrumentaIitv,¨ the Court
shouId dismiss the FSI Ior IaiIure to state a criminaI vioIation as a matter oI Iaw.
C. Any Ambiguity In The Term ~Instrumentality¨ Is Erased By The
Legislative History Of The FCPA, And In Any Case, This Court
Should Resolve Any Ambiguity In Favor Of The Defendant
Congress has, on severaI occasions, decIined to bring state owned
corporations into the FCPA`s ambit.
The Ninth Circuit`s weII estabIished¨ ruIes oI statutorv construction
provide that, |i]I ambiguitv exists,¨ the Court mav use IegisIative historv as an
aid to interpretation.¨ Levi Strauss & Co., 2011 WL 383972, at * 12 (internaI
citations and quotations omitted). However, iI in the Court`s view, ambiguitv
persists even aIter the Court has exhausted its tooIs oI statutorv construction, a
Iong Iine oI |Supreme Court] decisions¨ hoIds that the tie must go to the
deIendant.¨ Santos, 553 U.S. at 514. This doctrine cIearIv dictates that the Court
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must dismiss the FSI iI it remains unconvinced about the scope oI
instrumentaIitv¨ in the FCPA.
1. The History of the FCPA Shows that Congress Deliberately
Chose Not to Target Bribes Intended to Influence State
Owned Corporations
Congress has deIiberateIv chosen not to reguIate pavments to state owned
corporations in the FCPA. In the vears Ieading up to 1977, when it passed the
FCPA, both the 94th and the 95th Congresses reiected biIIs that wouId have
expIicitIv addressed pavments to empIovees oI state owned corporations. In 1988,
Congress made amendments that emphasized the Iocus oI the Act was cIassic
governmentaI action.¨ FinaIIv, in 1998, in making some changes to the statute to
conIorm to parts oI the Organization Ior Economic Cooperation and DeveIopment
Convention on Combating Briberv oI Foreign PubIic OIIiciaIs in InternationaI
Business Transactions, Congress chose not to IuIIv incorporate into U.S. Iaw that
Convention`s deIinition oI Ioreign pubIic oIIiciaI,¨ speciIicaIIv bv not
incorporating into the FCPA deIinition oI Ioreign oIIiciaI¨ empIovees oI state
owned enterprises. SigniIicantIv, Congress did incorporate into U.S. Iaw other
eIements oI the Convention`s deIinition oI Ioreign oIIiciaIs.
This historv evinces CongressionaI intent to address onIv a narrow range oI
conduct with the FCPA and, speciIicaIIv, to not address pavments to empIovees oI
state owned corporations. Where reguIatorv or statutorv Ianguage is reiected bv a
promuIgating bodv, its absence provides an indication that the bodv did not wish to
have the issue considered.¨ Edwards v. 360 Commcns, 189 F.R.D. 433, 436 (D.
Nev. 1999) (citing Norman J. Singer, 2A Sutherland Statutorv Construction §
48.04, at 325 (5th ed. 1992)); see Religious Tech. Center v. hollersheim, 796 F.2d
1076, 1085-86 (9th Cir. 1986) (concIuding that RICO does not aIIow private
parties to seek iniunctive reIieI aIter reviewing historv showing that Congress
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considered the idea but reiected biIIs and Iater amendments to the statute that
wouId have provided Ior such remedies).
a. Congress Rejected Bills Explicitly Addressing
Payments to State Owned Corporations When It
Passed the FCPA
The biII now known as the FCPA passed in 1977. Congress enacted this
version aIter considering more than twentv biIIs. The biIIs Congress considered
beIore that diIIered in manv wavs. For exampIe, some proposed onIv to increase
reporting requirements Ior pubIic companies, whiIe others proposed to criminaIize
certain pavments. See generallv KoehIer Dec. at ¹¹ 28-280. The biIIs aIso diIIered
in how thev deIined the categorv oI entities that wouId trigger the Act. See
generallv id. Among these biIIs were severaI that expIicitIv contempIated state
owned corporations.
For instance, on August 6, 1976, Senator Magnuson introduced S. 3741.
The biII wouId have required U.S. corporations or their Ioreign aIIiIiates to report
pavments in connection with oIIiciaI actions oI Ioreign pubIic oIIiciaIs. The biII
deIined Ioreign pubIic oIIiciaIs¨ as, essentiaIIv, oIIicers, empIovees or others
acting on behaII oI a Ioreign government. S. 3741, 94th Cong. § 2(e) (1976). In
turn, the biII deIined Ioreign government¨ to expIicitIv incIude corporations
owned bv Ioreign states:
(1) The government oI a Ioreign countrv, irrespective oI
recognition bv the United States; (2) a department,
agencv, or branch oI a Ioreign government; (3) a
corporation or other legal entitv established or owned
bv. and subiect to control bv. a foreign government; (4) a
poIiticaI subdivision oI a Ioreign government, or a
department agencv, or branch oI the poIiticaI subdivision;
or (5) a pubIic internationaI organization.
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S. 3741, § 2(h) (emphasis added). A House biII mirrored this Senate proposaI. See
H.R. 15149, 94th Cong. §§ 2(e) & (h) (1976). Both biIIs were reIerred to
committee, but no Iurther action was taken on either.
In the 95th Congress, the House again considered, among other biIIs, a biII
that expIicitIv reIerred to government owned corporations. Like its predecessors,
H.R. 7543 Iocused on the reporting oI certain pavments made abroad, as opposed
to prohibiting such pavments. H.R. 7543, 95th Cong. § 401 (1977) (emphasis
added). The biII deIined Ioreign government¨ as:
(A) the government oI a Ioreign countrv, whether or not
recognized bv the United States; (B) a department,
agencv, or branch oI a Ioreign government; (C) a
poIiticaI subdivision oI a Ioreign government, or a
department, agencv, or branch oI such poIiticaI
subdivision; (D) a corporation or other legal entitv
established. owned. or subiect to managerial control bv a
foreign government; or (E) a pubIic internationaI
organization.
H.R. 7543 § 103(3) (emphasis added).
On Januarv 18, 1977, Senator Proxmire introduced the Senate biII that
uItimateIv ÷ in compromise with a paraIIeI biII Irom the House, H.R. 3815 ÷
become the FCPA, S. 305. S. 305, 95th Cong. (1977). The biII generaIIv
prohibited pavments to oIIiciaI|s] oI a Ioreign government or instrumentaIitv¨ but
did not deIine instrumentaIitv.¨ S. 305, § 30A. H.R. 3815 aIso prohibited certain
pavments to Ioreign oIIiciaIs,¨ which it deIined as:
|A]nv oIIicer or empIovee oI a Ioreign government or
anv department, agencv, or instrumentaIitv thereoI, or
anv person acting in an oIIiciaI capacitv Ior or on behaII
oI such government or department, agencv or
instrumentaIitv. Such terms do not incIude anv empIovee
oI a Ioreign government or anv department, agencv, or
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instrumentaIitv thereoI whose duties are ministeriaI or
cIericaI.
H.R. 3815, 95th Cong. § 30A(e)(2) (1977). The Senate agreed during ConIerence
to incIude the House`s deIinition in anv IinaI biII. H.R. REP. NO. 95-831, at 12
(1977) (ConI. Rep.). The conIerence version oI S. 305 and H.R. 3815,
incorporating this deIinition, became The Foreign Corrupt Practices Act. Pub. L.
No. 95-213, 91 Stat. 1494 (1977) (current version at 15 U.S.C. § 78dd-2)); see
KoehIer Dec. ¹¹ 269-78 (describing detaiIs oI the 1977 adoption oI the Act).
As this historv demonstrates, Congress was cognizant oI state owned
corporations as it considered the proper scope Ior what wouId become the FCPA.
WhiIe some Senators and Representatives obviousIv Iavored addressing pavments
meant to inIIuence state owned corporations with the IegisIation, Ianguage which
wouId have cIearIv accompIished that was not incIuded in the IegisIation. This
Court shouId reiect the government`s attempt to expand the Iaw bevond
CongressionaI intent.
b. 1988 Amendments to the FCPA Reflect the Omission
of State Owned Corporations from the Statute`s
Ambit
The historv oI amendments to the FCPA conIirm that Congress did not
intend that it wouId be used to address pavments to state owned corporations.
First, the originaI FCPA indirectIv excused so-caIIed grease¨ or IaciIitation
pavments,¨ which Congress never intended to criminaIize. It did so bv deIining
Ioreign oIIiciaI¨ to exclude anv empIovee oI a Ioreign government or anv
department, agencv or instrumentaIitv whose duties are essentiaIIv ministeriaI or
cIericaI.¨ Foreign Corrupt Practices Act oI 1977, Pub. L. No. 95-213, § 104(d)(2),
91 Stat. 1494 (1977) (amended 1988, 1998). Congress discovered that this
exception was diIIicuIt Ior corporations to understand, however, because it rested
on understanding individuaIs` duties, which varied Irom entitv to entitv and
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countrv to countrv. One speaker, discussing the ministeriaI or cIericaI duties¨
excIusion, noted that:
|i]n practice this approach has IaiIed to achieve
Congress` intent. Even in our own IederaI government, it
is diIIicuIt to know when an oIIiciaI has essentiaIIv
ministeriaI or cIericaI¨ duties. The probIem is acute in
Ioreign countries where duties oI government empIovees
are Iess cIearIv articuIated and usuaIIv are not readiIv
avaiIabIe in pubIished Iorm.
Business Accounting and Foreign Trade Simplification Act. Joint Hearing before
the Subcomm. on Securities and the Subcomm. on International Finance and
Monetarv Policv of the Comm. on Banking. Housing. and Urban Affairs. 97th
Cong. 151 (1981) (Prepared Statement oI Robert L. McNeiII, Executive Vice
Chairman, Emergencv Comm. Ior American Trade).
Congress decided to address this issue bv deIining IaciIitating pavments¨
not in terms oI recipients, as the originaI Act had, but in terms oI the purpose oI
aIIegedIv or potentiaIIv corrupt pavments. Various iterations oI what became the
IinaI amendment iIIustrate this. See. e.g., S. REP. NO. 99-486, at 12 (1986)
(providing section-bv-section¨ anaIvsis oI S. 430, and noting that the biII wouId
remove uncertaintv about the IaciIitating pavments exception bv deIining such
pavments in terms oI their purpose¨) (emphasis added); see generallv KoehIer
Dec. ¹¹ 281-383 (describing ten-vear historv oI attempts to amend the FCPA in
manv respects, incIuding this one). Congress accompIished its goaI bv removing
the excIusion Ianguage Irom the deIinition oI Ioreign oIIiciaI¨ and bv adding an
exception Ior IaciIitating pavments Ior routine government action.¨ SpeciIicaIIv,
Congress inserted the IoIIowing:
|The FCPA`s anti-briberv provisions] shaII not appIv to
anv IaciIitating or expediting pavment to a Ioreign
oIIiciaI, poIiticaI partv, or partv oIIiciaI the purpose oI
which is to expedite or to secure the perIormance oI
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routine governmental action bv a Ioreign oIIiciaI,
poIiticaI partv, or partv oIIiciaI.
Omnibus Trade and Competitiveness Act oI 1988, Pub. L. No. 100-418, § 5003,
102 Stat. 1107 (1988) (amending the Foreign Corrupt Practices Act oI 1977 (Pub.
L. No. 95-123)) (emphasis added).
Congress`s decision to deIine IaciIitating pavments in terms oI whether the
pavor intended to secure cooperation on routine governmental action iIIustrates the
point that is cIear Irom the historv oI the originaI FCPA: When it enacted and
amended the FCPA, Congress did not have in mind government corporations ÷ or
corporate action ÷ it had in mind a discernabIe and deIinite universe oI
governmentaI action.
c. The 1998 Amendments Further Illustrate That
Congress Did Not Consider State Owned
Corporations to be ~Instrumentalities¨
In 1998, Congress again amended the FCPA, this time to impIement
portions oI the Organization Ior Economic Cooperation and DeveIopment
Convention on Combating Briberv oI Foreign PubIic OIIiciaIs in InternationaI
Business Transactions, Dec. 14, 1960, 12 U.S.T. 1728, 888 U.N.T.S. 179
(hereinaIter OECD Convention¨).
10
However, Congress did not change the FCPA
to mirror the OECD Convention exactIv, and its decision to omit one eIement oI
the Convention Irom the U.S. amendment is particuIarIv teIIing.
10
The text oI the OECD Convention and reIated documents, incIuding
Commentaries on the Convention on Combating Briberv oI Foreign PubIic
OIIiciaIs in InternationaI Business Transactions,¨ adopted bv the Negotiating
ConIerence on Nov. 21, 1997 (hereinaIter OECD Convention Commentaries¨),
are avaiIabIe at http://www.oecd.org/dataoecd/4/18/38028044.pdI.
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For purposes oI the OECD Convention, which required, among other things,
that signatories criminaIize pavments to Ioreign pubIic oIIiciaIs,¨ that term was
deIined as IoIIows:
anv person hoIding a IegisIative, administrative or
iudiciaI oIIice oI a Ioreign countrv, whether appointed or
eIected; anv person exercising a pubIic Iunction Ior a
Ioreign countrv, incIuding Ior a pubIic agencv or public
enterprise; and anv oIIiciaI or agent oI a pubIic
internationaI organization.
OECD Convention, art. 1, 4(a) (emphasis added).
11
In 1998, Congress added the
pubIic internationaI organization¨ eIement oI this deIinition to the FCPA
deIinition oI Ioreign oIIiciaI,¨ but did not otherwise amend that deIinition.
InternationaI Anti-Briberv and Fair Competition Act oI 1998, Pub. L. No. 105-366,
§ 3, 112 Stat. 3302 (1998). Congress couId have adopted the extra enterprise¨
eIement oI the OECD deIinition, but chose not to, and the Court shouId not graIt it
onto the statute now.
12
This is vet another cIear sign that Congress did not intend
that individuaIs or corporations wouId be prosecuted Ior pavments to state owned
corporations under the auspices oI the FCPA.
11
Both the text oI this provision and OECD Commentaries estabIish that not
aII state owned corporations satisIv the OECD deIinition oI Ioreign pubIic
oIIiciaI.¨ As the text makes cIear, empIovees oI pubIic enterprises are
contempIated onIv iI thev exercise a pubIic Iunction Ior¨ the Ioreign countrv at
issue. OECD Convention, art. 1, 4(a). Commentarv 15 to the Convention provides
that |a]n oIIiciaI oI a pubIic enterprise shaII be deemed to perIorm a pubIic
Iunction unIess the enterprise operates on a normaI commerciaI basis in the
reIevant market, i.e., on a basis which is substantiaIIv equivaIent to that oI a private
enterprise, without preIerentiaI subsidies or other priviIeges.¨ OECD Convention
Commentaries, supra note 10, Commentarv 15, at 14.
12 Another exampIe oI a point oI departure between the OECD and the FCPA
is that the OECD does not contain an express exception Ior IaciIitation pavments.
See generallv OECD Convention.
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In sum, the IegisIative historv oI the FCPA in pIace at the time reIevant to
this FSI heIps iIIuminate anv ambiguitv in the statute, and makes cIear what the
text oI the statute does as weII. As a matter oI Iaw, thereIore, CFE empIovees
shouId not be heId to be Ioreign oIIiciaIs.¨
2. The Rule of Lenity Requires that the Court Dismiss
Because, at a Minimum, the Government`s Interpretation of
~Instrumentality¨ Is Not Unambiguously Correct
As demonstrated above, instrumentaIitv¨ cannot reasonabIv be interpreted
to incIude state owned corporations, and Congress intended to excIude such
entities Irom the grasp oI the FCPA. However, iI the Court Iinds that there is anv
ambiguitv in the meaning oI Ioreign oIIiciaI,¨ or more speciIicaIIv,
instrumentaIitv,¨ the Court shouId resoIve it in the deIendants` Iavor pursuant to
the ruIe oI Ienitv, and dismiss the FSI. The ruIe oI Ienitv requires ambiguous
criminaI Iaws to be interpreted in Iavor oI the deIendants subiect to them.¨ Santos,
553 U.S. at 514.
This venerabIe ruIe not onIv vindicates the IundamentaI
principIe that no citizen shouId be heId accountabIe Ior a
vioIation oI a statute whose commands are uncertain, or
subiected to punishment that is not cIearIv prescribed. It
aIso pIaces the weight oI inertia upon the partv that can
best induce Congress to speak more cIearIv and keeps
courts Irom making criminaI Iaw in Congress`s stead.
Id. II the government cannot estabIish that its position is unambiguousIv correct¨
bv reIerence to text, structure, and historv,¨ the Court must appIv the ruIe oI
Ienitv and resoIve the ambiguitv in |the deIendant`s] Iavor.¨ Granderson, 511 U.S.
at 54; United States v. Napier, 861 F.2d 547, 548-49 (9th Cir. 1988) (It has Iong
been settIed that . . . one is not to be subiected to a penaItv unIess the words oI the
statute pIainIv impose it,¨ consistent with Santos, supra) (internaI citations and
quotations omitted).
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Pursuant to these principIes and Ior aII oI the reasons given above, the Court
shouId dismiss the FSI.
D. If ~Instrumentalities¨ Does Include State Owned Enterprises, The
Statute Is Unconstitutionally Vague
In the aIternative, iI the Court is unconvinced that the term instrumentaIitv¨
does not, as a matter oI Iaw, excIude state owned corporations, the Court shouId
nevertheIess dismiss the FSI because the statute is unconstitutionaIIv vague on its
Iace, in vioIation oI the FiIth Amendment. SpeciIicaIIv, the phrase
instrumentaIitv¨ encourages arbitrarv and discriminatorv enIorcement.
To satisIv due process, a penaI statute |must] deIine the
criminaI oIIense |1] with suIIicient deIiniteness that
ordinarv peopIe can understand what conduct is
prohibited and |2] in a manner that does not encourage
arbitrarv and discriminatorv enIorcement. The void-Ior-
vagueness doctrine embraces these requirements.
Skilling v. United States, 130 S. Ct. 2896, 2927-28 (2010) (quoting Kolender v.
Lawson, 461 U.S. 352, 357 (1983)). These due process requirements are most
exacting in the context oI criminaI statutes. Forbes v. Napolitano, 236 F.3d 1009,
1011 (9th Cir. 2000).
The FCPA deIinition oI Ioreign oIIiciaI¨ IaiIs this test insoIar as
instrumentaIitv¨ cannot be preciseIv deIined. II instrumentaIitv¨ is not Iimited to
entities cIoseIv anaIogous in genesis and operation to agencies and departments (as
deIendants` argue in Sections II.B & II.C., above), then it is diIIicuIt to imagine
how an ordinarv person can see whether or how it is Iimited at aII. As a
consequence, the statute eIIectiveIv permits the government to deIine, on a case-
bv-case and arbitrarv basis, what instrumentaIitv¨ means. This is the deIinition oI
unconstitutionaI vagueness. Indeed, the government itseII openIv Ieaves
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unanswered the question oI what entities it might Iater consider to be
instrumentaIities¨ Ior FCPA enIorcement purposes.
Where the IegisIature IaiIs to provide such minimaI guideIines, a criminaI
statute mav permit a standardIess sweep |that] aIIows poIicemen, prosecutors, and
iuries to pursue their personaI prediIections.`¨ Kolender, 461 U.S. at 358 (quoting
Smith v. Goguen, 415 U.S. 566, 575 (1974)). Because the text oI the FCPA
permits Iaw enIorcement to determine its sweep, enIorcement oI the statute
vioIates the constitutionaI rights to due process oI LMC, Dr. Lindsev and Mr. Lee.
The Court shouId accordingIv dismiss the FSI.
E. At A Minimum, The Statute Is Vague As Applied To The Conduct
Alleged In The FSI
Where statutes can be reasonabIv construed narrowIv, courts are Ioath to
invaIidate them in their entiretv. Skilling, 130 S. Ct. at 2928. Instead, courts seek
to discern the core oI conduct reguIated bv purportedIv vague portions oI statutes
and, iI thev can discern that core bv reIerence to IegisIative historv and case Iaw
construing the statute, mav uphoId the statute in question rather than invaIidate it
as a whoIe on constitutionaIitv grounds. Id. at 2928-30. Hence, in Skilling v.
United States, the Supreme Court decIined to entireIv invaIidate the honest
services¨ prong oI 18 U.S.C. § 1346, because it concIuded that Congress intended
§ 1346 to reach at least bribes and kickbacks.¨ Id. at 2931 (emphasis in originaI).
However, as the Supreme Court recentIv reiterated, convictions based on
indictments not aIIeging vioIation oI such core conduct are invaIid. See Skilling,
130 S. Ct. at 2934 (vacating conviction Ior conspiracv to commit honest services
Iraud¨ not based on aIIegations oI briberv and kickbacks).
The Court is not presented with such an opportunitv here. In this case,
unIike in Skilling. the IegisIative historv is sparse and no case Iaw in existence at
the time oI deIendants` aIIeged conduct provided anv guidance on the meaning or
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reach oI the term instrumentaIitv.¨ NevertheIess, as discussed above, the pIain
meaning oI the term and its IegisIative historv suggests that, at a minimum, at the
core oI the term are entities verv simiIar to agencies and departments in a wav that
state owned corporations are not ÷ such as branches, ministries, bureaus, and
commissions oI government, and that state owned corporations are outside oI that
core. See supra. Sections II.B & II.C. In Iight oI this, iI the Court disagrees that
the statute is unconstitutionaIIv vague on its Iace because it can discern that
Congress meant to address at Ieast this core with the term instrumentaIitv,¨ it
shouId nevertheIess dismiss the indictment as the statute is vague as appIied to the
conduct aIIeged in the FSI.
///
///
///
///
///
///
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III. CONCLUSION
The FCPA and its historv make cIear that Congress did not intend to
criminaIize pavments to empIovees oI state owned corporations. II Congress
desires to go Iurther, it must speak more cIearIv than it has.¨ Skilling, 130 S.Ct. at
2933 (internaI citation and quotations omitted). The government is not Iree to
expand the reach oI the statute bv Iiat, and the Court must enIorce the Iimits oI the
statute. For the reasons set Iorth herein, this Court shouId concIude that an
empIovee oI a state owned corporation does not quaIiIv as a Ioreign oIIiciaI within
the ambit oI the FCPA or, in the aIternative, that the deIinition oI Ioreign oIIiciaI¨
is unconstitutionaIIv vague. In either case, the Court shouId dismiss the First
Superseding Indictment in its entiretv.
DATED: Februarv 28, 2011 RespectIuIIv submitted,
JANET I. LEVINE
CROWELL & MORING LLP
/s/ Janet I. Levine
Bv: JANET I. LEVINE
Attornev Ior DeIendant
Steve K. Lee
JAN L. HANDZLIK
GREENBERG TRAURIG LLP
/s/ Jan L. HandzIik
Bv: JAN L. HANDZLIK
Attornev Ior DeIendants
Lindsev ManuIacturing Companv and
Keith E. Lindsev
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PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF LOS ANGELES
I am empIoved in the Countv oI Los AngeIes, State oI CaIiIornia, at CroweII
& Moring LLP at 515 S. FIower Street, 40
th
FIoor, Los AngeIes, CaIiIornia 90071.
I am over the age oI 18 and not a partv to the within action.
On February 28, 2011, I served the Ioregoing document described as
DEFENDANTS` NOTICE OF MOTION AND MOTION TO DISMISS THE
FIRST SUPERSEDING INDICTMENT; MEMORANDUM OF POINTS
AND AUTHORITIES; }PROPOSED¡ ORDER (FILED UNDER SEPARATE
COVER) on the parties in this action bv eIectronicaIIv IiIing the Ioregoing with
the CIerk oI the District Court using its ECF Svstem, which eIectronicaIIv notiIies
the IoIIowing:
DougIas M. MiIIer (Assistant United States Attornev)
EmaiI: doug.miIIer:usdoi.gov
NicoIa J. Mrazek (United States Department oI Justice Senior TriaI
Attornev)
EmaiI: nicoIa.mrazek:usdoi.gov
JeIIrev GoIdberg (United States Department oI Justice Senior TriaI Attornev)
EmaiI: ieIIrev.goIdberg2: usdoi.gov
Jan L. HandzIik (Attornev Ior DeIendants Lindsev ManuIacturing Companv
and Keith E. Lindsev)
EmaiI: handzIiki:gtIaw.com
EmaiI: godwint:gtIaw.com
Stephen G. Larson (Attornev Ior DeIendant AngeIa Maria Gomez AguiIar)
EmaiI: sIarson:girardikeese.com
EmaiI: mweber:girardikeese.com
I decIare under penaItv oI periurv under the Iaws oI the State oI CaIiIornia
that the above is true and correct.
Executed on February 28, 2011, at Los AngeIes, CaIiIornia.
/s/Kristen Savage Garcia
KRISTEN SAVAGE GARCIA
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