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Keywords

defendantliabilitystatutemotioncorporationmotion to dismiss

defendantliabilitymotionwillcorporationmotion to dismiss

Related Cases

U.S. v. Aguilar

Facts

The Government filed a First Superseding Indictment against the Lindsey Defendants, alleging that they conspired to violate the FCPA by paying bribes to employees of the Comisi�Federal de Electricidad (CFE), a Mexican electric utility company wholly owned by the government. The indictment claimed that the Lindsey Defendants funneled bribes through Grupo International, a company controlled by the Aguilar Defendants, under the guise of commissions for services. The FSI detailed the roles of the defendants and the nature of the alleged bribes.

The gist of the allegations in the FSI is that the Lindsey Defendants paid bribes to two high-ranking employees of the Comisi�Federal de Electricidad ('CFE'), an electric utility company wholly-owned by the Mexican government. Lindsey Manufacturing Company ('LMC') funneled the alleged bribes to these employees (Nestor Moreno and Arturo Hernandez) by making payments to Grupo International ('Grupo'), a company owned and controlled by the Aguilar Defendants.

Issue

Whether an officer or employee of a state-owned corporation can be considered a 'foreign official' for purposes of FCPA liability.

The question presented by the motion is whether an officer or employee of a state-owned corporation can be a 'foreign official' for purposes of FCPA liability.

Rule

The FCPA defines a 'foreign official' as any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization.

The FCPA defines a 'foreign official' as 'any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency or instrumentality, or for or on behalf of any such public international organization.'

Analysis

The court analyzed the characteristics of the Comisi�Federal de Electricidad (CFE) and determined that it could be classified as an instrumentality of the Mexican government. The court noted that CFE was created by statute, operated under governmental oversight, and performed a function recognized as a government responsibility. Therefore, the employees of CFE could be considered foreign officials under the FCPA.

The court will adopt the very definition that Defendants themselves proffer. Having asserted that it is plain that 'instrumentality' cannot and does not encompass a state-owned corporation, here is how they define 'instrumentality': '[T]he ordinary meaning of instrumentality is 'the quality or state of being instrumental,' which, [**14] in turn, means 'serving as a means or agency: implemental,' or 'of, relating to, or done with an instrument or tool.'

Conclusion

The court denied the motion to dismiss, concluding that the allegations against the defendants could proceed because the employees of the state-owned corporation could be classified as foreign officials under the FCPA.

The Court DENIES the motion to dismiss, because a state-owned corporation having the attributes of CFE may be an 'instrumentality' of a foreign government within the meaning of the FCPA, and officers of such a state-owned corporation, as Messrs. Nestor Moreno and Arturo Hernandez are alleged to be, may therefore be 'foreign officials' within the meaning of the FCPA.

Who won?

The Government prevailed in this case as the court denied the defendants' motion to dismiss the charges, allowing the case to proceed based on the interpretation of the FCPA.

The Government claims these alleged bribes violated the FCPA.

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