Ignacio A. Boulin Victoria, Professor of Public Law at Universidad Nacional de Cuyo (Argentina) and co-founder of the human rights group CLADH, contributes the following guest post, proposing a new legal strategy for acquiring information about bribe-taking public officials:
In a recent post, Richard Messick observed–correctly–that although in the last 10-15 years we have seen greater enforcement by so-called “supply-side” countries against bribe-paying firms, “demand-side” governments have not been willing—or able—to go after the bribe-taking public officials. Rick further observes that once a bribe-paying firm has reached a settlement with a supply-side enforcer (say, the U.S. Department of Justice), it should be much easier for the demand-side government to prosecute the corrupt officials on the other side of the transaction. But we see very little of this. Rick attributes the failure to go after the bribe takers to a combination of factors: lack of capacity on the part of demand-side governments, lack of political will, and lack of information about the settlements with supply-side governments.
Those factors are all important, but Rick overlooks one salient fact about these settlements between bribe-paying firms and supply-side governments: often the public settlement documents do not reveal nearly enough information about the bribe transactions to enable the demand-side governments to take action (unless they undertake substantial and costly additional investigation). In the US, for example, the press release announcing the resolution of a Foreign Corrupt Practices Act matter often looks like this: no names regarding who received the money, no precise time concerning when, no specific department within the agency that received the money. Even if the U.S. government has provided more detailed information about the transactions to demand-side governments, the lack of public disclosure means that if the demand-side government takes no action, local activists lack the ability to use “naming and shaming” techniques effectively.
To go after the bribe-takers effectively–and to put pressure on demand-side governments to do so–we need the names, the dates, and the details of the corrupt transactions. How do we get them? I propose a novel (and admittedly aggressive) use of freedom of information laws, like the U.S. Freedom of Information Act (FOIA). Here’s how it would work:
FOIA is intended to secure open government and an informed citizenry by creating a public right to public access to the information held by federal executive branch agencies–including the Department of Justice and the Securities & Exchange Commission, which are responsible for enforcing the FCPA. If the DOJ or SEC have reached a settlement with a firm that violated the FCPA, then it is likely that those agencies possess documents detailing the bribe transactions, even if those documents have not been made public. Thus, in principle, a simple request for the names of foreign public officials that have received a bribe in a resolved FCPA case should be considered information that the U.S. government is obligated to disclose under FOIA.
The most salient objection to this proposal is FOIA’s exemption for “records or information compiled for law enforcement purposes[.]” However, that exemption specifically states that it only applies to the extent that disclosure of law enforcement information
(A) could reasonably be expected to interfere with enforcement proceedings,
(B) would deprive a person of a right to a fair trial or an impartial adjudication,
(C) could reasonably be expected to constitute an unwarranted invasion of personal privacy,
(D) could reasonably be expected to disclose the identity of a confidential source, including a State, local, or foreign agency or authority or any private institution which furnished information on a confidential basis, and, in the case of a record or information compiled by criminal law enforcement authority in the course of a criminal investigation or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source,
(E) would disclose techniques and procedures for law enforcement investigations or prosecutions, or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law, or
(F) could reasonably be expected to endanger the life or physical safety of any individual.
Taking into account that FOIA exemptions are to be “given a narrow compass”, I would argue that none of these conditions applies to a request for information about a foreign official’s involvement in bribery. Subsections (A) would not apply, particularly because U.S. enforcement proceedings would already have concluded, and it’s sensible to read this provision as applying only to U.S. enforcement in any event. Subsections (B) and (F) might apply in extreme cases, so perhaps the U.S. government could refuse to disclose officials implicated in bribery schemes if those officials might subsequently be subjected to unfair proceedings or physical danger, but in most cases this will not be an issue. Subsection (C) would likely not apply, because even though disclosure of participation in a criminal scheme might be an “invasion of privacy,” it is certainly not “unwarranted,” given that the officials involved have committed serious crimes. Subsection (D) would apply only if the corrupt foreign official were the confidential source of the government’s information about the FCPA violation (an exceedingly unlikely occurrence). And subsection (E) seems irrelevant to this sort of request.
So, it seems that there is at least a colorable legal argument that requesting the names of foreign officials, who have not committed any crime under U.S. law, would not interfere with the purpose of the FOIA exemption for law enforcement information. If the request is carefully tailored in order to avoid any link with this exemption, or any other FOIA exemption, there is a good chance it will succeed. Success, of course, is not guaranteed. This aggressive use of FOIA implicates foreign relations, which is one of those subject areas in which judges accord significant deference to the executive branch. However, if it works, it would substantially improve the prospects for prosecuting bribe-taking public officials in many countries.
GAB | The Global Anticorruption Blog 
Thanks for your post, Ignacio. I think that this is a plausible idea. I agree that FOIA exemptions are to be construed narrowly, so you’re on the right side of the presumptions here, I think.
At the same time, I see a couple of potential issues (some of which I am, admittedly, not entirely sure about; someone who is an expert on admin law might correct me here).
First, a significant number of FCPA actions are resolved by deferred prosecution agreements (DPAs). In such cases, enforcement proceedings may be delayed, while defendants and the government generally stipulate to the facts associated with the issue. A plausible argument could be made out, under 5 U.S.C. 552(b)(7)(A), that revealing further information, beyond what was stipulated to in the DPA, could interfere with the agreement made with the defendant, or otherwise prejudice any attempts to subsequently enforce the DPA.
Second, I imagine it’s possible that this could cause significant controversy in foreign countries. If so, and this was deemed to pose a threat to foreign relations, it would be possible for the executive to classify them, per 5 U.S.C. 552(b)(1). This is probably not a serious threat, though, as I imagine it would be pretty hard for the administration to explain away.
Third, are there potential problems with standing here? I know that the FOIA is generally open to “any person,” but I am wondering if that extends to foreign governments. I don’t remember ever learning about that issue one way or the other, so this might be a complete red herring.
Hi Phil,
Thanks for your comment and sorry for the delay. Exams have been terrible:). Regarding your first point, I think US based corporations agreement with the US government includes a provision not to disclose the name of their employees, but they usually don’t include the name of the foreign government employees who have received illegal money.
As to the controversy in foreign countries, on the one hand it might create some noise. On the other, I believe it would be pretty embarrassing for a foreign government to publicly push against the disclosure of the information of its own corrupt officials.
Regarding standing, I am not saying that a government should request the info. Instead, it should be a private party such as a journalist or a non profit organization.
Thanks for your comment!
I agree with Phil that this is an interesting and plausible plan, although I also have some questions. Specifically, I wonder how much the work product privilege incorporated into FOIA’s exemption #5 might come into play in many cases. Most records associated with a prosecution would seem to fall under such a privilege, meaning that a requester might have trouble getting anything but the final agreement approved by a final decisionmaker. I’ve found one or two cases on WestLaw suggesting that in domestic criminal prosecutions, most of the prosecutors’ files are protected under the FOIA privileges exception. And if the courts decided to treat “deferred” prosecution agreements as truly deferred and not final, even those documents could be protected by privilege under exemption #5 (in addition to the exemption #7(a) concerns Phil raises above).
Do you know what the final agreement paperwork you’d actually be requesting would look like? That seems like the best shot for getting documentation that wouldn’t run into work product privilege, and yet would have information useful to a prosecution.
Two other thoughts: First, I would look for what law has developed, if any, on the FOIA-bility of plea bargain agreements and other instruments that might be analogized to deferred prosecution agreements or final admissions of guilt. I’ve found at least one case suggesting that many plea bargaining agreements contain admissions of information that might be used in other prosecutions, making them protected under the law enforcement exception to FOIA (again — similar to Phil’s 7(a) concern). And second, I would think about what tools agencies and companies might have for self-insulation: for example, if only the final agreements could be FOIA’d, that might change the incentives for what information would be admitted in them versus left out of the final decision.
HI, and sorry for the delay.
A final agreement looks like this. http://www.sec.gov/news/press/2013/2013-65-npa.pdf . Look at page 8, for example, where the corporation recognizes that it has provided illegal gifts to three specific officials. We just need the names!
There is one fundamental issue here. When FOIA refers to prosecutions, it is concerned with US law enforcement procedures. But in what I am proposing, FOIA would be used just to get the names of foreign officials, who cannot be prosecuted in the US.
Thanks for your thoughts!
Thank you for a thought provoking entry Ignacio. To begin with I realise your post is rather specific to the enforcement on the demand side under the FCPA, however, I feel some thoughts on the Australian situation may be of interest.
By way of background, Australia has ratified the OECD bribery convention, although investigations are somewhat thin on the ground, however, several large firms have been in the spotlight in recent years – outcomes are pending. We also have an FOI Act with similar release exemptions related to law enforcement. From a practitioner’s perspective (not a lawyer, mind you) the discussion above appears to apply equally in Australia.
Australia’s FOI Act has a specific exemption from release on the grounds they “would, or could reasonably be expected to, cause damage to:
(i) the security of the Commonwealth;
(ii) the defence of the Commonwealth; or
(iii) the international relations of the Commonwealth; or
(b) would divulge any information or matter communicated in confidence by or on behalf of a foreign government, an authority of a foreign government or an international organization to the Government of the Commonwealth, to an authority of the Commonwealth or to a person receiving the communication on behalf of the Commonwealth or of an authority of the Commonwealth”
Without having read the US FOIA, I rather suspect similar exemptions would be in place.
From my experience with international law enforcement, complex transnational investigations often involve the confidential cooperation of foreign governments. Even though these governments are often victims of the corrupting nature of outside business (i.e. Australian, US or others), they may not be willing to air their dirty laundry. Alternately, future cooperation may hinge on a principled stance of non-disclosure of investigation details under any circumstances. In essence, even though one arm of a foreign government wishes the information to be released, the cooperating investigative agency may not see such a wish in the same light. In either circumstance, express or implied unwillingness to approve the release of information presents another barrier.
This said, I still see value in trying to use FOI to identify bribe recipients. While there will be some rejections, I expect there will also be some successes which can then be built upon.
Ignacio,
Thanks for taking the thinking in my earlier post forward. Using the U.S. Freedom of Information Act to pry more information on briber takers out of the American government merits exploration.
At the same time, don’t forget that non-American law enforcement agencies often have the right to seek information about the identity of those taking bribes directly from the bribe payers. Below are excerpts from the documents in the public record on the settlements the U.S. Department of Justice reached with Daimler and Siemens to resolve their FCPA cases —
“At the request of the Department, and consistent with applicable law and regulation, Daimler shall also cooperate fully with such other domestic or foreign law enforcement authorities and agencies, as well as the Multilateral Development Banks (“MDBs”), in any investigation of Daimler, or any of its present and former directors, employees, agents, consultants, contractors, subcontractors, and subsidiaries, or any other party, in any and all matters relating to corrupt payments and related false books and records and internal controls, and in such manner as the parties may agree.” Deferred Prosecution Agreement, United States v. Daimler AG, D.C.D.C., No. 1:10-cr-00063, March 22, 2010 at 3.
“. . .a continuing obligation to provide full, complete, and truthful cooperation to the Department and any other law enforcement agency, domestic or foreign, with which the Department directs Siemens to cooperate. . . .” Department’s Sentencing Memo, United States v. Siemens Aktiengesellscheft, No. 1:08-cr-00367, December 12, 2008, at 10.
If I were a member of civil society, worked for the media, or were a part of the political opposition in any of the countries where either company had admitted paying a bribe, I would be asking the enforcement agency in my country if it had made any contact with ether company and what the result was.
Large law firms write annual or semi-annual tomes analyzing the settlement agreements in FCPA cases. But the ones I have read don’t mention what obligation the settling defendant or defendants are under to cooperate with non-U.S. authorities,. I know of at least one, involving BAE, where no cooperation was required. Why? Are there others? Are the cooperation terms boilerplate or negotiated? What considerations go into the negotiations?
This might this be fruitful area of inquiry for a law student group interested in international affairs? (Yes, I am dropping a hint. I hope it was loud enough.)
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