Kay v. United States - Opposition

No. 07-1281

In the Supreme Court of the United States

DAVID KAY AND DOUGLAS MURPHY, PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

GREGORY G. GARRE
Acting Solicitor General
Counsel of Record
MATTHEW W. FRIEDRICH
Acting Assistant Attorney
General
JOSEPH C. WYDERKO
Attorney
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTIONS PRESENTED

1. Whether the indictment-which petitioners did not challenge until after they were convicted at trial- adequately alleged that petitioners acted "willfully" in violating the Foreign Corrupt Practices Act of 1977 (FCPA), 15 U.S.C. 78dd-1 et seq.

2. Whether the court of appeals, after concluding that the legislative history of the FCPA demonstrated Congress's intent to prohibit the type of bribes paid by petitioners, properly declined to apply the rule of lenity in construing the statute.

In the Supreme Court of the United States

No. 07-1281

DAVID KAY AND DOUGLAS MURPHY, PETITIONERS

v.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinions of the court of appeals (Pet. App. 1a- 52a, 53a-108a) are reported at 513 F.3d 432 and 359 F.3d 738, respectively. The opinion of the district court (Pet. App. 109a-121a) is reported at 200 F. Supp. 2d 681.

JURISDICTION

The judgment of the court of appeals was entered on October 24, 2007. A petition for rehearing was denied on January 10, 2008 (Pet. App. 122a-130a). The petition for a writ of certiorari was filed on April 9, 2007. The juris diction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Following a jury trial in the United States District Court for the Southern District of Texas, petitioners were each convicted on 12 counts of paying bribes to foreign officials, in violation of the Foreign Corrupt Practices Act of 1977 (FCPA), 15 U.S.C. 78dd-1(a) and 78dd-2(a); and one count of conspiring to do so, in viola tion of 18 U.S.C. 371. Murphy was also convicted of ob structing a proceeding before the Securities and Ex change Commission (SEC), in violation of 18 U.S.C. 1505. Kay was sentenced to 37 months of imprisonment, to be followed by two years of supervised release. Pet. App. 131a-148a. Murphy was sentenced to 63 months of imprisonment, to be followed by three years of super vised release. Id. at 149a-165a.

1. Petitioners were officers of American Rice, Inc. (ARI), a publicly-traded company based in Houston that processes and sells rice throughout the world. Murphy was the president and chief executive officer, and Kay was a vice president who reported directly to Murphy. Pet. App. 2a; Gov't C.A. Br. 4.

In the 1990s, ARI opened a rice processing plant in Haiti, and it formed the Rice Corporation of Haiti (RCH) to operate the plant. ARI shipped rice in bulk from Texas to Haiti, where the rice was processed and bagged for distribution. The Republic of Haiti required rice importers to pay substantial customs duties and taxes on their rice shipments and sales. Pet. App. 2a; Gov't C.A. Br. 4-6. Petitioners became concerned that the required payments put ARI at a competitive disad vantage relative to smugglers who evaded the payments and competitors who bribed customs officials to accept reduced payments. Gov't C.A. Br. 7-9; see Pet. App. 8a & n.14.

In January 1998, petitioners decided to reduce ARI's payments by under-invoicing the amount of rice in their shipments and bribing Haitian customs officials to ac cept the false documents. They directed ARI employees to prepare two sets of documents for each shipment: one for internal use that accurately reflected the amount of rice, and another for presentation to customs officials that under-declared the amount by up to 50%. Petition ers authorized RCH employees to pay bribes to the cus toms officials to accept the false invoices. Gov't C.A. Br. 9-11. Between January 1998 and August 1999, petition ers authorized the use of false documents and the pay ment of bribes in connection with 12 shipments of rice. For those shipments, ARI under-declared 29,987 metric tons of rice valued at over $7.7 million, resulting in a total gross savings of over $1.5 million and a total net savings (after the payment of the bribes) of over $1 mil lion. Id. at 11-12.

In October 1999, Murphy was fired by ARI. In 2001, he testified under oath in connection with an investiga tion by the SEC. During his testimony, Murphy lied about his knowledge of the false shipping documents and his involvement in the bribes paid to Haitian officials. Gov't C.A. Br. 13-14.

2. A grand jury in the Southern District of Texas returned an indictment charging petitioners with 12 counts of violating the FCPA, which prohibits publicly traded companies and their officers from making "use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of" a bribe to a for eign official for purposes of influencing the official's ac tions "in order to assist [the company] in obtaining or retaining business for or with * * * any person." 15 U.S.C. 78dd-1(a)(1). Pet. App. 110a. Under 15 U.S.C. 78ff(c)(2)(A), an officer who "willfully" violates the FCPA is subject to criminal penalties.1

Petitioners moved to dismiss the indictment. They argued that the payment of bribes to foreign officials to reduce customs duties and taxes did not satisfy the so-called "business nexus" element of the FCPA, i.e., that the bribes "assist * * * in obtaining or retaining busi ness." 15 U.S.C. 78dd-1(a). Petitioners claimed that the business nexus element limited the scope of the FCPA to bribes paid to secure new business or to retain exist ing business. Pet. App. 113a. The district court agreed and dismissed the indictment. Id. at 109a-121a.

3. The court of appeals reversed. Pet. App. 53a- 108a. It concluded that "bribes paid to foreign officials in consideration for unlawful evasion of customs duties and sales taxes could fall within the purview of the FCPA's proscription" when "the bribery was intended to produce an effect-here, tax savings-that would 'as sist in obtaining or retaining business.'" Id. at 89a-90a.

The court of appeals agreed with the district court that the "obtain[] or retain[] business" language was am biguous. Pet. App. 62a, 67a. But after examining legis lative history, id. at 67a-87a, the court concluded that Congress did not intend "to limit the FCPA's applicabil ity to cover only bribes that lead directly to the award or renewal of contracts," id. at 88a.

When the FCPA was enacted in 1977, the court of appeals noted, the initial House bill contained no limit ing "business nexus" element, but Congress adopted the Senate's proposal to include such an element. Pet. App. 68a-70a. That proposal was based on an SEC Report that had identified four types of illegal payments, includ ing payments "made with the intent to assist the com pany in obtaining or retaining government contracts." Id. at 71a (internal quotation marks omitted). The court concluded "that, in using the word 'business' when it easily could have used the phraseology of [the] SEC Re port, Congress intended for the statute to apply to bribes beyond the narrow band of payments sufficient only to 'obtain or retain government contracts.'" Id. at 73a.

The court of appeals found additional support for its conclusion in the 1988 amendments to the FCPA, which added an explicit statutory exception for payments "to expedite or to secure the performance of a routine gov ernmental action," 15 U.S.C. 78dd-1(b), as well as an affirmative defense for payments that were legal in the country in which they were offered or that constituted bona fide expenditures directly related to the promotion of products or services or the execution or performance of a contract, see 15 U.S.C. 78dd-1(c). Those amend ments, the court reasoned, "illustrate[d] an intention by Congress to identify very limited exceptions to the kinds of bribes to which the FCPA does not apply." Pet. App. 77a. In addition, the court noted that, in rejecting a pro posed amendment to the language of the business nexus element, the Conference Committee stated that the stat ute was "not limited to the renewal of contracts or other business, but also include[d] a prohibition against cor rupt payments related to the execution or performance of contracts or the carrying out of existing business, such as a payment to a foreign official for the purpose of obtaining more favorable tax treatment." Id. at 79a (quoting H.R. Conf. Rep. No. 576, 100th Cong., 2d Sess. 918 (1988)).

4. On remand, the grand jury returned a second su perseding indictment. With respect to the 12 counts charging both petitioners with violating the FCPA, the indictment added allegations that petitioners "believed that if American Rice Inc. and Rice Corporation of Haiti were required to pay the full amount of duties and taxes that should have been paid on the imported rice they would not have been able to sell the rice at a competitive price, would have lost sales to competitors, and would not have realized an operating profit, thus putting at risk American Rice Inc.'s and Rice Corporation of Haiti's business operations in Haiti." C.A. R.E. Tab 3, at 3. The indictment also added a count charging both petitioners with conspiring to violate the FCPA and a count charging petitioner Murphy with obstructing jus tice by making false statements in his testimony in the SEC proceeding. Id. at 7-14.

After a trial, a jury found both petitioners guilty on all counts. More than five months later, petitioners moved to dismiss the FCPA counts, arguing, for the first time, that the indictment failed to allege that petitioners acted "willfully." The district court denied the motion, C.A. R.E. Tab 11, and proceeded to impose sentence, Pet. App. 131a-148a, 149a-165a.

5. The court of appeals affirmed. Pet. App. 1a-52a. The court rejected petitioners' claim that the FCPA failed to give fair notice that their conduct was illegal. Id. at 5a-18a. The court held that the business nexus element of the statute was not vague, explaining that "[i]mprecise general language in one of seven require ments for a bribery conviction under the FCPA does not draw a line so vague that [petitioners] were not reason ably aware of their potential for engaging in illegal ac tivity under the FCPA when they made payments to Haitian officials to reduce tax and duty burdens through misrepresentations." Id. at 7a-8a. And the court con cluded that the FCPA was not sufficiently ambiguous to merit application of the rule of lenity. Id. at 15a-18a. It observed that the rule of lenity "only applies in situa tions of ambiguity more extreme than here, where, 'after seizing everything from which aid can be derived, [a court] can make no more than a guess as to what Con gress intended.'" Id. at 15a-16a (brackets in original) (quoting Reno v. Koray, 515 U.S. 50, 65 (1995)). In the case of the FCPA, the court concluded, the legislative history resolved any textual ambiguity because it "show[ed] that Congress meant to prohibit a range of payments wider than those that directly influence the acquisition or retention of government contracts or simi lar commercial or industrial arrangements." Id. at 17a- 18a (internal quotation marks omitted).

The court of appeals also held that the indictment sufficiently alleged the "willfully" element of a criminal FCPA violation. Pet. App. 29a-31a. The court noted that the indictment "omitted the term 'willful,'" but con cluded that "this omission was harmless error at most, as the language of the indictment described the exact type of conduct required for a finding of willfulness." Id. at 30a. The court observed that "criminal willfulness requires only that criminal defendants have knowledge that they are acting unlawfully or 'knowledge of the facts that constitute the offense,' depending on the defi nition followed." Ibid. (quoting Bryan v. United States, 524 U.S. 184, 193 (1998)). Referring to its earlier discus sion of the jury instructions-which, the court of appeals had held, properly required the jury to find willfulness in the sense that "a defendant knew that he was doing something generally 'unlawful' at the time of his action, id. at 27a-the court concluded that the "corruptly" lan guage in the indictment "sufficiently charge[d] an inten tional act." Id. at 30a (internal quotation marks omit ted). The court also noted that other language in the indictment "sufficiently alleged the element of willful ness by using language that directly asserted [petition er's] knowing commission of acts that are unlawful gen erally and unlawful under the FCPA." Id. at 31a.

ARGUMENT

Petitioners contend (Pet. 11-17) that the failure of the indictment to include an element of the offense can never be harmless error. Although that issue has di vided the courts of appeals and warrants this Court's review in an appropriate case, this case does not prop erly present that issue because petitioners failed to chal lenge the indictment until after they were found guilty at trial. Petitioners also argue (Pet. 17-30) that the rule of lenity precludes the application of the FCPA to their conduct. The court of appeals correctly stated the rule of lenity and determined that its application in this case was unwarranted. The court's interpretation of the FCPA does not conflict with any decision of this Court or any other court of appeals. Further review is not warranted.

1. Petitioners suggest (Pet. 11-17) that this Court should grant review to decide whether the omission of an element of an offense from an indictment can consti tute harmless error. As petitioners note (Pet. 11-12), this Court recently granted review to decide that ques tion, but it ultimately resolved the case by finding that the indictment contained all of the elements of the of fense and thus presented no harmless-error issue. See United States v. Resendez-Ponce, 549 U.S. 102 (2007). The pre-Resendez-Ponce split continues to exist. The majority of the courts of appeals have held that such an omission (or the omission of a sentence-enhancing fact) is subject to harmless-error analysis. See United States v. Allen, 406 F.3d 940, 943-945 (8th Cir. 2005) (en banc), cert. denied, 127 S. Ct. 826 (2006); United States v. Rob inson, 367 F.3d 278, 285-286 (5th Cir.), cert. denied, 543 U.S. 1005 (2004); United States v. Higgs, 353 F.3d 281, 304-307 (4th Cir. 2003); United States v. Trennell, 290 F.3d 881, 889-890 (7th Cir.), cert. denied, 537 U.S. 1014 (2002); United States v. Cor-Bon Custom Bullet Co., 287 F.3d 576, 580-581 (6th Cir.), cert. denied, 537 U.S. 880 (2002); United States v. Prentiss, 256 F.3d 971, 981-985 (10th Cir. 2001) (en banc); United States v. Corporan- Cuevas, 244 F.3d 199, 202 (1st Cir.), cert. denied, 534 U.S. 880 (2001). The Third and Ninth Circuits, on the other hand, have held that such omissions constitute structural error and require reversal. See United States v. Spinner, 180 F.3d 514, 515-516 (3d Cir. 1999); United States v. Du Bo, 186 F.3d 1177, 1179-1181 (9th Cir. 1999).

Contrary to petitioners' contention (Pet. 12-13), how ever, this case is not a suitable, much less an "ideal," vehicle for resolving the question. Petitioners argue (Pet. 12) that the FCPA counts of the indictment were deficient because they failed to allege that petitioners acted "willfully." But unlike the defendant in Resendiz- Ponce, see U.S. Br. at 3, Resendiz-Ponce, supra (No. 05- 998), petitioners did not challenge the sufficiency of the indictment until several months after the jury returned its verdicts. The consequence of petitioners' failure to raise their challenge before trial is that the indictment must be read liberally in favor of its sufficiency, and, under that standard, the indictment is sufficient to with stand petitioners' challenge. Thus, this case, like Resen dez-Ponce, is not an appropriate vehicle for resolution of the harmless-error issue.

The courts of appeals agree that "[t]he scrutiny given to an indictment depends, in part, on the timing of a de fendant's objection to that indictment," and an indict ment challenged after the completion of the govern ment's case should be construed "in a liberal manner" in favor of sufficiency. United States v. Sabbeth, 262 F.3d 207, 218 (2d Cir. 2001). Thus, "[w]here a defendant first challenges 'the absence of an element of the offense' after a jury verdict," the indictment is "sufficient unless it is so defective that by any reasonable construction, it fails to charge the offense for which the defendant is convicted." United States v. Avery, 295 F.3d 1158, 1174 (10th Cir.), cert. denied, 537 U.S. 1024 (2002). See United States v. Gibson, 409 F.3d 325, 331 (6th Cir. 2005); United States v. White, 241 F.3d 1015, 1021 (8th Cir. 2001); United States v. Childress, 58 F.3d 693, 720 (D.C. Cir. 1995), cert. denied, 516 U.S. 1098 (1996); United States v. Vogt, 910 F.2d 1184, 1201 (4th Cir. 1990), cert. denied, 498 U.S. 1083 (1991); United States v. Watkins, 709 F.2d 475, 478 (7th Cir. 1983); United States v. Previte, 648 F.2d 73, 80 (1st Cir. 1981).

The decision below is fully consistent with that set tled rule. As the court of appeals explained, the omis sion of the term "willfully" in the FCPA counts of the indictment was "harmless error at most, as the language of the indictment described the exact type of conduct required for a finding of willfulness." Pet. App. 30a. The court observed that although the indictment did not use the word "willfully," its factual allegations described quintessentially dishonest conduct, i.e., that petitioners created false shipping documents and bribed Haitian officials to accept them, thereby cheating the Haitian government out of customs duties and sales taxes. Id. at 30a-31a. That is not the type of conduct that an ordinary person believes is lawful. Coupled with the indictment's additional allegation that petitioners acted "corruptly," the facts alleged in the indictment sufficiently charged the willfulness element of an FCPA violation under the liberal standard that applies to a post-trial challenge to the sufficiency of an indictment.2

Contrary to petitioners' contention (Pet. 12-13), the result in this case would not have been different had the case arisen in the Ninth Circuit. Although the Ninth Circuit held in Du Bo that "failure to recite an essential element of the charged offense is not a minor or techni cal flaw subject to harmless error analysis," 186 F.3d at 1179, the court expressly noted that its holding was "limited to cases where a defendant's challenge is time ly," id. at 1180 n.3. The court acknowledged that "[u]n timely challenges to the sufficiency of an indictment are reviewed under a more liberal standard." Ibid.; see United States v. James, 980 F.2d 1314, 1317 (9th Cir. 1992) ("When the sufficiency of the indictment is chal lenged after trial, it is only required that 'the necessary facts appear in any form or by fair construction can be found within the terms of the indictment.'"), cert. de nied, 510 U.S. 838 (1993); United States v. Coleman, 656 F.2d 509, 510 (9th Cir. 1981) ("[W]e believe the indict ment must be liberally construed because [the defen dant] failed to raise any objection to it until after trial.").

Nor would the result have been different had this case arisen in the Third Circuit. Although that court has stated that the "[f]ailure of an indictment sufficiently to state an offense is a fundamental defect . . . and it can be raised at any time," Spinner, 180 F.3d at 516 (brack ets in original) (quoting United States v. Wander, 601 F.2d 1251, 1259 (3d Cir. 1979)), it has also recognized that "indictments which are tardily challenged are liber ally constructed in favor of validity," Wander, 601 F.2d at 1259 (quoting United States v. Pheaster, 544 F.2d 353, 361 (9th Cir. 1976), cert. denied, 429 U.S. 1099 (1977)). See United States v. Vitillo, 490 F.3d 314, 324 (3d Cir. 2007).

Because the indictment sufficiently alleged the will fulness element of an FCPA violation under the liberal- construction standard that governs a post-trial chal lenge to the sufficiency of an indictment, the question whether the omission of an element of an offense from an indictment can constitute harmless error is not pre sented in this case. Petitioners' claim therefore does not warrant this Court's review.

2. Petitioners also argue (Pet. 17-34) that the court of appeals erred in holding that the business nexus ele ment of the FCPA is not limited to bribes paid to foreign officials to acquire or retain contracts but also reaches bribes paid to secure reduced customs duties and taxes when the resulting savings benefit the company's exist ing business. The court below is the first court of ap peals to consider the interpretation of the business nexus element, and petitioners do not suggest that its decision conflicts with any decision of any other court or appeals. Instead, petitioners object that the court of appeals did not properly apply the rule of lenity. That claim lacks merit. More to the point, in the absence of any conflict in the construction of a particular statute, the alleged misapplication of a properly stated principle of statutory interpretation does not warrant this Court's review.

According to petitioners, the rule of lenity applies because the business nexus element is ambiguous. Peti tioners are incorrect, because the plain language of the business nexus element, when read in the context of the entire statute, is not ambiguous. The business nexus element requires that a bribe to a foreign official be made "in order to assist [the company] in obtaining or retaining business for or with * * * any person." 15 U.S.C. 78dd-1(a)(1). The word "business" is ordinarily understood to mean a "commercial or mercantile activity customarily engaged in as a means of livelihood." Web ster's Third New International Dictionary of the Eng lish Language 302 (1993). Thus, the statutory language does not restrict the FCPA's coverage to the award or renewal of contracts, but more broadly reaches actions that assist in obtaining or retaining business. Moreover, the FCPA carves out an exception from its prohibition for payments for "routine governmental action." 15 U.S.C. 78dd-1(b); see also 15 U.S.C. 78dd-1(f)(3) (defin ing "routine governmental action"). That exception would be superfluous if the statute were limited in the manner that petitioners propose. Because the plain lan guage of the FCPA covers petitioners' conduct, the rule of lenity has no application here.

To the extent that the statutory text might be said to be ambiguous (see Pet. App. 6a, 12a), any ambiguity can be resolved by the evolution and legislative context of the law. As this Court has made clear, the rule of lenity applies only in "situations in which a reasonable doubt persists about a statute's intended scope even after re sort to 'the language and structure, legislative history, and motivating policies' of the statute." Moskal v. United States, 498 U.S. 103, 108 (1990) (quoting Bifulco v. United States, 447 U.S. 381, 387 (1980)); see United States v. Granderson, 511 U.S. 39, 54 (1994); United States v. R.L.C., 503 U.S. 291, 305-306 (1992) (plurality opinion). And, as the court of appeals noted, the rule is not triggered by the mere fact that the statutory lan guage may be "amenable to more than one reasonable interpretation." Pet. App. 12a, 67a; see Muscarello v. United States, 524 U.S. 125, 138 (1998). Instead, it "is reserved for cases where, [a]fter seiz[ing] every thing from which aid can be derived, the Court is left with an ambiguous statute." Smith v. United States, 508 U.S. 223, 239 (1993) (brackets in original) (internal quotation marks omitted).3

Petitioners are therefore incorrect when they assert (Pet. 17-18) that "the question of how much statutory ambiguity is required" to trigger application of the rule of lenity is "plainly unsettled." As petitioners note (Pet. 20-21), this Court stated in Ladner v. United States, 358 U.S. 169, 178 (1958), that the "policy of lenity means that the Court will not interpret a federal criminal statute [more harshly] * * * when such an interpretation can be based on no more than a guess as to what Congress intended." Although petitioners postulate (Pet. 21) that "that formulation plainly was not intended to be taken literally," this Court has repeatedly held, relying on Ladner, that the rule of lenity applies only when there is a "grievous ambiguity" in the statutory text, such that, "after seizing everything from which aid can be derived, . . . [the Court] can make no more than a guess to what Congress intended." Muscarello, 524 U.S. at 138-139 (internal quotation marks omitted); see Hol loway v. United States, 526 U.S. 1, 12 n.14 (1999); United States v. Wells, 519 U.S. 482, 499 (1997); Reno v. Koray, 515 U.S. 50, 64-65 (1995).4

There is no merit to petitioners' claim (Pet. 18-19, 26) that the court of appeals' decision is at odds with this Court's decisions in Crandon v. United States, 494 U.S. 152 (1990); Hughey v. United States, 495 U.S. 411 (1990); and Ratzlaf v. United States, 510 U.S. 135 (1994). Contrary to petitioners' reading, none of those cases held "that because the legislative history did not establish that the Government's interpretation was clearly correct, lenity compelled reading the statute to favor the defendant." Pet. 26. Indeed, none of the de cisions directly turned on the application of the rule of lenity. Rather, they held that legislative history cannot enlarge the scope of a statute beyond its terms where the plain language is not ambiguous. See Crandon, 494 U.S. at 160; Hughey, 495 U.S. at 422; Ratzlaf, 510 U.S. at 147 n.17. Those decisions are not relevant here, be cause the court of appeals did not rely on legislative his tory to adopt a construction of the statute broader than its plain language. Rather, the court relied on legisla tive history to support a construction that was "within the fair meaning of the statutory language," which the court considered to be ambiguous.5 R.L.C., 503 U.S. at 306 n.6; see Pet. App. 67a. And because the statutory language itself was broad enough to support the mean ing demonstrated by the legislative history, petitioners were not deprived of fair warning that their conduct was unlawful. See id. at 11a.

Petitioners' disagreement with the court of appeals' reading of the legislative history does not warrant fur ther review. See Pet. 27-31. Petitioners assert that "the Government's position receives merely weak support from the legislative history," Pet. 30, and that "[t]he central sources of legislative history * * * are either silent * * * or favor petitioners," Pet. 30-31, but the court of appeals held to the contrary after a thorough review. Pet. App. 67a-90a; see id. at 4a (noting prior decision's "rigorous analysis of the FCPA and its legisla tive history"). Petitioners suggest (Pet. 34) that this case provides an opportunity for the Court to resolve the scope of the FCPA's "obtaining or retaining business" element, but that is not even a question expressly posed by the petition (Pet. i), and the court of appeals' inter pretation of the FCPA does not conflict with any deci sion of any other court of appeals. Instead, petitioners have limited their question presented (Pet. i) to the ap plicability of the rule of lenity, and that abstract ques tion does not warrant review in this case.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

GREGORY G. GARRE
Acting Solicitor General
MATTHEW W. FRIEDRICH
Acting Assistant Attorney
General
JOSEPH C. WYDERKO
Attorney

JULY 2008

1 Petitioners incorrectly cite 15 U.S.C. 78ff(a) for the proposition that the FCPA criminalizes only "willful" violations. Pet. 2, 7, 9, 12, 13. But that provision applies to "[a]ny person who willfully violates any pro vision of this chapter (other than section 78dd-1 of this title)" (emphasis added). An individual who willfully violates Section 78dd-1 is subject to criminal penalties under 15 U.S.C. 78ff(c)(2)(A).

2 Petitioners assert (Pet. 9-10, 14 n.3) that the court of appeals held that the indictment sufficiently alleged willfulness only in the sense that the defendants acted knowingly, not in the sense that the defendants knew they were committing unlawful acts. But after explaining that "the language of the indictment described the exact type of conduct required for a finding of willfulness," the court observed that, "[a]s we discussed in detail in the context of jury instructions, criminal willful ness requires only that criminal defendants have knowledge that they are acting unlawfully or 'knowledge of the facts that constitute the offense,' depending on the definition followed." Pet. App. 30a (citation omitted). And the court had earlier concluded that the jury instructions were sufficient because they captured both of those definitions of willfulness. Id. at 22a-27a. Thus, the opinion indicates that the court evaluated the sufficiency of the indictment under both definitions of willfulness. Id. at 30a-31a.

3 Petitioners suggest (Pet. 31) that "the Court should use this case to decide whether legislative history is ever a sufficient basis to con strue an otherwise ambiguous criminal statute expansively against a defendant." That issue is not properly presented in this case, because petitioners did not raise it below on either appeal; the court of appeals did not address it; and, as discussed, the text and structure of the sta tute alone preclude petitioners' proposed interpretation.

4 Contrary to petitioners' contention (Pet. 25), the court of appeals did not hold "that lenity applies only when all the available tools of statutory construction leave the court entirely at sea regarding the statute's meaning." Rather, the court simply observed that "[t]he rule only applies in situations of ambiguity more extreme than here, where 'after seizing everything from which aid can be derived, [a court] can make no more than a guess as to what Congress intended.'" Pet. App. 15a-16a (second pair of brackets in original) (quoting Koray, 515 U.S. at 65). Nor are petitioners correct when they assert that the court of appeals "frankly acknowledged" that, "even after considering the legis lative history, 'the business nexus standard is ambiguous.'" Pet. 31 (quoting Pet. App. 6a); see id. at 8. In fact, the court held that the leg islative history of the FCPA clarified any ambiguity in the statutory language. See Pet. App. 17a-18a, 75a.

5 As noted above, the government does not consider the language to be ambiguous, and no other court of appeals has examined the question.