William Jefferson corruption case marks a legal first
by Jonathan Tilove, Washington bureau, The Times-Picayune
Sunday July 12, 2009, 9:00 PM
ALEXANDRIA, VA. -- Former U.S. Rep. William Jefferson is the first and only U.S. public official to be charged under the Foreign Corrupt Practices Act since it was enacted in 1977.
He is one of only two individuals in the past five years to go to trial on charges under the act. On Friday, the other one, Connecticut businessman Frederic Bourke, was found guilty by a New York City jury.
The act deals with certain business accounting practices and -- in the Jefferson's case -- the alleged bribery of foreign officials.
"Juries do not like to hear about bribes to foreign officials -- and there are very, very few defenses from FCPA charges," said Richard Cassin, an international attorney based in Singapore who has a blog that tracks such cases.
And yet, said Cassin, who practiced law in New Orleans for a couple of years in the late 1980s, "the evidence in this case looks a little thin."
Consider, Cassin said, that when it comes to the Foreign Corrupt Practices charge, the most compelling piece of evidence in the case -- the $90,000 in cash the FBI found in the freezer of Jefferson's Washington, D.C., home in August 2005 -- is as useful to the defense as it is to the prosecution.
"The money so spectacularly found in the freezer -- it was in the freezer; it was not in the bank account of a foreign official," Cassin said.
The only evidence that Jefferson intended to use the money to bribe Atiku Abubakar, then the vice president of Nigeria, are Jefferson's taped comments to Lori Mody, who was wearing a wire as a cooperating witness for the FBI. The prosecution is asking the jury to accept on face value the words of a man whose trustworthiness it is otherwise working to impugn.
The complex case against Jefferson is not riding on the Foreign Corrupt Practices Act charges. The 16 counts against the former nine-term Democratic congressman from New Orleans also include conspiracy to solicit bribes by a public official and deprive the citizens of the honest service of their elected representative by wire fraud. He also is charged with racketeering, obstruction of justice and money laundering.
But the charges under the Foreign Corrupt Practices Act are novel, and they speak directly to the $100,000 in marked FBI dollars that Jefferson accepted from Mody in a Virginia parking lot on July 30, 2005. Of that money, $90,000 ended up in his freezer, $5,000 was loaned to an aide in financial difficulty and the remaining $5,000 was returned to the FBI.
On the face of it, the Foreign Corrupt Practices Act charges should be easier than the others to make stick, according to Roberto Facundus, a Washington attorney who teaches a one-credit course on the FCPA at Tulane Law School.
Jefferson's defense is arguing that he is not guilty of the bribery charges because he was acting as a private individual and not committing official acts as a member of Congress. But Facundus points out, under the Foreign Corrupt Practices Act, that makes no difference.
Also, Facundus said, "for the purposes of the FCPA, it doesn't matter if the money was actually delivered, it's sufficient if he promised the money or offered the money."
Facundus said that in the act's first decades on the books, enforcement was mostly dormant.
According to the Justice Department, there were zero enforcement actions as recently as 2000, but in the years since those numbers inched up into the single digits, and there were 16 actions each in 2007 and 2008.
Most of actions are brought against companies and their executives doing business abroad, and they usually settle or plead guilty. The Bourke and Jefferson cases are the big exceptions. Bourke faces up to 10 years in prison for conspiring with others to corrupt the oil privatization process in Azerbaijan.
The centerpiece of the Foreign Corrupt Practices Act charge against Jefferson is that he offered to pay Abubakar a cash bribe up front and a piece of the action on the back end in exchange for his help in gaining the necessary approval in Nigeria for a telecommunications venture Mody was pursuing in what had effectively become a partnership with Jefferson.
The prosecution last week pointed to a July 18, 2005, visit Jefferson and Mody made to meet with Abubakar in his suburban Virginia home. In the course of that visit, according to prosecutors, Jefferson met privately with Abubakar. On the way home and in ensuing taped conversations with Mody played for the jury, Jefferson can be heard suggesting that Abubakar had agreed to the corrupt bargain.
Abubakar has denied he was involved in any such thing, but the international complications have prevented the defense from being able to call him as a witness in the trial.
In an excerpt of a taped conversation from Aug. 1, 2005, that was played for the jury last week, Jefferson assures Mody that he delivered Abubakar the "African art."
The FBI assumed that meant that he had delivered the $100,000 bribe to Abubakar. As a consequence, they closed down their sting operation and on Aug. 3, 2005, FBI agents raided Jefferson's homes in New Orleans and Washington, and the Abubakar home in Potomac, Va. To their surprise, they found most of the marked bills in Jefferson's freezer.
According to Jonathan Turley, a professor of law at George Washington University who has been following the case, Jefferson's best defense against the Foreign Corrupt Practices charge is that he never had any intention of bribing Abubakar, that he simply took the money from Mody and was using Mody and Abubakar "like marks in a con game."
That's not a pretty defense, but he is not charged with grifting Mody.
In his opening statement, lead defense counsel Robert Trout indicated that Jefferson was manipulated into accepting the money by Mody and that he did "something stupid," and took it.
To be guilty of the Foreign Corrupt Practices Act charge, Cassin said, "there has to be a payment or a promise of a payment," and, he speculated, if Jefferson testifies he may simply say, "I didn't know what I was going to do with the money. I was trying to make up my mind what to do, but I wasn't going to pay it as a bribe."
Ultimately, Jefferson's fate may not hinge on the FCPA charge. And Turley said the government must also hope that its case doesn't come down to that.
"Because it's a novel charge, this is going to be one of the main issues on appeal if (the prosecution) prevails," Turley said. "The problem is the offense has very little case development to instruct the court or counsel.
"If the government wants a conviction that will stick, it's going to have to secure convictions on some of those other counts," Turley said.
Jonathan Tilove can be reached at email@example.com or 202.383.7827.