Thursday, September 10, 2009

"Foreign Officials" in Puerto Rico?

While reading the DOJ release today regarding the guilty plea of Dr. Candido Negron Mella (see here), I was reminded of a conversation I had a few years back with a former law firm colleague during which we scratched our heads wondering if a Puerto Rico government official could be a "foreign official" under the FCPA. Because the statute defines "foreign official" as being an "officer or employee of a foreign government ..." we surmised that the answer was no, but agreed that the question was nevertheless an interesting issue to ponder.

The Mella enforcement action would seem to bear all the hallmarks of an FCPA enforcement action. As set forth in the release, Mella pleaded guilty to conspiracy to violate the Federal Election Campaign Act for "his participation in a corruption scheme involving the 2000 Resident Commissioner campaign of a former governor of Puerto Rico." The release notes that "Mella was a partner in a company that had a professional relationship with a large Medicaid dental provider in the United States that was interested in obtaining a direct dental agreement with the Commonwealth of Puerto Rico." According to the release, "[i]n order to assist that provider in obtaining a contract in Puerto Rico" Mella agreed to raise contributions for the campaign and he admitted that he hoped that contributing to the campaign "would enable him to obtain access to the government of Puerto Rico to promote his business interests."

All the hallmarks of an FCPA enforcement action that is ... except a foreign official. At least that is my conclusion from reading the Mella enforcement action and the lack of FCPA charges.

I ponder no more.


  1. I am surprised that you would make a judgement whether there exist FCPA enforcement action based on a DOJ press release. Or in that case even a copy of the indictment. Get the facts of the case. This was a case of selective prosecution/ the Governor was acquitted of all charges. Even the fact that all Puerto Ricans are american citizens, should be enough for you to remove this absurd posting concerning FCPA action.

  2. You seem to miscontrue what I am saying in this post.

    I was never suggesting that this SHOULD have been an FCPA enforcement action.

    What I am simply saying is this - some may wonder whether Puerto Rico is a "foreign government" such that Puerto Rican officials are "foreign officials" under the FCPA. The prosecution and guilty plea of Mella - based on facts that he provided things of value to Puerto Rican candidates for political office in hopes of promoting his business interests - suggest that the answer is no - otherwise DOJ would have presumably included FCPA anti-bribery charges against Mella.

  3. What I know about this case concerning the ex-Governor of Puerto Rico is that this indictment should had never taken place. This was an FEC campaign case and it should had been handled as a civil case within the jurisdiction of the FEC. There was no honest service fraud charge brought so there was no "quid pro quo". I am not sure about the total of contributions, but I believe it was in the 20-30k range. The prosecutors in the case gave immunity to a campaign donor who gave 250k in a conduit fashion. Now that makes no sense at all. I dont think even if PR was a foreign country that this case against Mella meets the threshold of an FCPA action. As far as the first post, I believe the reader took offense by you even assuming that PR or an official would be considered a foreigner. Nevertheless even with the assumption it is a weak example of an FCPA case. The prosecutors in this case I believe were overzealous and I will agree with the previous post selective in nature. FEC handles thousands of cases like these with the government official usually not knowing about the contributions being illegal, and at the end of this case the truth was the the ex-governor did not know about the conduit contributions and was acquitted of all charges. Regards