23 Jul

I’m in Monterey, CA this week for the Carmel Valley eDiscovery Retreat. First day is almost done. Nary an FCPA question to be found.

Here’s one for you. I’m still marinating over the Jackson & Ruehlen briefs, and some of the arguments that were made.

One of the arguments Ruehlen made was about the pleading requirement. Ruehlen said that the SEC failed to plead in its Complaint that the payment was not a facilitation payment.

The SEC opposed the motion to dismiss, claiming that the facilitation payment exception wasn’t so central to the violation that it needed to be pleaded separately.

In his Reply, Ruehlaen argued that if facilitation payments were an affirmative defense, that the SEC would be right. But since its an exception, that’s a problem. And the problem is doubled because if the SEC must plead the negative (that the payment wasn’t a facilitation payment), and in this case, they don’t have the identity (or at least aren’t providing it) of the government official.

Ruehlen logically argues, if you can’t name the official, how can you say that the benefit wasn’t in his non-discretionary authority?

The SEC’s argument is essentially that what’s important isn’t the identity of the recipient, it’s the mind of the payor. I’m in general agreement with that.

But I also think that exceptions to the statute need to plead.

I could be wrong about that. What do you think?


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