Case Analysis: US v. Blondek - FCPA Conspiracy and its Implications

This case study delves into the United States v. John Blondek case, focusing on the Department of Justice's efforts to control corrupt foreign officials accepting bribes. The case examines the application of the Foreign Corrupt Practices Act (FCPA) in an alleged scheme involving the sale of buse...Read More

United States of America v. John BLONDEK, Vernon R.
Tull, Donald Castle, and Darrell W.T. Lowry (1990)

Table of Contents
Importance of the Case...............................................................................................................3
Conclusion..................................................................................................................................4
References..................................................................................................................................4

Importance of the Case
In this case, the Department of Justice (DOJ) has amplified their efforts to control corrupt
foreign officials allegedly accepting bribes in return for improper commercial or corporate
advantages. This prosecution can be considered as wider strategy of the DOJ to target the
demand part of the foreign bribery instead of concentrating on individuals who pay bribes. In
this case, Foreign Corrupt Practices Act (FCPA) implementation actions were applied by the
DOJ during initial period of 1990s, regarding the alleged scheme to accept their bid to sell
buses to the Saskatchewan provincial government (Stanford University, 2018). The trial court
as well as the appellate court reproached the position of the DOJ, that the suspected foreign
officials were charged with plotting to infringe the FCPA and the decisions of both the courts
included broad analysis of the legislative history of the FCPA. The alleged bribe payers, the
two defendants were found not guilty. When Castle and Lowry claimed to dismiss the
allegations against them because they were Canadian officials, the issues outlined by the
court were that defendants could not be prosecuted for the violation of FCPA itself, because
the Act does not penalize the acceptance of bribe by foreign official but, the government can
prosecute foreign officials under the general conspiracy law for conspiring the violation of
the FCPA (Westlaw, 2012).
Considering the Gebardi v. U.S., the court stated that it might not permit the Executives to
make the intention of Congress ineffective by not prosecuting the foreign officials for their
involvement in the illegal activities (FCPA Professor, 2017). Based on the legislative history,
the Court established what was found by the Supreme Court in Gebardi that the Mann Act
was an assenting legislative policy to leave without punishing, a distinct group of persons
who were important parties, found being involved in the violation of the substantive law.
In the 5th Circuit Opinion, the court held that foreign officials might not be impeached under
18 USC 371 for the conspiracy to disobey the FCPA but, the scope of holding and the

purpose that is involved is entirely established in the opinion of the trial court. It was
established by the trial court that the foreign officials accepting the bribe were excluded from
the prosecution for the applicable offense (FCPA Professor, 2017). However, the Congress
involved every potential person associated with such payments apart from foreign officials, it
can be concluded that the Congress might have affirmatively opted to exempt the foreign
officials from prosecution. The legislative history frequently mentioned about the negative
impact of the revelation of such bribes and, it was reflected upon by the law that the illegal or
unethical payments within the US, which might not be considered in a similar manner in
foreign countries, such payments cannot be outlawed (Dearington, 2017).
Conclusion
The conclusion of the report is that the foreign officials involved in conspiracy of infringing
the anti-bribery laws and provisions of the FCPA might not be prosecuted. The decision of
the Congress to pass by such prosecutions was supported by the facts of this case, because
foreign countries are required to prosecute their own officials for taking the bribes. As the
defendants foreign officials were Canadian officials, the Canadian police had been
investigating the case.
References
Dearington, M.F., 2017. Ocasio v. United States: The Supreme Court’ Sudden Expansion of
Conspiracy Liability (And Why Bribe-Taking Foreign Officials Should Take Note).
Washington and Lee Law Review Online, 74(1), pp.204-10.
FCPA Professor, 2017. How The Supreme Court’s Hobbs Act Decision In Ocasio v. United
States Could Expand The Bounds Of Conspiracy Law And Mean Trouble For Bribe-Taking
Foreign Officials. [Online] Available at: http://fcpaprofessor.com/category/demand-for-
bribes/ [Accessed 21 September 2018].

Stanford University, 2018. United States of America v. John Blondek, et al. [Online]
Available at: http://fcpa.stanford.edu/enforcement-action.html?id=8 [Accessed 20 September
2018].
Westlaw, 2012. United States of America v John BLONDEK, Vernon R. Tull, Donald
Castle,and Darrell W.T. Lowry. [Online] Available at:
https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2012/06/22/1990-06-04-
blondekj-memo-dismiss-indict-%28castle-lowry%29.pdf [Accessed 21 September 2018].