Federal Criminal Enforcement & Tribal Nations
White Collar Crime and Internal Investigations Alert 02/10/20 Jonodev O. Chaudhuri
As “domestic dependent nations” that “retain sovereign powers,” Tribal Nations have limited sovereignty in relation to the federal government. The Constitution’s Commerce Clause lists “Indian Tribes” separately from the several states and foreign nations, but this “government-to-government” approach presents numerous sovereignty concerns with significant implications for federal criminal enforcement.
Tribal Nations, and those doing business with them, should be aware of Federal Programs Bribery, the Travel Act, and even, potentially, the Foreign Corrupt Practices Act (FCPA). Five important takeaways about these statutes are listed below.
Federal Programs Theft or Bribery
Federal program bribery, 18 U.S.C. § 666, was designed to protect the integrity of federal funds to encompass local officials. Tribal Nations that receive over $10,000 in federal funds annually fall within its purview.
Section 666 specifically lists “Indian tribal governments” and criminalizes a broad range of criminal conduct. It requires proof of five elements: (1) a defendant was an agent of an organization, state, local, or “Indian tribal” government, or any agency thereof; (2) in a one-year period that organization received federal benefits in excess of $10,000; (3) a defendant stole, embezzled, obtained by fraud, knowingly converted, or intentionally misapplied property; (4) that property was owned by, or in the care, custody, or control of, the organization; and (5) the value of that property was at least $5,000.
In a § 666 prosecution, the government does not need to prove that the federal funds were implicated in the scheme, the $5,000 threshold refers to the value of the business or transaction sought to be influenced, and may be aggregated so long as it falls with the one-year period.
The Travel Act
The Travel Act allows a state law crime to be brought into federal court if certain jurisdictional requirements are met and may apply to conduct occurring in Tribal Nations.
The Travel Act, 18 U.S.C. § 1952, makes it a crime for an individual “to travel in interstate or foreign commerce or use the mail or any facility in interstate or foreign commerce, with the intent to - (1) distribute the proceeds of any unlawful activity; or (2) commit any crime of violence to further any unlawful activity; or (3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity” and then perform or attempt to perform that activity.
“Unlawful activity” has several different meanings, including extortion, bribery, or arson in violation of the laws of the State in which it was committed or of the United States.
In United States v. Boots, 80 F.3d 580 (1st Cir. 1996), the defendant was charged with a Travel Act violation when he offered a tribal police chief a bribe to further an illegal tobacco importation scheme. The police chief notified the Bureau of Indian Affairs and worked undercover for the FBI. The defendant was ultimately convicted.
The Court of Appeals affirmed the conviction because the police chief was a “public official” since the State of Maine “equated, in most respects, the powers and obligations of tribes and tribal law enforcement officers with those of municipalities and corresponding law enforcement officers.” The Travel Act’s applicability varies from state-to-state and official to official.
The FCPA, as amended, 15 U.S.C. §§ 78dd-1, et seq., prohibits the payment of bribes to foreign officials to obtain or retain business. It applies to prohibited conduct anywhere in the world by publicly traded companies and their officers, directors, employees, stockholders, and agents. Agents includes third parties, consultants, distributors, joint-venture partners, and others.
Penalties for FCPA violations can be significant. The Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) are jointly responsible for enforcement of the statute, and both the SEC's Enforcement Division and the DOJ’s Criminal Division have units dedicated exclusively to the investigation of FCPA violations.
Whether one qualifies as a "foreign government official" under the FCPA is an often-litigated issue. Courts have found that employees of foreign governments routinely qualify as such officials. However, the definition is less clear for other types of officials. For example, Tribal Nation members are representatives of separate sovereigns, but would they qualify as a “foreign government official” under the FCPA?
The FCPA defines a “foreign government official” as “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.” The DOJ has interpreted this definition broadly to include “any” official of a foreign government. The FCPA “covers corrupt payments to low-ranking employees and high-ranking officials alike.”
In an advisory opinion about whether a royal family member qualified as a foreign official, the DOJ noted several factors that, while not exhaustive, should be considered including, but not limited to, the following:
- the structure and distribution of power within a country’s government;
- the current and historical legal status and powers;
- the individual’s position and present and past positions within the government;
- the mechanisms by which an individual could come to hold a position with governmental authority or responsibilities; and,
- the likelihood that an individual would come to hold such a position; an individual’s ability, directly or indirectly, to affect governmental decision-making.
The DOJ clarified that its list was not exhaustive and included unlisted “numerous other factors.” Ultimately, whether an individual qualifies as a foreign government official will be determined on a case-by-case basis. It is unclear, and unlikely, that a federal prosecutor would invoke the FCPA in the context of a Tribal Nation or its officials, however, it is nonetheless a significant federal enforcement tool to be aware about.
Here are five takeaways for those in Tribal Nations and individuals and companies working with them:
- Federal program bribery and theft specifically contemplates Congress’ intent to protect federal funds received by Tribal Nations and covers a broad scope of conduct.
- The Travel Act is a potential means for the DOJ to police interactions between individuals, companies, and Tribal Nations, but varies according to state law.
- The FCPA applies to publicly traded companies and their officers, directors, employees, stockholders, and agents. The structure and distribution of power within the government, the individual’s present and past position and ability, directly or indirectly, to affect governmental decision-making are other important factors.
- Although it is unlikely that a Tribal Nation member would be considered a foreign official under the FCPA due to the DOJ’s view of Tribal Nations as "domestic dependent nations," 93 separate U.S. Attorney’s Offices making separate investigative and charging decisions does not preclude the possibility of an investigation and Tribal Nation members should be aware of the statute and its scope.
- Compliance programs are effective tools to monitor vulnerable areas, detect issues before they occur, or to implement remedial measures afterward.
For more information on the FCPA, Travel Act, Federal Program Theft or Bribery, or issues affecting Tribal Nations, please contact your Quarles & Brady attorney or:
- Jonodev O. Chaudhuri at (202) 780-2635/ [email protected]
 U.S. Department of Justice, Department of Justice Policy on Indian Sovereignty and Government-to Government Relations with Indian Tribes (Jun. 1, 1995), https://www.justice.gov/archives/ag/attorney-general-june-1-1995-memorandum-indian-sovereignty.
 18 U.S.C. § 1952(a).
 Id. § 1952(b).
 Overruled in part by Pasquantino v. United States, 544 U.S. 349 (2005).
 Boots, 80 F.3d at 591.
 15 U.S.C. § 78dd-2(h)(2)(A).
 Department of Justice, A Resource Guide to the U.S. Foreign Corrupt Practices Act, at 19 (2012), https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2015/01/16/guide.pdf.
 Id. at 20.
 Department of Justice, Opinion Procedure Release No. 12-01, at 5 (2012), available at https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2012/09/27/1201.pdf.