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In the past year, the Foreign Corrupt Practices Act has been a major concern in Hollywood, since the entertainment industry does a lot of business overseas and has been chasing new opportunities in countries like China. A ruling on Thursday by the Ninth Circuit Court of Appeals will offer no relief from anxiety over potential liability when the government decides to crack down on instances of bribery in foreign countries.
Bringing the appeal were Gerald Green, whose producing credits include Rescue Dawn, and Patricia Green, who was a producer of The New Swiss Family Robinson.
The husband-and-wife team also ran the Bangkok International Film Festival after winning contracts from the Tourism Authority of Thailand. The festival brought in an estimated $140 million of profits and ranked among the top 15 film festivals in the world. One industry insider once predicted the festival would “become the Cannes Film Festival of the East within a year or two.”
The problem, as detailed by an informant who blew the whistle on the Greens to the FBI, was that the couple had helped secure their lucrative contracts by paying $1.8 million to the governor of Thailand’s Tourism Authority.
The Greens were charged and convicted on violations of the FCPA and money laundering. A judge ordered six months’ imprisonment, three years of supervised release and $250,000 in restitution. The appeal was made on the basis that that the restitution order shouldn’t have been made by a judge without a jury’s finding there was “an identifiable victim or victims” who suffered a “pecuniary loss.”
Writing the Ninth Circuit’s opinion was Chief Judge Alex Kozinski.
He rejects the appellants’ contention that the restitution order violated the U.S. Supreme Court’s 2000 ruling in Apprendi v. New Jersey, which laid out some basis for putting sentencing in a jury’s hands.
Kozinski notes that “while the Supreme Court has yet to hold whether Apprendi applies to restitution, it has said in dictum that ‘[i]ntruding Apprendi’s rule into’ decisions to impose ‘statutorily prescribed fines and orders of restitution’ would ‘cut the rule loose from its moorings.’ That’s some indication the Court would not apply Apprendi to restitution… .”
The judge also declined to accept the Greens’ “trigger argument” that while Apprendi might not apply to the amount of restitution, it should pertain to restitution in the first place. Nor the other way.
Kozinski asks, “If Apprendi covers the determination whether there are any victims at all, shouldn’t it also cover the determination whether there’s one victim who suffered a $1,000 loss as opposed to 1,000 victims who suffered a combined $1,000,000 loss?”
Finally, the judge also looks at Southern Union Co. v. United States, a more recent Supreme Court case that held that any fact which increases the maximum punishment authorized for a particular crime be proven to a jury. That case meant that criminal fines were brought under Apprendi’s umbrella, but Kozinski says it’s not “clearly irreconcilable” that restitution isn’t.
Criminal fines aren’t the same thing as restitution, says the judge, as the first deals with punishment and the latter involves some form of making victims whole. Kozinski also elucidates another difference in so far as Southern Union dealt with a “determinate punishment scheme with statutory maximums.”
Still, the judge says that if the 2011 Supreme Court decision happened earlier, it might have influenced the Ninth Circuit to adopt different standards that could have altered today’s outcome. “Nonetheless, our panel can’t base its decision on what the law might have been,” he says.
Which means that two Hollywood producers who were convicted of bribing Thai officials to make a film festival are out of luck. It also gives latitude to future judges imposing monetary restitution awards in foreign bribery convictions.
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