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A federal judge has denied a motion to dismiss an indictment on the argument that the officials who allegedly were bribed didn’t meet the definition of “foreign official” under the Foreign Corrupt Practices Act. The ruling was the first to address whether a “foreign official” could include executives who work for a state-owned corporation. While the government has maintained that that it does, defense attorneys increasingly have challenged that definition. U.S. District Judge Howard Matz in Los Angeles ruled during a hearing on April 1 that executives of state-owned corporations do count. “This is a motion that warrants and will receive a very considered, written ruling,” he said. His decision turned primarily on the legislative history of the FCPA, which was passed in 1977. The law defines a “foreign official” as “any officer or employee of a foreign government or any department, agency or instrumentality thereof, or of a public international organization.” Janet Levine, a partner at Crowell & Moring in Los Angeles who represents one of the defendants, attempted to argue in court that Congress did not intend to include executives of state-owned corporations when it passed the law. But Matz disagreed with her analysis and cited her own definition of “instrumentality” in ruling against her. “The language itself and the very definition of ‘instrumentality’ you propose in your briefs makes it unnecessary to engage in the legislative history,” he said, citing the Webster’s definition in her brief of “instrumentality” as “serving as a means or agency.” The federal government has charged Lindsey Manufacturing Co., which makes emergency power transmission systems; its president, Keith Lindsey; and Lindsey’s vice president and chief financial officer, Steve Lee, with conspiracy to pay a sales representative in Mexico to bribe officials of the Comisión Federal de Electricidad, a state-owned utility company. It also charged the sales representative, Enrique Noriega, and Noriega’s wife, Angela Aguilar. Earlier, Matz denied three motions to dismiss the indictment, two of them based on allegations of prosecutorial misconduct. He suppressed statements made to FBI agents who raided Lindsey Manufacturing’s offices in Azusa, Calif., on Nov. 20, 2008, finding that Lindsey had not been given a Miranda warning. Opening statements are scheduled for April 5. In support of his ruling on the “foreign official” motion, Matz noted that electricity is a government function in Mexico and that utility company refers to itself on its Web site as a governmental agency. Matz praised the defense attorneys for their work in crafting the argument, calling the effort by Levine, who represents Lee, “an able response by an artful advocate.” “This motion to dismiss has been framed by the defendants in an exceedingly absolute and pristine fashion,” he said. Another motion to dismiss based on similar arguments was filed on Feb. 21 in a separate case in Santa Ana, Calif., in which the federal government has accused six former executives of a California valve company of paying $1.95 million in bribes to employees of several state-owned corporations in China. The bribes allegedly resulted in net profits of about $46.5 million. A hearing on that motion is scheduled for May 9. On April 4, U.S. District Judge James Selna, who is hearing the Santa Ana case, denied a motion by one of the defendants, Han Yong Kim, to make a special appearance in the case in order to join in the “foreign official” dismissal motion. The government has been seeking to extradite Kim from South Korea, where he resides. Amanda Bronstad can be contacted at [email protected].

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