Sigelman Motion To Dismiss

Case 1:14-cr-00263-JEI Document 112 Filed 10/29/14 Page 1 of 38 PageID: 1117
UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA
v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
ORDER
AND NOW, this __________ day of ____________________, 2014, after consideration

of Defendant Joseph Sigelmans Motion to Dismiss FCPA Charges and Request for Hearing on
Issues of Foreign Law, and any response thereto, it is hereby ORDERED that the Motion is
GRANTED, and that all Foreign Corrupt Practices Act charges against Joseph Sigelman,
including Counts Two, Three, and Four of the indictment, as well as the portions of Counts One
and Five that charge Joseph Sigelman with conspiracy to violate, and with conspiracy to transfer
money with the intent to violate, the Foreign Corrupt Practices Act, are hereby DISMISSED.
BY THE COURT:
_________________________________________
HONORABLE JOSEPH E. IRENAS
SENIOR UNITED STATES DISTRICT JUDGE

v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
ORDER
AND NOW, this __________ day of ____________________, 2014, after consideration

of Defendant Joseph Sigelmans Motion to Dismiss FCPA Charges and Request for Hearing on
Issues of Foreign Law, and any response thereto, it is hereby ORDERED that, pursuant to
Federal Rule of Criminal Procedure 26.1, a hearing on issues of Colombian law shall be held on
____________________________, 2014, at _____________ in Camden Courtroom 1 before
the Honorable Joseph E. Irenas.
BY THE COURT:
_________________________________________
HONORABLE JOSEPH E. IRENAS
SENIOR UNITED STATES DISTRICT JUDGE
Patrick J. Egan
Matthew S. Olesh
FOX ROTHSCHILD LLP
2000 Market Street, 20th Fl.
Philadelphia, PA 19103
Tel: (215) 299-2825
Fax: (215) 299-2150
pegan@foxrothschild.com
William Burck
Ben ONeil
Veronica Yepez
Jonathan Cooper
QUINN EMANUEL URQUHART
& SULLIVAN LLP
777 6th Street NW
Washington, DC 20001
Tel: (202) 538-8000
Fax: (202) 538-8100
williamburck@quinnemanuel.com

v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
NOTICE OF DEFENDANTS MOTION TO DISMISS FCPA

CHARGES AND REQUEST FOR HEARING ON ISSUES OF FOREIGN LAW
TO:
Daniel S. Kahn, Esquire

Assistant United States Attorney
United States Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530-0001
Zach Intrater, Esquire

Assistant United States Attorney
U.S. Attorneys Office, Room 700
970 Broad Street
Newark, NJ 07102
PLEASE TAKE NOTICE that, on a date and time to be set by the Court, defendant
Joseph Sigelman, by and through his undersigned attorneys, will move before the United States
District Court for the District of New Jersey under Federal Rule of Criminal Procedure 12(b)(3)
for an Order dismissing all of the Foreign Corrupt Practices Act charges against Mr. Sigelman,
namely Counts Two, Three, and Four of the indictment, as well as the portions of Counts One
and Five that charge Mr. Sigelman with conspiracy to violate, and with conspiracy to transfer
money with the intent to violate, the Foreign Corrupt Practices Act, for failure to state an offense.
Mr. Sigelman will further request that the Court hold a hearing on issues of Colombian law
pursuant to Federal Rule of Criminal Procedure 26.1.
Mr. Sigelman will rely on the memorandum of law and exhibits submitted herewith in
support of his Motion. Oral argument is requested if the Motion is opposed.
Patrick J. Egan, Esquire

Matthew S. Olesh, Esquire
FOX ROTHSCHILD LLP
2000 Market Street, 20th Floor
Tel: (215) 299-2825
Fax: (215) 299-2150
/s/ William Burck
William Burck, Esquire
Ben ONeil, Esquire
Veronica Yepez, Esquire
Jonathan Cooper, Esquire
QUINN EMANUEL URQUHART &
SULLIVAN, LLP
777 6th Street NW
11th Floor
Washington, D.C. 20001-3706
Tel: (202) 538-8000
Fax: (202) 538-8100
Counsel for Defendant Joseph Sigelman
Dated: October 29, 2014
William Burck
Ben ONeil
Veronica Yepez
Jonathan Cooper
QUINN EMANUEL URQUHART
& SULLIVAN LLP
777 6th Street NW
Washington, DC 20001
Tel: 202.538.8000
Fax: 202.538.8100
Patrick J. Egan
Matthew S. Olesh
FOX ROTHSCHILD LLP
2000 Market Street, 20th Fl.
Tel: 215-299-2825
Fax: 215-299-2150

v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
DEFENDANTS MOTION TO DISMISS FCPA CHARGES AND

REQUEST FOR HEARING ON ISSUES OF FOREIGN LAW
Joseph Sigelman, through his undersigned counsel, respectfully moves this Court under
Federal Rule of Criminal Procedure 12(b)(3) to dismiss for failure to state an offense Counts
Two, Three, and Four of the indictment, as well as the portions of Counts One and Five that
charge Sigelman with conspiracy to violate, and with conspiracy to transfer money with the
intent to violate, the Foreign Corrupt Practices Act. Sigelman further requests that this Court hold
a hearing on issues of Colombian law pursuant to Federal Rule of Criminal Procedure 26.1.
Respectfully submitted,

FOX ROTHSCHILD LLP
Tel: (215) 299-2825
Fax: (215) 299-2150
/s/ William Burck
Ben ONeil, Esquire
SULLIVAN, LLP
777 6th Street NW
11th Floor
Tel: (202) 538-8000
Fax: (202) 538-8100
Attorneys for Joseph Sigelman

v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
MEMORANDUM IN SUPPORT OF
DEFENDANTS MOTION TO DISMISS FCPA CHARGES AND
REQUEST FOR HEARING ON ISSUES OF FOREIGN LAW
TABLE OF CONTENTS
INTRODUCTION ...........................................................................................................................1
BACKGROUND .............................................................................................................................3
I.
The Foreign Corrupt Practices Act ..........................................................................3
II.
The prosecutions allegations against Joseph Sigelman. .........................................5
ARGUMENT...................................................................................................................................5
I.
This Court should hold a hearing to resolve issues of Colombian law....................6
II.
As a matter of Colombian law, Ecopetrol did not perform any

governmental function in 2010. ...............................................................................7
III.
IV.
A.
From 1951 to 2003, Ecopetrol performed governmental functions

and received special subsidies and privileges from the government. ..........7
B.
In 2003, Colombian law removed Ecopetrols governmental

functions and started treating it as an ordinary participant in the oil
and gas markets............................................................................................9
C.
The minimal allegations in the indictment about governmental

functions Ecopetrol supposedly performs are incorrect as a matter
of Colombian law.......................................................................................13
Duran was not a foreign official under the FCPA in 2010 because
Ecopetrol was neither an instrumentality nor an agency of Colombia. ..........15
A.
An entity must perform a governmental function to be an

instrumentality. .......................................................................................15
B.
Ecopetrol did not perform a governmental function in 2010, so it

was not an instrumentality of Colombia.................................................17
C.
For the same reasons, Ecopetrol was not an agency of Colombia

in 2010. ......................................................................................................18
As applied to Sigelmans alleged conduct, the FCPAs definition of

instrumentality is unconstitutionally vague........................................................18
A.
Section 78dd-2(a) fails to give fair notice of what conduct it

prohibits. ....................................................................................................19
B.
The FCPA provision under which Sigelman is charged encourages

arbitrary and discriminatory enforcement..................................................22
i
C.
Courts cannot supply definitions where Congress did not. .......................23
CONCLUSION..............................................................................................................................24
ii
TABLE OF AUTHORITIES
Page(s)
Cases
Bond v. United States,

134 S. Ct. 2077 (2014).............................................................................................................23
Boulware v. United States,
552 U.S. 421 (2008)...........................................................................................................23, 24
City of Chicago v. Morales,
527 U.S. 41 (1999).................................................................................................18, 19, 22, 23
Hall v. Am. Nat'l Red Cross,
86 F.3d 919 (9th Cir. 1996) .....................................................................................................20
Jefferson Parish Hospital District No. 2 v. Hyde,
466 U.S. 2 (1984).....................................................................................................................14
Lanzetta v. New Jersey, 306 U.S. 451 (1939) ................................................................................19
Scheidler v. NOW, Inc.,
537 U.S. 393 (2003).................................................................................................................16
Skilling v. United States,
561 U.S. 358 (2010)...........................................................................................................19, 21
United States v. Bass,
404 U.S. 336 (1971).................................................................................................................16
United States v. Delle Donna,
552 F. Supp. 2d 475 (D.N.J. 2008) ........................................................................................1, 6
United States v. Esquenazi,
752 F.3d 912 (11th Cir. 2014) ......................................................................................... passim
United States v. Kay,
359 F.3d 738 (5th Cir. 2004) ...................................................................................................17
United States v. Lanier,
520 U.S. 259 (1997).................................................................................................................23
United States v. Molt,
599 F.2d 1217 (3d Cir. 1979).....................................................................................................7
United States v. Oakland Cannabis Buyers Coop.,
532 U.S. 483 (2001).................................................................................................................23
United States v. Panarella,
277 F.3d 678 (3d Cir. 2002)...................................................................................................5, 6
United States v. Peterson,
812 F.2d 486 (9th Cir. 1987) .....................................................................................................6
iii
Statutes and U.S. Constitutional Provisions

U.S. Const. art. 1, 1.....................................................................................................................23
12 U.S.C. 5213......................................................................................................................19, 20
15 U.S.C. 78dd-2 ..........................................................................................................................4
15 U.S.C. 78dd-2(a)(1) .............................................................................................................1, 4
15 U.S.C. 78dd-2(h)(2)(A)............................................................................................1, 5, 15, 19
18 U.S.C. 1839......................................................................................................................19, 20
22 U.S.C. 6023(5)(B)............................................................................................................19, 22
28 U.S.C. 1603(b) .................................................................................................................19, 22
42 U.S.C. 12209(4) ...............................................................................................................19, 20
Fed. R. Crim. P. 12(b)(3)(B)(v) .......................................................................................................5
Fed. R. Crim. P. 26.1 .........................................................................................................3, 6, 7, 24
Pub. L. No. 103-141, 107 Stat. 1488 (Nov. 16, 1993)...................................................................20
Other Authorities
Brief for the United States, United States v. Esquenazi,
No. 11-15331-C (11th Cir. Aug. 21, 2012)
available at http://www.scribd.com/doc/103498319/
U-S-v-Esquenazi-11th-Cir-Appeal-DOJ-Brief ....................................................................2, 15
Colombia Law No. 1118 of December 27, 2006, Whereby the Legal Nature of
Ecopetrol S.A. Is Amended and Other Provisions Are Issued,
available at http://www.ecopetrol.com.co/english/documentos/
41462_Ley_1118_de_2006.pdf .................................................................................................6
Constitucin Poltica de Colombia [C.P.] [Political Constitution of Colombia],
arts. 23445 & 25457, available at
http://confinder.richmond.edu/admin/docs/colombia_const2.pdf. ............................................7
Samantha Dreilinger, Esquenazi in Korea: Identifying Instrumentalities Abroad,
Law360 (Sept. 12, 2014), available at http://www.law360.com/articles/576519/esquenazi-inkorea-identifying-instrumentalities-abroad..............................................................................21
Merriam-Webster.com (accessed October 29, 2014), http://www.merriamwebster.com/dictionary/instrumentality. ..................................................................................................19
Mike Koehler, The Story of the Foreign Corrupt Practices Act,
73 Ohio St. L.J. 929 (2012)........................................................................................................3
iv
Heather Walsh, Shell, Repsol Win Oil Blocks at Colombian Auction,

Bloomberg News (Oct. 17, 2012), available at http://www.businessweek.com/
news/2012-10-17/colombia-lures-exxon-and-shell-to-auction-with-shale-oil. ......................12
H.R. Rep. No. 95-640 (1977).......................................................................................................3, 4
Organization for Economic Cooperation and Developments Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions (OECD Convention),
Dec. 17, 1997, S. Treaty Doc. No. 105-43, 37 I.L.M. 1 (ratified Dec. 8, 1998,
entered into force Feb. 15, 1999) .......................................................................................17, 18
S Rep. 95-114 (1977).......................................................................................................................3
INTRODUCTION
The indictment alleges that Joseph Sigelman violated the Foreign Corrupt Practices Act
(FCPA) by authorizing a set of payments in 2010 to David Duran, who the Government claims
was an employee of a Colombian corporation called Ecopetrol S.A. (Ecopetrol).1 Sigelman can
be liable only if Duran was a foreign official, 15 U.S.C. 78dd-2(a)(1), a term defined to
include any officer or employee of a foreign government or any . . . agency, or instrumentality
thereof. 78dd-2(h)(2)(A). To be an agency or instrumentality, an entity must perform a
governmental function. United States v. Esquenazi, 752 F.3d 912, 92122 (11th Cir. 2014).
The indictment is correct that Ecopetrol used to fit this description. Colombia created
Ecopetrol in 1951 to be the official state body in charge of regulating the nations hydrocarbon
resources. At the same time, Ecopetrol held a mandate to explore and extract oil and gas to sell in
the open market. For decades, it carried out these dual functions, albeit lethargically. Being a
government regulator stifled Ecopetrols ability to compete with private oil-and-gas companies.
Its access to credit markets was limited. The Colombian governments budget, rather than
business judgment, guided decisionmaking.
Colombia grew fed up with the lack of commercial success. So in 2003, it split Ecopetrol
in two. All of Ecopetrols regulatory and other governmental functions as well as its public
interest mandate were assigned to a new state entity, the National Hydrocarbon Agency. Once
divested of its government authority and functions, Ecopetrol became solely a commercial
enterprise, its exclusive mission being to thrive in the highly competitive energy market. To
further this mission and encourage Ecopetrol to be more competitive, Colombia amended its
laws to treat Ecopetrol like Chevron, ExxonMobil, Royal Dutch Shell, or any other private oil1
For purposes of this motion, Sigelman must accept as true the factual allegations
asserted in the indictment. United States v. Delle Donna, 552 F. Supp. 2d 475, 482 (D.N.J. 2008).
1
and-gas company. Ecopetrol became a corporation with shares of stock that could trade on public
markets. It lost its privileged access to Colombian oil fields and stopped receiving any special
benefits from the Colombian government, such as subsidies, dispensations, and tax exemptions.
It became subject to private commercial law. Thus, Colombias Commercial Code (which applies
to private companies) rather than Colombias General Contract Law for the Public
Administration (which applies to public establishments) would govern Ecopetrols contracts. The
labor code applicable to private companies would regulate Ecopetrols relations with its
employees.
In short, as of 2010, when the events in this case took place, Ecopetrol was, as a matter of
Colombian law, an ordinary market participant bereft of any governmental function. As the
Government conceded in United States v. Esquenazi, an entity devoid of a governmental function
is not an agency or instrumentality of a foreign government under the FCPA, regardless of
whether a foreign government owns a majority of the stock of that entity.2 So even if the factual
allegations in the indictment were true, the payments to David Duran would, as a matter of law,
not violate the FCPA because they were not made to a foreign official. Thus, the FCPA charges
must be dismissed.
Any contrary interpretation that stretches the definition of foreign official to cover
employees of entities that exercise no public function, like Duran, would render the FCPA void
for vagueness as applied to Sigelman. Nowhere in the statutes provisions is there fair notice that
it is unlawful to authorize payments to an employee of a corporation that does not perform any
governmental functions. Permitting the Government to use the FCPAa statute whose purpose
2
Brief for the United States, United States v. Esquenazi, No. 11-15331-C, at 19, 47 (11th
Cir. Aug. 21, 2012); accord United States v. Esquenazi, 752 F.3d 912, 921 (11th Cir. 2014) (the
parties . . . agree an instrumentality must perform a government function at the governments
behest).
2
is to penalize and discourage corruption of government officialsto prosecute payments made to

employees of corporations with no governmental functions would leave charging decisions to the
whims and personal views of prosecutors, with no reasonable foundation in the words of the
statute or the intent of Congress. Thus, if the Governments reading of the statute is correct, the
charges against Sigelman under the FCPA must also be dismissed on vagueness grounds.
Accordingly, Sigelman respectfully requests dismissal of all charges against him under
the FCPA: namely, Counts Two, Three, and Four in their entirety, plus the portions of Counts
One and Five alleging that Sigelman conspired to violate, and conspired to transfer money with
the intent to violate, the FCPA. Sigelman further requests that this Court hold a hearing on issues
of Colombian law pursuant to Federal Rule of Criminal Procedure 26.1.
BACKGROUND
I.
The Foreign Corrupt Practices Act

A major revelation in the wake of Vietnam and Watergate was that American corporations
were contributing large sums of money to politicians, not only in the United States but also
overseas. The disclosure of these payments to foreign government officials tarnished the
image of American democracy abroad. S Rep. 95-114 at 3 (1977). As distrust set in, Congress
sought to improve American foreign relations by ending corporate bribery of foreign officials. In
a series of hearings in the mid-1970s, Congress investigated allegations that major U.S.
companies, such as Exxon, Lockheed, Mobil Oil, Northrop, and United Brands, had bribed
foreign presidents, prime ministers, princes, and military generals.3 More than 400 corporations,
including 117 among the Fortune 500, admitted making questionable or illegal payments to
See Mike Koehler, The Story of the Foreign Corrupt Practices Act, 73 Ohio St. L.J. 929,
93435 (2012).
3
foreign government officials, politicians, and political parties. H.R. Rep. No. 95-640, at 4
(1977). These findings led to the enactment of the Foreign Corrupt Practices Act of 1977.
The FCPA makes it a crime for a U.S. corporation or citizen to willfully bribe a foreign
official to obtain or retain business. 15 U.S.C. 78dd-2. Rather than prohibit all payments to
overseas workers, Congress explicitly circumscribed the FCPAs domain to cover only payments
to a foreign official. 78dd-2(a)(1).4 As the statutes legislative history makes apparent,
Congresss concern was with bribes paid to people who perform governmental functions
presidents, prime ministers, generals, and the likenot with payments to employees of foreign
corporations that do not exercise the powers of government. This concern led Congress to define
foreign official as including any officer or employee of a foreign government or any
In full, 15 U.S.C. 78dd-2(a)(1) provides:

(a) Prohibition
It shall be unlawful for any domestic concern, other than an issuer which
is subject to section 78dd-1 of this title, or for any officer, director, employee, or
agent of such domestic concern or any stockholder thereof acting on behalf of
such domestic concern, to make use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer, payment, promise to
pay, or authorization of the payment of any money, or offer, gift, promise to give,
or authorization of the giving of anything of value to
(1) any foreign official for purposes of
(A) (i) influencing any act or decision of such foreign official in
his official capacity,
(ii) inducing such foreign official to do or omit to do any act in
violation of the lawful duty of such official, or
(iii) securing any improper advantage; or
(B) inducing such foreign official to use his influence with a
foreign government or instrumentality thereof to affect or influence any
act or decision of such government or instrumentality,
in order to assist such domestic concern in obtaining or retaining business for or
with, or directing business to, any person.
4
department, agency, or instrumentality thereof. 78dd-2(h)(2)(A).5 The two terms relevant to

this caseagency and instrumentalityare left undefined in the statute.
II.
The prosecutions allegations against Joseph Sigelman.

The United States charges Joseph Sigelman in Counts One, Two, Three, Four, and Five
with conspiracy to violate, conspiracy to transfer money with the intent to violate, and actually
violating the FCPA by agreeing in 2010 to make payments to David Duran, who the Government
claims was an Ecopetrol employee. ECF No. 28 (Indictment) 26(b), 6585, 87, 89(a). The
indictment alleges that Duran was a foreign official, as that term is used in the FCPA, id. 23,
because Ecopetrol was an agency and instrumentality of a foreign government, as those
terms are used in the FCPA, id. 22.
Ecopetrol was, however, a commercial corporation devoid of any public function. It
therefore was neither an agency nor an instrumentality of the Colombian government, and so
Duran was not a foreign official. Accordingly, the FCPA charges against Sigelman must be
dismissed.
ARGUMENT
Under Federal Rule of Criminal Procedure 12(b)(3)(B)(v), dismissal is appropriate when
an indictment fails to state an offense. An indictment fails to state an offense if the specific facts
alleged in the charging document fall beyond the scope of the relevant criminal statute, as a
5
In full, 15 U.S.C. 78dd-2(h)(2)(A) provides:

(h) Definitions
For purposes of this section: . . .
(2) (A) The term foreign official means 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.
5
matter of statutory interpretation. United States v. Panarella, 277 F.3d 678, 685 (3d Cir. 2002);
accord United States v. Delle Donna, 552 F. Supp. 2d 475, 48283 (D.N.J. 2008). Accordingly,
an indictment will not survive if it merely . . . recite[s] in general terms the essential elements
of the offense, [and] the specific facts alleged in the [indictment] fail to satisfy those elements.
Panarella, 277 F.3d at 685. For purposes of the present motion, Sigelman accept[s] as true all of
the factual allegations in the indictment. Delle Donna, 552 F. Supp. 2d at 482. But in deciding
this motion, the Court may examine the . . . [FCPA statute] as applied to the facts . . . alleged in
the Indictment [to] determine whether [Sigelmans] conduct, as charged, reflects a proper
interpretation of criminal activity under the [FCPA statute]. Id. at 483 (quotation marks and
brackets omitted).
The indictment against Sigelman fails to state an offense because, as a matter of statutory
interpretation, the facts it allegespayments to an Ecopetrol employeefall beyond the scope
of the FCPA. It must therefore be dismissed.
I.
This Court should hold a hearing to resolve issues of Colombian law.

Issues of foreign law are questions of law to be decided by the judge and not the jury.
Federal Rule of Criminal Procedure 26.1. When resolving an issue of foreign law, the judge
may consider any relevant material or sourceincluding testimonywithout regard to the
Federal Rules of Evidence. Id.; accord United States v. Peterson, 812 F.2d 486, 490 (9th Cir.
1987) (Foreign law, though formerly treated as an issue of fact, is now recognized as an issue of
law, to be established by any relevant source, including testimony.).
The functions and nature of Ecopetrol are matters of Colombian law. E.g., Colombia Law
No. 1118 of December 27, 2006, Whereby the Legal Nature of Ecopetrol S.A. Is Amended and
Other Provisions Are Issued, available at http://www.ecopetrol.com.co/english/documentos/
41462_Ley_1118_de_2006.pdf; Indictment 22 (Ecopetrol was created by national law.). To
6
assist this Court in evaluating Ecopetrol under Colombian law, Sigelman submits with this
motion the expert declaration of Carlos Gustavo Arrieta Padilla, a former Justice of the State
Council, the Colombian court of last resort for administrative and certain constitutional law
matters.6 Declaration of Carlos Gustavo Arrieta Padilla (Arrieta Declaration - Exhibit A) 5.
Rule 26.1 authorizes this Court not only to consider Judge Arrietas written opinion, but
also to hold a hearing to hear his live testimony about Colombian law. United States v. Molt, 599
F.2d 1217, 1219 (3d Cir. 1979) (approving district courts use of a hearing under Rule 26.1 to
hear expert testimony in order to resolve issues of Fijian and Papua New Guinean law). Sigelman
respectfully requests this Court to hold a hearing under Rule 26.1 to resolve any issues of
Colombian law pertaining to the nature and functions of Ecopetrol.
II.
As a matter of Colombian law, Ecopetrol did not perform any governmental

function in 2010.
A.
From 1951 to 2003, Ecopetrol performed governmental functions and

received special subsidies and privileges from the government.
A historical overview of the Colombian laws governing Ecopetrol helps explain the
companys status in 2010, when the events in this case occurred. Ecopetrol was created in 1951
by Decree 30. Arrieta Declaration 16. At this time, the Colombian government exercised
complete control over Ecopetrol. Every member of Ecopetrols board of directors was appointed
byand was an agent ofthe President of Colombia. Id. 20(i) (citing Decree 1050 of 1968,
Article 28). Colombias Minister of Mines was the chairman of the board. Id. And Ecopetrols
Colombia has four supreme courts, responsible for different matters: (1) the State
Council, for administrative and certain constitutional law matters; (2) the Supreme Court, for
civil, criminal and labor matters; (3) the Constitutional Court, for general constitutional law
matters; and (4) the Superior Council of the Judiciary, for legal professional responsibility
matters. Each is the court of last resort as to the matters that fall within its purview. Constitucin
Poltica de Colombia [C.P.] [Political Constitution of Colombia], arts. 23445 & 25457,
available at http://confinder.richmond.edu/admin/docs/colombia_const2.pdf.
7
bylaws were set by government decree. Id. 20(iii) (citing Decrees 1050 of 1968 and 062 of
1970).
Decree 30 assigned Ecopetrol a dual mandate. For over fifty years, from 1951 to 2003,
Ecopetrol was the government entity responsible for Colombias hydrocarbon resources. Id. 17.
In this role, Ecopetrol was charged with the administration and management of [Colombias] oil
fields and with supplying the oil needed to satisfy internal consumption in Colombia. Id.
19(i), (iii) (citing Decree 30 of 1951, Articles 2 & 8). To accomplish these tasks, Ecopetrol
made public policy, id. 20(ii) (citing Decree 3130 of 1968, Article 9), issued . . .
administrative acts . . . related to the administrative functions it performed, id. 20(ix) (citing
Decree 3130 of 1968, Article 31), and entered into contracts in its capacity as the administrator
of [Colombias] hydrocarbons, id. 20(iv) (citing Decree 2310 of 1974, Article 1). Ecopetrol
also collected royalties for Colombia from private companies that explored and exploited oil in
Colombia. Id. 20(v).
Besides its governmental functions, Ecopetrol also had a commercial mandate: the
exploration, exploitation, transport, refinement, distribution and exportation of oil and oil
derivatives. Id. 14. To carry out this commercial mission, Ecopetrol could partner with private
oil companies via association contracts, which are akin to joint-venture agreements. Id. 17
18. But Ecopetrol was no ordinary market participant. Colombian law bestowed special subsidies
on Ecopetrol that gave it a leg up on the competition. For example, Colombian law granted tax
exemptions to Ecopetrol. Id. 20(vi) (citing Law 165 of 1948, Article 10). And until 1974, it
exempted Ecopetrol from paying royalties to Colombia for the oil it extracted. Id. 20(v) (citing
Law 165 of 1948, Article 9).
Colombian law also imposed constraints on Ecopetrol that no private company faced.
Government approval was needed to sign certain contracts. Id. 20(vii) (citing Decree 30 of
1951, Article 5). Ecopetrol was prohibited from creating subsidiaries or affiliate companies. Id.
20(x) (citing Decree 1050 of 1968, Article 29). Wages of certain officials were set by the
President of Colombia rather than by market forces. Id. 20(i) (citing Decree 30 of 1951, Article
13). And the President could also order inspections of Ecopetrol. Id. 20(xi) (citing Decree 3130
of 1968, Article 44). This mix of special benefits and constraints limited Ecopetrols ability to
undertake the commercial activities it was supposed to perform in an efficient and competitive
manner and rendered it uncompetitive with private actors in the oil and gas markets. Id. 21.
B.
In 2003, Colombian law removed Ecopetrols governmental functions and

started treating it as an ordinary participant in the oil and gas markets.
Everything changed in 2003 with the issuance of Decree 1760. This decree eliminat[ed]
Ecopetrols administrative and regulatory functions and reassigned them to a new state entity,
the National Hydrocarbon Agency. Id. 2123, 57. No longer would Ecopetrol [f]ormulate
public policies, [i]ssue administrative acts, or engage in any other governmental function. Id.
24. In 2007, the Constitutional Court of Colombia confirmed that, as a matter of Colombian
law, Ecopetrols characteristics do not include the exercise of administrative functions. Id. 58
(quoting decision C-722-07). Thus, by 2007 it was clear that Ecopetrol had ceased to carry out
administrative functions of Colombia. Id. 59.
Decree 1760 transformed Ecopetrol into an entity focused on exclusively commercial
and entrepreneurial objectives. Id. 22. The commercial nature of Ecopetrol was reinforced by
Law 1118 of 2006, which converted Ecopetrol into a mixed economy corporation.7 Id. 25. As
Under Colombian law, a mixed economy corporation is a commercial company . . . in

which the State has a share greater than or equal to fifty percent (50%) of the capital . . . that
9
a mixed economy corporation, Ecopetrol was a company with stock that was governed by its
stockholders. Id. 25. Out went the bylaws set by government decree; in came the corporate
charter and bylaws set by the shareholders. Id. 25(i), (ii). Gone too was the Presidents ability
to order inspections of Ecopetrol. Id. 25(vi). Colombia remained the majority owner of
Ecopetrol, but its powers as a shareholder are cabined by Ecopetrols Corporate Governance
Code, which requires the decisions of shareholders to be in the corporate interest. Id. 4245.
As part of this transformation, the constraints that had impeded Ecopetrols
competitiveness were lifted. It could now use its assets and profits however it saw fit, sign
whatever contracts it pleased, and create subsidiaries and affiliates where and when it desired, all
without seeking the authorization of the Colombian government. Id. 25(v), 28, 95. Indeed, the
ability to create subsidiaries and affiliates has facilitated Ecopetrols international expansion, and
it now controls more than thirty national and international corporations. Id. 28. The
transformation into a mixed economy corporation also enabled Ecopetrol to sell up to 20% of its
shares on public stock markets. Id. 26. Since 2007, its shares have sold on the Colombian stock
exchange, the New York Stock Exchange (via American Depository Receipts (ADRs)), and the
stock exchanges of Lima and Toronto (via ADRs as well). Id. 26(iii), (iv).
Ecopetrol also became governed exclusively by rules of private law, without regard[] as
to the states contribution in the capital of the company. Id. 50 (quoting Law 1118 of 2006,
Article 6). Colombias Commercial Code, which applies to companies that do not perform
governmental functions, applies to Ecopetrol. Id. 35, 36, 97. It governs the contracts Ecopetrol
enters, in contrast to the contracts of public bodies, which contain exceptional rights [under] the
carr[ies] out . . . industrial or commercial activities in accordance with the rules of Private
Law . . . . Arrieta Declaration 31.
10
General Contract Law for the Public Administration. Id. 54. Likewise, Ecopetrols employees
are now private employees and are therefore subject to the labor code applicable to employees
of private companies. Id. 10809 (quoting Law 1118 of 2006, Article 7). And Colombian
Securities Law now requires Ecopetrol to file securities information with the National Registry
of Securities and Issuers. Id. 46(v). If it breaches its securities obligations, it will be subject to
fines by Colombias Financial Superintendence, just like any private company. Id. 47.
Colombia also removed all subsidies and prerogatives Ecopetrol had enjoyed as a
government entity pre-2003. For example:
Taxes. Colombian entities that perform governmental functions, such as ministries,
administrative departments, special administrative units without legal personality, and
superintendencies8 without legal personality are exempt from the payment of taxes, precisely
because the activities carried out by [these] public entities are administrative. Id. 89. In
contrast, Ecopetrol pays taxes [o]n equal footing as any individual or company, at the same
rates as every contributor and without any type of exemption or benefit derived . . . from the fact
that the State owns a portion of it. Id. 87. The taxes it pays include income tax, sales tax,
industry and commerce tax, land tax, fuel surcharge, vehicle tax, and other taxes imposed on
ordinary corporations. Id. 88.
Royalties. Oil companies in Colombia must pay royalties to the Colombian government.
Id. 92. Until 2003, Ecopetrol, as the administrative body in charge of Colombias oil fields,
collected these royalties. Id. 93. In 2003, the National Hydrocarbon Agency replaced Ecopetrol
Administrative departments, administrative units and superintendencies are Colombian

state agencies that oversee and regulate certain sectors (e.g., the Financial Superintendence
oversees and regulates the financial industry).
11
as the collector of these royalties. Id. 23(v). Furthermore, Ecopetrol has to pay the royalties,
just like any other oil company. Id. 92, 94.
Financial Backing. Ecopetrols debts are no longer guaranteed by the full faith and credit
of Colombia. Id. 97100. Colombia is Ecopetrols largest shareholder, but it does not back or
finance Ecopetrols operations. Id. 37(i). Under the Commercial Code and Ecopetrols
corporate charter, the Colombian government has no legal obligation to bail out Ecopetrol if it
suffers losses or insolvency. Id. 97.
Oil Exploration. Following Decree 1760, the National Hydrocarbon Agency became the
sole administrator of Colombias hydrocarbon resources. Id. 23. So now when Ecopetrol
wishes to explore and exploit new areas in Colombia, it must participate and bid along with
other domestic and foreign companies in contract bidding rounds conducted by the [National
Hydrocarbon Agency] to award hydrocarbon exploration and exploitation contracts. Id. 59.
Ecopetrol has no special priority in these auctions. Indeed, it often loses out to competitors. E.g.,
Heather Walsh, Shell, Repsol Win Oil Blocks at Colombian Auction, Bloomberg News (Oct. 17,
2012) (Shell outbid companies including Ecopetrol . . . to garner an exploratory block in the
Caribbean off Colombias northern coast.), available at http://www.businessweek.com/
news/2012-10-17/colombia-lures-exxon-and-shell-to-auction-with-shale-oil.
In sum, by 2010, Ecopetrol had become a participant in the Colombian hydrocarbon
market, with the same conditions [as] any other company (foreign or domestic). Id. 61. Since
its founding until 2003, Ecopetrol (i) carried out the public function of administering the
national hydrocarbon resources; and (ii) carried out the industrial and commercial activity of
exploring and exploiting hydrocarbon resources. Id. 29(i). But in 2003, Ecopetrol lost its
public mandate, and since then it has exclusively dedicated itself to carrying out . . . oil related
12
industrial and commercial activities with the purpose of producing profits and dividends for its
shareholders. Id. 29(ii). In carrying out this mission, Ecopetrol operates under the same
conditions [as] the private oil companies. Id.
C.
The minimal allegations in the indictment about governmental functions

Ecopetrol supposedly performs are incorrect as a matter of Colombian law.
Tellingly, the indictment is silent about almost all of these points. Here is the entirety of
what the United States alleges about the nature and functions of Ecopetrol:
Ecopetrol was the state-owned and state-controlled petroleum company in
Colombia and an agency and instrumentality of a foreign government . . . .
Ecopetrol was created by national law, and it was required by law that Colombia
control, at a minimum, eighty percent of the shares in circulation, with voting
rights. During the relevant time period, Colombia controlled approximately 89.9%
of Ecopetrols outstanding capital stock, and held the right to elect the majority of
the members of the companys Board of Directors. Ecopetrols Board of Directors
included the Minister of Mines and Energy, the Minister of Finance, and the
Director of the National Planning Agency of Colombia. Ecopetrol was responsible
for approving contracts to drill or perform services on oil fields in Colombia,
including the Mansarovar Contract for which PetroTiger was seeking approval.
Indictment 22. The indictment emphasizes that Colombia was the majority owner of Ecopetrol
and had the right to elect the majority of the board of directors. That is truethough, since 2007
the majority of the board has been independent, with five independent members and only three
representatives of Colombia. Arrieta Declaration 46(ii). In any event all of these points concern
Colombias ownership of Ecopetrol, but say nothing as to Ecopetrols functions.
As explained in Section III.A below, irrespective of the governments ownership, a
company must perform a governmental function to be covered by the FCPA. The indictment
spends only a single sentence on Ecopetrols purported governmental function: Ecopetrol, it
claims, was responsible for approving contracts to drill or perform services on oil fields in
Colombia, including the Mansarovar Contract for which PetroTiger was seeking approval.
Indictment 22.
13
As a matter of Colombian law, this is inaccurate. Ecopetrol has no governmental

authority whatsoever over oil and gas contracts in Colombia. Specifically, it does not have the
mandate to approve oil contracts in Colombia. Arrieta Declaration 60. Whatever governmental
authority Ecopetrol may have once had to regulate the oil industry in Colombia was assigned to
the National Hydrocarbon Agency in 2003. See Section II.B, above.
It is true that Ecopetrol had to sign off on Mansarovar Energy Colombia Ltd.s
(Mansarovar) specific decision to award a particular contract to PetroTigerbut that was not
because Ecopetrol was performing a governmental duty. The only reason Ecopetrols approval
was necessary was because it had a private contractual rightnot a public responsibilityto
approve this Mansarovar-PetroTiger contract. Ecopetrol had entered into an association
contracti.e., a private joint venturewith Mansarovar, through which Ecopetrol gained the
contractual right to sign off on the decision of its partner to contract with PetroTiger. See Nare
Joint Venture Contract (Exhibits B2 (English) & B3 (Spanish)); cf. Arrieta Declaration 60
(Ecopetrol . . . decides whether to sign-off on some of the decisions taken by its joint venture
partners pursuant to the private contractual rights it has under the association contracts with these
partners.). It is normal for private parties entering into a business partnership to establish in a
contract that one partner must obtain approval from the other partner before undertaking certain
transactions that affect the partnership. E.g., Jefferson Parish Hospital District No. 2 v. Hyde,
466 U.S. 2, 6 (1984). Ecopetrols right to approve Mansarovars contract with PetroTiger is a
private contractual right of this ilk.
Thus, the indictment lacks any valid allegation that Ecopetrol performed a governmental
function. The allegation that Ecopetrol had to approve Colombian oil contracts, including the
Mansarovar contract, is incorrect as a matter of Colombian law. And the indictment does not
14
and cannotsuggest that Ecopetrol performs any other public function. The Government alleges
nothing more than that the payments made to Duran may have affected one private partys
(Ecopetrols) exercise of its private contractual rights against its joint-venture partner
(Mansarovar). Such actions, if they occurred, may be addressed by Colombian civil courts, but
they are not outlawed by the FCPA.
III.
Duran was not a foreign official under the FCPA in 2010 because Ecopetrol was
neither an instrumentality nor an agency of Colombia.
A.
An entity must perform a governmental function to be an instrumentality.
The FCPA does not define instrumentality. But there is no dispute that, at a minimum,
an entity must perform a governmental function to qualify as an instrumentality under the FCPA.
The United States previously conceded this point when it argued to the Eleventh Circuit in
United States v. Esquenazi that a district court was correct in stating that an instrumentality
must perform a governmental function. Brief for the United States, United States v. Esquenazi,
No. 11-15331-C, at 19 (11th Cir. Aug. 21, 2012), available at http://www.scribd.com/doc/
103498319/U-S-v-Esquenazi-11th-Cir-Appeal-DOJ-Brief; accord United States v. Esquenazi,
752 F.3d 912, 921 (11th Cir. 2014) (the parties . . . agree an instrumentality must perform a
government function at the governments behest). The Eleventh Circuitthe only appellate
court that has ever considered the meaning of instrumentality in the FCPAheld in harmony
with the parties that an instrumentality must be doing the business of the government.
Esquenazi, 752 F.3d at 922.
This government-function requirement follows from the statutory text. In the FCPA,
instrumentality is the third word in a three-word list of terms: a foreign official is an
employee of any department, agency, or instrumentality of a foreign government. 15 U.S.C.
78dd-2(h)(2)(A). Its two companion termsdepartment and agencyconnote entities that
15
carry out governmental functions. Esquenazi, 752 F.3d at 92122. Venerable canons of statutory
interpretation (such as noscitur a sociis) dictate that the meaning of the first two terms in a threeword list influence the meaning of the final term. Id. Thus, in the FCPA context,
instrumentalitylike department and agencyrefers only to an entity that performs a
governmental function. Id.
A consequence of this requirement is that a foreign company owned by a foreign
government but devoid of any governmental function is, as a matter of law, not an
instrumentality under the FCPA. State ownership of a company may be a necessary condition
for an entity to be an instrumentality, but it is an insufficient condition. A public function is
required too. As the United States put it in its brief to the Eleventh Circuit: the district court
correctly instructed the jury that an entity must perform a function of the foreign government
and that state ownership of the entity, by itself, is not sufficient. Brief for the United States,
Esquenazi, No. 11-15331-C, at 47.
If this Court has any doubts that an instrumentality must perform a governmental
function, then the rule of lenity requires ruling in favor of Sigelman. When there are two
rational readings of a criminal statute, one harsher than the other, we are to choose the harsher
only when Congress has spoken in clear and definite language. Scheidler v. NOW, Inc., 537 U.S.
393, 409 (2003); accord United States v. Bass, 404 U.S. 336, 34748 (1971) (ambiguity
concerning the ambit of criminal statutes should be resolved in favor of lenity.). Sigelmans
readingwhich follows Esquenazi and the United States brief to the Eleventh Circuit in
Esquenaziis undisputedly rational. Thus, even if this Court is not fully persuaded by the
Eleventh Circuit and the U.S. Department of Justice that performing a government function is a
nonnegotiable element of being an instrumentality, lenity requires adopting this view.
16
B.
Ecopetrol did not perform a governmental function in 2010, so it was not an

instrumentality of Colombia.
The best way to determine whether a foreign entity performs a governmental function is
to determine whether the foreign government treats the function the foreign entity performs as
its own. Esquenazi, 752 F.3d at 925. As Section II explained, Colombian law is clear that
Ecopetrol did not perform a governmental function in 2010. To recap, the Colombian
government intentionally removed all of Ecopetrols public functions in 2003 to boost the
companys competitiveness, and it reassigned those responsibilities to a separate new agency, the
National Hydrocarbon Agency. Arrieta Declaration 2124. In 2007, the Constitutional Court
of Colombia confirmed that Ecopetrols characteristics do not include the exercise of
administrative functions. Id. 58. Unlike Colombian entities that perform public functions,
Ecopetrol pays taxes and royalties, is subject to private law, and receives no financial support or
backing from the Colombian government. Id. 50, 87, 92, 97100. As a matter of Colombian
law, Ecopetrol is simply an ordinary participant in the oil and gas market that does not perform
any governmental functions. Therefore, as a matter of U.S. federal law, Ecopetrol is not an
instrumentality under the FCPA. Esquenazi, 752 F.3d at 925.
This conclusion is confirmed by the Organization for Economic Cooperation and
Developments Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions (OECD Convention), Dec. 17, 1997, S. Treaty Doc. No. 105-43, 37
I.L.M. 1 (ratified Dec. 8, 1998, entered into force Feb. 15, 1999). Federal courts have held that
the OECD Convention informs the meaning of the FCPA. Esquenazi, 752 F.3d at 92325; United
States v. Kay, 359 F.3d 738, 754 (5th Cir. 2004). The OECD Convention defines foreign public
official as any person exercising a public function for a foreign country. Art. 1.4(a). An
accompanying comment explains that an individual does not perform a public functionand
17
thus is not a foreign officialwhen his employer operates on a normal commercial basis in the
relevant market, i.e., on a basis which is substantially equivalent to that of a private enterprise,
without preferential subsidies or other privileges. Art. 1.4(a), cmt. 15. That is an exact
description of Ecopetrol. It does not receive any subsidies, aid, or any other incentive from the
Colombian government. Arrieta Declaration 101. Ecopetrol is simply one more participant in
the Colombian hydrocarbon market, the same as Chevron, ExxonMobil, Royal Dutch Shell, or
any other company (foreign or domestic). Id. 61. Just as Ecopetrol does not perform a
public function for purposes of the OECD Convention, so it does not perform a public function
for purposes of the FCPA. It is therefore not an instrumentality of Colombia.
C.
For the same reasons, Ecopetrol was not an agency of Colombia in 2010.
The FCPA also does not define agency. But an agency of a foreign government, like
an instrumentality, is an entity through which the government performs its functions.
Esquenazi, 752 F.3d at 922. Thus, for the same reasons Ecopetrol was not an instrumentality of
Colombia in 2010namely, that it did not perform any governmental functions thenit was
also not an agency of Colombia within the meaning of the FCPA. See Section III.B.
IV.
As applied to Sigelmans alleged conduct, the FCPAs definition of instrumentality

is unconstitutionally vague.
A second reason to dismiss the FCPA charges against Sigelman is that the statute is void
for vagueness as applied to his conduct in this case. Due process requires that a penal statute not
be applied when it fails either of two tests for vagueness. A statute is unconstitutionally vague
either (1) when it fail[s] to provide the kind of notice that will enable ordinary people to
understand what conduct it prohibits, or (2) when its application may authorize and even
encourage arbitrary and discriminatory enforcement. City of Chicago v. Morales, 527 U.S. 41,
56 (1999). As applied to Sigelman, the FCPA fails both tests.
18
A.
Section 78dd-2(a) fails to give fair notice of what conduct it prohibits.
[T]he purpose of the fair notice requirement is to enable the ordinary citizen to conform
his or her conduct to the law, which means [n]o one may be required at peril of life, liberty or
property to speculate as to the meaning of penal statutes. Morales, 527 U.S. at 58 (quoting
Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939)). Due process requires that statutes define . . .
criminal offense[s] . . . with sufficient definiteness that ordinary people can understand what
conduct is prohibited. Skilling v. United States, 561 U.S. 358, 402 (2010) (emphasis added). As
applied in this case, the FCPA fails the constitutional fair notice requirement because Sigelman
lacked notice that the statute fairly encompasses a company like Ecopetrola company that, as a
matter of law of the country of its incorporation, does not perform any governmental function.
The FCPA prohibits corrupt payments to foreign officials, which it defines to
encompass any officer or employee of a foreign government or any . . . instrumentality thereof.
15 U.S.C. 78dd-2(h)(2)(A). No ordinary person, including Sigelman, can understand where this
statutes reach ends, because no ordinary person can understand with any certainty whether
instrumentality fairly encompasses Ecopetrol. Unadorned, the word eludes a definite commonsense meaning or definition.9 Normally Congress avoids the inherent vagueness of the word
instrumentality by supplying a statutory definition. E.g., 12 U.S.C. 5213; 18 U.S.C. 1839;
22 U.S.C. 6023(5)(B); 28 U.S.C. 1603(b); 42 U.S.C. 12209(4) (all defining the term
instrumentality for different statutes). But Congress offered no statutory definition here, and
thus there is nothing to give Sigelman fair notice that Ecopetrol, a corporation that engages only
in commercial endeavors, is encompassed in the meaning of instrumentality.
9
Standard dictionary definitions offer minimal guidance. Cf. Merriam-Webster.com

(accessed October 29, 2014), http://www.merriam-webster.com/dictionary/instrumentality
(defining instrumentality as the quality or state of being instrumental, or as means;
agency).
19
The range of definitions Congress has attached to the word instrumentality in other
statutes illustrates the words inherent plasticity and ambiguity. Sometimes Congress uses
instrumentality narrowly to refer to a set of local governments, such as counties and cities,
12 U.S.C. 5213, or to entities fulfilling direct support roles for Congress, such as [t]he
Government Accountability Office, the Government Printing Office, and the Library of
Congress, 42 U.S.C. 12209(4). Other times it assigns instrumentality a broad meaning. E.g.,
18 U.S.C. 1839 (for purposes of the Economic Espionage Act, foreign instrumentality means
any agency, bureau, ministry, component, institution, association, or any legal, commercial, or
business organization, corporation, firm, or entity that is substantially owned, controlled,
sponsored, commanded, managed, or dominated by a foreign government). When faced with
the undefined use of instrumentality in the Religious Freedom Restoration Act (RFRA),10 the
Ninth Circuit held that the use of the word instrumentality in a general, inclusionary definition
does not indicate an intention to encompass entities which are not a part of the government.
Hall v. Am. Natl Red Cross, 86 F.3d 919, 921 (9th Cir. 1996). [E]ven though [entities like the
American Red Cross] may be governmental instrumentalities in some sense, the Red Cross did
not constitute a RFRA instrumentality. Id. Ex ante, Sigelman could not know where on this
spectrum of meanings the particular undefined use of instrumentality in the FCPA falls, and
thus he had no fair notice of whether payments to employees of corporations like Ecopetrol are
covered.
Federal courts recent struggles to interpret the term further highlight the fact that
Sigelman had no fair notice that instrumentality could include Ecopetrol. Most telling, is the
10
At the time, RFRAs definition of government included any branch, department,

agency, instrumentality, and official (or other person acting under color of law) of the United
States, a State, or subdivision of a state. Pub. L. No. 103-141, 107 Stat. 1488 (Nov. 16, 1993).
20
Eleventh Circuits frank acknowledgement that what constitutes an instrumentality under the
FCPA changes over time and varies from nation to nation. Esquenazi, 752 F.3d at 924. The
Supreme Court has warned that to provide the fair notice due process requires, a criminal offense
must be defined with sufficient definiteness that ordinary people can understand what conduct is
prohibited. Skilling, 561 U.S. at 402. A criminal element that expands and contracts like an
accordion depending on the time and place in which it is applied not only lacks sufficient
definiteness, it fails to provide any definiteness at all. There was therefore no way for
Sigelman to discern whether Ecopetrol fairly falls within the FCPAs terms.
When an element of a criminal statute is as elastic as the FCPAs usage of
instrumentality, courts will inevitably reach conflicting and contradictory holdings. See
Samantha Dreilinger, Esquenazi in Korea: Identifying Instrumentalities Abroad, Law360 (Sept.
12, 2014) (exploring the uncertain scenarios resulting when entities exhibit some Esquenazi
factors, but not others).11 To avoid this risk, this Court should decline to apply the statute until
Congress adequately specifies its terms. Otherwise, Sigelman will face a notice problem akin to
that underlying the prohibition against ex post facto laws: Sigelmans conduct will be judged
against a statute whose scope apparently changes every minute.
Because the FCPA fails to give definite content to the word instrumentality, the statute
has no clear outer bound. The statute fails to clearly distinguish lawful conduct from proscribed
conduct, and it therefore offers Sigelman insufficient notice that the actions he is alleged to have
taken in this case would expose him to prosecution. Due process requires more.
11
Available at http://www.law360.com/articles/576519/esquenazi-in-korea-identifyinginstrumentalities-abroad.
21
B.
The FCPA provision under which Sigelman is charged encourages arbitrary

and discriminatory enforcement.
Similarly, statutes afford[ing] too much discretion to law enforcement and

encourag[ing] arbitrary and discriminatory enforcement must not be applied to Sigelman.
Morales, 527 U.S. at 58, 64. The FCPA provisions, as applied by the government in this case,
present such dangers.
The United States can only prove its charges if Ecopetrol is an instrumentality, yet no
statutory definition of that term exists to guide its enforcement decisions. Although, as noted
above, Congress defined instrumentality in other statutes, it declined to incorporate any
definition into the FCPA. Congress knows how to incorporate definitions from other statutes
when it intends to. Indeed, the statute governing relations with Cuba specifically incorporates by
cross-reference the Foreign Sovereign Immunities Acts definition of instrumentality. 22 U.S.C.
6023(5)(B) (For purposes of [preceding provision], the term agency or instrumentality of the
Government of Cuba means an agency or instrumentality of a foreign state as defined in section
1603(b) of Title 28 . . . .). That Congress has placed no such cross-reference in the FCPA
indicates it did not intend to incorporate any definition from other statutes. The Department of
Justice is therefore left without legislative guidance to rely on when assessing whether Ecopetrol
is an instrumentality. Because the statute does not provide sufficiently specific limits on the
enforcement discretion of the police, it is unconstitutionally vague and must not be applied to
Sigelman. Morales, 527 U.S. at 64.
Though courts have worked diligently to interpret instrumentality, the various
balancing tests their efforts have produced increase the risk that the governments enforcement of
the FCPA against Sigelman is arbitrary. For example, the Esquenazi court provided a merely . . .
helpful, non-exhaustive list of factors to consider when trying to discern whether any given
22
entity is an instrumentality. 752 F.3d at 928 n.9. There is no reasonable way for Sigelman to
know whether, to take but one of the factors, the public and government of [Colombia]
generally perceive [Ecopetrol] to be performing a governmental function. Id. at 926. Nor could
Sigelman identify and understand the meaning of whatever other as-yet unnamed factors may be
added to the non-exhaustive list a court might use to decide whether Ecopetrol is an
instrumentality. Id. In particular, Sigelman must not be expected to have speculated in 2010 as to
how the Department of Justice viewed the Colombian publics perception of Ecopetrol. See
United States v. Lanier, 520 U.S. 259, 26667 (1997). Like the ordinance invalidated in Morales,
which fail[ed] to provide police with any standard by which they can judge whether an
individual has an apparent purpose, Morales, 527 U.S. 41, 66 (OConnor, J., concurring in
part and concurring in the judgment), the FCPAs lack of clarity regarding the meaning of
instrumentality leaves law enforcement to its own devices to decide whether Ecopetrol counts.
Sigelman should [not] have to ponder the totality of the circumstances in order to determine
whether his conduct is a felony. Bond v. United States, 134 S. Ct. 2077, 2097 (2014) (Scalia, J.,
concurring in the judgment). Yet this is what the vague statute impermissibly asks of him.
C.
Courts cannot supply definitions where Congress did not.
Separation of powers requires that the defining of penal laws be left to the legislature.
U.S. Const. art. 1, 1. [F]ederal courts interpret, rather than author, the federal criminal code,
[and] are not at liberty to rewrite it. United States v. Oakland Cannabis Buyers Coop., 532 U.S.
483, 495 (2001); accord Boulware v. United States, 552 U.S. 421, 434 (2008) ([t]he spirit of the
doctrine which denies to the federal judiciary power to create crimes forthrightly admonishes
that [courts] should not enlarge the reach of enacted crimes by supplying words not used in the
statute) (internal quotations omitted)). Where, as here, penal legislation is vague as applied,
courts must not cross the boundary between the judicial and legislative functions by supplying
23
their own definitions. Instead, courts must acknowledge the defects in such laws and leave it to
Congress to fix them. Boulware, 552 U.S. at 434 (If [statutes] could stand amending, Congress
will have to do the rewriting.).
CONCLUSION
Because Duran, an employee of a corporation devoid of any public function, was not a
foreign official, or, alternatively, because the FCPA is vague as applied to Sigelman, this Court
should dismiss all of the FCPA charges against Sigelman, namely Counts Two, Three, and Four,
as well as the portions of Counts One and Five that charge Sigelman with conspiracy to violate,
and with conspiracy to transfer money with the intent to violate, the FCPA. Sigelman further
requests that this Court hold a hearing on issues of Colombian law pursuant to Federal Rule of
Criminal Procedure 26.1.
24
Respectfully submitted,

FOX ROTHSCHILD LLP
Tel: (215) 299-2825
Fax: (215) 299-2150
/s/ William Burck
Ben ONeil, Esquire
SULLIVAN, LLP
777 6th Street NW
11th Floor
Tel: (202) 538-8000
Fax: (202) 538-8100
Counsel for Defendant Joseph Sigelman
25

v.
Case No. 14-00263-1 (JEI)
JOSEPH SIGELMAN
CERTIFICATE OF SERVICE
I hereby certify that on October 29, 2014, the foregoing Defendants Motion to Dismiss
FCPA Charges and Request for Hearing On Issues of Foreign Law, memorandum in support, and
all other supporting documents were filed electronically with the Case Management/Electronic
Case Filing System (CM/ECF) for the Federal Judiciary. Notice of this filing will be sent to
all parties by operation of the CM/ECF system, and the parties to this action may access this
filing through CM/ECF.

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Case 1:14-cr-00263-JEI Document 112 Filed 10/29/14 Page 1 of 38 PageID: 1117

UNITED STATES DISTRICT COURT

Case No. 14-00263-1 (JEI)

AND NOW, this __________ day of ____________________, 2014, after consideration

Case 1:14-cr-00263-JEI Document 112 Filed 10/29/14 Page 2 of 38 PageID: 1118

UNITED STATES DISTRICT COURT

Case No. 14-00263-1 (JEI)

AND NOW, this __________ day of ____________________, 2014, after consideration

Case 1:14-cr-00263-JEI Document 112 Filed 10/29/14 Page 3 of 38 PageID: 1119

UNITED STATES DISTRICT COURT

Case No. 14-00263-1 (JEI)

NOTICE OF DEFENDANTS MOTION TO DISMISS FCPA

Daniel S. Kahn, Esquire

Zach Intrater, Esquire

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Patrick J. Egan, Esquire

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UNITED STATES DISTRICT COURT

Case No. 14-00263-1 (JEI)

DEFENDANTS MOTION TO DISMISS FCPA CHARGES AND

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Patrick J. Egan, Esquire

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UNITED STATES DISTRICT COURT

Case No. 14-00263-1 (JEI)

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The Foreign Corrupt Practices Act ..........................................................................3

The prosecutions allegations against Joseph Sigelman. .........................................5

This Court should hold a hearing to resolve issues of Colombian law....................6

As a matter of Colombian law, Ecopetrol did not perform any

From 1951 to 2003, Ecopetrol performed governmental functions

In 2003, Colombian law removed Ecopetrols governmental

The minimal allegations in the indictment about governmental

An entity must perform a governmental function to be an

Ecopetrol did not perform a governmental function in 2010, so it

For the same reasons, Ecopetrol was not an agency of Colombia

As applied to Sigelmans alleged conduct, the FCPAs definition of

Section 78dd-2(a) fails to give fair notice of what conduct it

The FCPA provision under which Sigelman is charged encourages

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Courts cannot supply definitions where Congress did not. .......................23

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Bond v. United States,

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Statutes and U.S. Constitutional Provisions

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Heather Walsh, Shell, Repsol Win Oil Blocks at Colombian Auction,

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is to penalize and discourage corruption of government officialsto prosecute payments made to

The Foreign Corrupt Practices Act

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In full, 15 U.S.C. 78dd-2(a)(1) provides:

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department, agency, or instrumentality thereof. 78dd-2(h)(2)(A).5 The two terms relevant to

The prosecutions allegations against Joseph Sigelman.

In full, 15 U.S.C. 78dd-2(h)(2)(A) provides:

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This Court should hold a hearing to resolve issues of Colombian law.

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As a matter of Colombian law, Ecopetrol did not perform any governmental

From 1951 to 2003, Ecopetrol performed governmental functions and

AND NOW, this day of __________, 2014, after consideration

AND NOW, this day of __________, 2014, after consideration