Canadian prosecutors secure two more convictions in foreign corruption case
Two convictions recently handed down by the Ontario Superior Court of Justice account for two of only three convictions secured by prosecutors in contested trials under Canada’s Corruption of Foreign Public Officials Act (the “CFPOA” or the “Act”) in the past decade. In R v Barra and Govindia, 2018 ONSC 57, released on January 11, 2019, two individuals, Robert Barra and Shailesh Govindia, were convicted of agreeing to bribe a foreign public official, contrary to the CFPOA. On March 7, 2019, the two were sentenced, each receiving a 30-month prison sentence. Given the limited jurisprudence interpreting the CFPOA, Justice Smith’s decision in Barra provides some welcome analysis of issues under the Act. Of particular note are Justice Smith’s discussion of the intent requirements of CFPOA bribery offences and his discussion of continuing conspiracies under the Act.
Barra arose out of the same facts as the 2013 case R v Karigar, in which Nazir Karigar was convicted for conspiring to pay bribes to Air India officials and the Indian Minister of Civil Aviation to secure a major contract for Cryptometrics Canada to supply facial recognition software. Justice Smith found that Barra was the controlling mind of Cryptometrics US and its subsidiary Cryptometrics Canada. Govindia acted as an agent in India for Cryptometrics Canada after Karigar, the company’s previous agent, withdrew his services. Both Barra and Govindia were charged with multiple violations of s. 3(1) of the CFPOA, which prohibits paying or agreeing to pay bribes to foreign public officials. The Crown alleged that Barra and Govindia breached s. 3(1) by agreeing to pay the bribes. In the result, Justice Smith convicted the defendants on the charges relating to the Indian Minister, but acquitted them on the charges relating to the Air India employees.
Accused must know the target of bribes is a “foreign public official”
Justice Smith acquitted the defendants on the charges relating to the Air India employees because he found that the defendants lacked the requisite intent or knowledge. First, Justice Smith found that the bribery offence under s. 3(1) of the CFPOA is a “specific intent” offence requiring proof that an accused engaged in misconduct for a particular purpose. Next, Justice Smith found, relying on Rex v Smith, a 1921 decision of the Ontario Court of Appeal pertaining to the Criminal Code offence of bribing a peace officer, that to convict under s. 3(1), the Crown must show that the accused knew that the individual they bribed or agreed to bribe was in fact a “foreign public official”.
On the facts before him, Justice Smith was unable to find that the defendants knew that the Air India employees were “foreign public officials”. Interestingly, Justice Smith’s decision turned on his finding that the defendants believed Air India was a “Crown Corporation” when in fact it was “owned directly by the Indian government”. Implicit in Justice Smith’s finding is the suggestion that not all employees of all Crown corporations will be considered “foreign public officials” for the purposes of the CFPOA.
Continuous conspiracy turns on a consistent pursuit of the same objective
In convicting Govindia on the charges relating to the Indian Minister, Justice Smith provided some guidance on what constitutes a “continuing conspiracy” to pay bribes under the CFPOA. In his defence, Govindia asserted that because he only became involved in the scheme after another agent (Karigar) withdrew his services, and after certain agreements to pay bribes had already been made, he could not be said to have been part of a single continuing conspiracy with Barra and others as alleged by the Crown. Justice Smith disagreed. Relying on commentary from cases decided under the Criminal Code, Justice Smith found that Govindia’s knowledge of previous agreements to pay bribes was irrelevant to the consideration of whether he partook in a continuing conspiracy. Rather, Justice Smith found that “so long as the same object of the conspiracy continued to be pursued… then the conspiracy continued to exist”.
Sentences commensurate with similar cases
Both Barra and Govindia received 30-month prison sentences for their violations of the CFPOA. These sentences are commensurate with sentences handed down in other recent foreign and domestic anticorruption cases. In the related case R v Karigar, the accused received a three-year prison sentence. In the recent anticorruption case pertaining to the McGill University Health Centre project, Yanai Elbaz, former senior manager of the Health Centre, also received a three-year prison sentence.
In 2013, amendments to the CFPOA came into effect which raised the maximum penalty for bribery under the CFPOA from five years to 14 years. This amendment was seen as a signal of the legislature’s intent to more aggressively police and sanction foreign corrupt practices. In his sentencing decision, Justice Smith noted that when Barra and Govindia committed their offences the maximum penalty was still five years. However, the judge did cite the increased maximum penalty in finding that bribery under the CFPOA is a “serious crime”. It will be interesting to see the extent to which courts rely on pre-amendment sentencing decisions like Karigar’s, Barra’s and Govindia’s in future CFPOA bribery cases involving conduct occurring post-amendment.
Canada has been and continues to be the subject of international criticism for its perceived leniency in enforcing foreign corrupt practices. The fact that the Crown has secured only three CFPOA convictions in contested trials in over a decade indicates that Canada still has far to go before it can shed its reputation in the foreign enforcement context (but see our discussion of the prevalence in many jurisdictions of non-trial resolutions in transnational corruption cases here). Though Justice Smith’s analysis of the CFPOA bribery provisions provides some welcome clarity on certain issues, his narrow interpretation of the term “foreign corrupt officials” may create novel difficulties for prosecutors aiming to improve Canada’s enforcement track record. Nonetheless, Barra serves as a reminder that the consequences of violating the CFPOA are severe.
Osler will continue to monitor developments in the enforcement of foreign corrupt practices.