by Wan Ahmad Fayhsal
Last week the world most
beautiful game rear its ugly head. Top officials of FIFA, the international
governing body of football were marred by allegations of high-level
corruptions. Seven senior FIFA officials were arrested in Switzerland on
corruption charges and facing extradition that were brought by the United
States Department of Justice (DOJ).
Although this news brought
cheers to many football fans across the world and many football officials and
illustrious former players lauded the US government for finally dare to
challenge the long-running corrupted cultures within FIFA, from legal and most
importantly geopolitical perspective this warrants some serious questions: why
were the indictments were made by US DOJ – a country which everyone knows not a
football (soccer as they called it) powerhouse?
Most importantly, what was
the legal basis for US DOJ to issue the 47-count indictment and extradition
against FIFA officials who are mostly non-US citizens that are not subject to
any jurisdictions under the US federal law?
It could be made possible
only via chapter 96 of Title 18 of the US Code - a criminal and penal code
under the federal law of the US or best known as the RICO Act.
What is RICO?
The RICO (Racketeer
Influenced and Corrupt Organizations) Act is federal law that confers wide
powers to prosecute organized crime on the grounds of financial malfeasance. It
was widely use in the 70s to curtail mafia racketeering, which consists of multiple
crimes such as money laundering, bribes, extortion, wire fraud and many others.
Before RICO existed, the
authorities were having hard time to pin down the mafia en bloc as their criminal acts were slyly covered and fronted by
legal businesses and operated through various individuals that seemed to hold
no connection among one another.
To combat this menace, the US Congress passed RICO and it was an effective
piece of legislation to curb organized crime that runs like an enterprise. RICO’s
applicability hinges not only on the proven existence of an enterprise – be it
association of individuals or corporations but also the defendant must
possessed a ‘scheme’ and ‘predicate acts’.
A scheme provides the liability and basis for the indictment on racketeering
pattern for the predicate acts – a set of criminal activities listed under the
US federal statutes such as wire fraud and money laundering – that are committed by members of the
enterprise.
In short RICO acts as a
dragnet to prosecute individuals from the same or affiliated to the enterprise
in which they acted or complicit in the systematic corruption or racketeering that
occurred within purview of the indicted organization.
For the establishment of
defendant’s ‘racketeering activity’, it must be proven that they have committed
‘at least two’ of 35 specified criminals acts covered under RICO within a 10
year period of each other that are connected to the affairs of the enterprise.
How
RICO works against FIFA
Why would DOJ charged FIFA under RICO,
which automatically means DOJ views FIFA as a form of mafia group? Perhaps DOJ
realized the corruptions in FIFA are rife and endemic hence it will be easier to
pursue the corrupted ‘enterprise’ that exhibits racketeering pattern.
On surface there’s nothing shocking
about RICO if it is applied within the US territories but the indictment unto
FIFA begets the real question: does RICO have the juridical capacity to be
applied outside US or in legal term – ‘extraterritoriality’ – as it was
originally enacted under the US federal statute and not part of international
law?
US Supreme Court has ruled out RICO’s
extraterritoriality in Morrison v.
National Australia Bank (2010) but last year the US Court of Appeals for
the Second Circuit in European Community
v. RJR Nabisco, Inc. (2014) held RICO can be applied extraterritorially if
the specific crime under the predicate acts of RICO can be applied
extraterritorially. For example if a US citizen was killed abroad, the prosecutor
could indict and extradite the defendant to be trial in the US. So any
predicate acts that have legal basis for extraterritoriality (like the killing
of US citizen) could empower RICO to go global.
US DOJ found out that within the
47-count indictment against FIFA, the predicate acts such as wire fraud, money
laundering, bribes and illicit payments were allegedly took place in the US or
filtered through US bank accounts – which gave them the jurisdiction to pursue
penalties against FIFA’s officials on federal racketeering charges.
When the whole world
rejoiced on the indictment, Russian Premier Vladimir Putin rebuked Washington.
Mainstream media tried to frame Putin’s disapproval as a sign of Russia’s
covering of their alleged corrupted practices for winning the bid to host the
2018 FIFA World Cup.
The media failed to
capture the real message of Putin on questioning the validity of RICO’s extraterritoriality
that could set a dangerous precedent for the US federal law to go places where
it originally holds no jurisdiction and sovereignty.
Hidden
Informer
The indictment by DOJ would not be
possible, as many believe, without an insider who could reveal the corruption
trails. The man who many suspected was Chuck Blazer, former FIFA top officials
from the US who himself was indicted in 2014 on corruption and tax evasion
charges.
Blazer agreed to co-operate with the prosecutors to
turn against his former colleagues in FIFA and CONCACAF – the North America and
Caribbean football governing body as part of his plea-bargaining for lenient
sentences.
RICO possible application to 1MDB
What are the potential
exposures for 1MDB to be indicted under RICO if the prosecutors managed to
establish a racketeering pattern of predicate acts within an enterprise called
1MDB?
At very fundamental level,
1MDB transactions and wire transfers
would have been made in US Dollar through the SWIFT international payment system. This factor alone would made 1MDB susceptible
to be investigated and indicted under RICO as the predicate acts (e.g. wire
fraud) fall under the US federal criminal law and the RICO Act.
Secondly 1MDB’s investment that was first parked in
Cayman Island and then claimed to be repatriated to BSI Bank in Singapore could
be another potential exposure to RICO. Latest FIFA indictment under RICO named
two offshore banks in Cayman that got involved in the wire transfer of the
bribe money.
BSI Singapore holds more surprise as its parent
company, BSI SA Lugano of Switzerland was the first bank to reach resolution under
DOJ’s Swiss Bank Program' – a program to resolve criminal liabilities in the US.
This literally means that DOJ has access to suspicious accounts of BSI’s
clients – including 1MDB.
Third and most controversial circumstantial evidence
that could blow the money trail involves controversial figures that are deemed
indirectly connected to 1MDB in which their acts could be indicted under the
predicate acts of RICO. As reported by Louise Story and Stephanie Saul of The New York Times, a young wealthy
Malaysian by the name of Jho Low who broke into the scene of rich and famous by
purchasing record-breaking million dollars worth of painting (Basquiat’s Dusthead) and an opaque condo purchased
using limited liability shell company – a typical setup in performing money
laundering activities.
What made him more suspicious was he is also a close
friend to Riza Aziz who is a stepson to Prime Minister Dato’ Seri Najib’s – the
chairman of Board of Advisor to 1MDB and the Finance Minister who are in charge
of overseeing 1MDB as an entity under the MOF Inc.
Jho Low vis-à-vis 1MDB was also mentioned in the United
Kingdom court case McKillen v Misland (Cyprus) Investments Ltd and others (2012) pertaining to legal dispute
involving Low’s The Wynton Group failed bid of Claridge’s Hotel Group in
London. In the full written judgment, Judge David Richards clearly mentioned that
the bid by The Wynton Group was backed up and fully underwritten by 1MDB.
There are many more
examples to implicate 1MDB under RICO but from the samples above we can
sufficiently deduced that 1MDB has high-risk exposure and liable to be indicted
under RICO. Perhaps it would not unfold in a straightforward manner and require
an informer like Chuck Blazer of FIFA to expose the whole racketeering.
The question is does 1MDB
possessed a figure like Chuck Blazer who could turn against 1MDB? High chance
they do and we all know who.
This article was originally published by The Malaysian Reserve on 8th June 2015.
Tiada ulasan:
Catat Komen