American prosecutors as democracy promoters: prosecuting corrupt foreign officials in U.S. courts.

• Author: Spence, Matthew J.

On June 3, 2004, a jury in a San Francisco federal court convicted former Ukrainian Prime Minister Pavel Lazarenko of twenty-nine counts of money laundering, wire fraud, interstate transportation of stolen property (ITSP), and conspiracy. (1) The jury found that Lazarenko stole tens of millions of dollars from the Ukrainian people, which he then concealed in U.S. banks. For only the second time in history, a foreign head of government had been successfully prosecuted in the United States. (2)

Yet it was the first time that a former leader of a foreign country was convicted in a U.S. court in part for breaking his own country's laws. The U.S. offenses with which Lazarenko was charged criminalize transactions involving money obtained from an underlying illegal act. (3) While these underlying criminal activities typically occur within the United States, Lazarenko stole property and committed extortion within Ukraine. Nevertheless, the district court instructed the jury that it could find him guilty of violating U.S. laws against money laundering, wire fraud, ITSP, and conspiracy if it found that his activities in Ukraine violated Ukrainian law. (4)

In effect, the U.S. government helped Ukraine enforce its own laws where Ukrainian courts had failed. (5) Although Lazarenko's corruption was well known in Ukraine, at the time his own country's courts and prosecutors lacked the independence to convict such a powerful political figure. (6) The story is familiar across the developing world: Good laws on the books are not enforced, corruption and lawlessness deepen, and consequently public disillusionment with the promise of democratic reforms grows.

Although U.S. prosecutors claimed no such foreign policy designs, (7) this Comment argues that Lazarenko suggests a potentially powerful new tool to promote the rule of law abroad: U.S. prosecutors indirectly punishing violations of foreign laws in U.S. courts by using such violations to prove elements of U.S. crimes. Helping countries in transition enforce their own laws and eliminate corruption at home until their own legal systems become stronger is a heretofore unrecognized collateral benefit of such prosecutions. In considering whether to prosecute foreign officials in the future, the U.S. government should take into account this goal of promoting democracy.

I

While there is an emerging literature about promoting the rule of law abroad and eliminating corruption, (8) it has not considered this Comment's strategy of using criminal prosecutions in the courts of one country to enforce another country's law. As shown in Table 1, efforts to promote the rule of law through courts can be categorized along two dimensions: the substantive law used as a rule of decision (i.e., a country's own domestic laws, foreign laws, or international norms) and the choice of forum used to enforce this substantive law (i.e., domestic courts or foreign courts).

There are currently three common strategies to promote the rule of law. The most familiar is for a domestic (e.g., Ukrainian) court to enforce its own country's laws. The bulk of Western rule-of-law assistance goes to training and funding the courts of developing nations to do this, but immediate results have proven elusive. (10) A second strategy entails a domestic court enforcing either international or foreign law, which may be incorporated into a country's domestic law by means of a treaty. Western governments encourage developing countries to sign international agreements, such as the Geneva Convention or the U.N. Convention Against Corruption, and exert some diplomatic pressure when their courts do not enforce these norms at home. A third strategy involves a foreign court (e.g., in the United States) or an international tribunal finding that an act in another country violated international or foreign law. (11) This Comment identifies and explores a fourth, currently underused strategy: using foreign courts to indirectly enforce a developing country's own laws.

II

Prosecuting a foreign official in a U.S. court helps strengthen the rule of law abroad by avoiding several key obstacles to fighting corruption in developing countries. In Ukraine, as in other transition countries, the chief impediment to prosecuting corrupt officials is not the absence of good laws on the books (12) but their poor enforcement. This is due to three familiar factors. First, Ukraine inherited a weak legal culture from seventy years of Soviet communism, during which time laws were not enforced and government corruption spread. (13) Second, well after the collapse of the Soviet Union in 1991, judges and prosecutors had little job security or independence from political pressure and thus had few incentives and limited ability to prosecute high-level corruption. (14) Finally, current officials are disinclined to prosecute former senior government officials because public trials threaten to uncover their own ongoing corruption.

Using U.S. courts to indirectly enforce a developing country's own laws would not supplant local enforcement (15) but would instead ensure that prominent officials do not escape punishment while the local judiciary develops. (16) For the same reason, war crimes tribunals, such as the International Criminal Tribunal for the Former Yugoslavia, have initiated prosecutions outside of the transition country where the crime occurred without requiring that country's consent.

Although U.S. prosecutions can only reach a handful of the most notorious corruption cases in transition countries, such high-profile crimes are some of the most damaging to the rule of law because they reinforce the low costs of flouting the law. In 2003, for example, eighty-three percent of Ukrainians felt that public officials took public funds for their personal benefit. (17)...