Filmfest Bribery Case Finally Goes to Trial

Could hinder the way Hollywood does business overseas.

Last Updated: August 12, 2010 @ 10:33 AM

Could hinder the way Hollywood does business overseas.

Three weeks after it was supposed to have started — and two court delays later — a case that could have serious consequences for the way Hollywood does business and conducts productions overseas will finally have its day in court on Tuesday.

Charged with, among other allegations, violating the Foreign Corrupt Practices Act, the trial of “Rescue Dawn producer Gerald Green and his wife Patricia will begin at 9 a.m. Tuesday in downtown L.A.

The Greens, as The Wrap reported earlier this month, are charged by the Department of Justice with having bribed Thai authorities up to $1.8 million between 2002 and 2006 to receive about $14 million in government contracts and grants to run the Bangkok International Film Festival.

Arrested in December 2007 and out on bail since, the Greens — in indictments filed by the DOJ in October 2008 — are alleged to have paid bribes to former Tourism Authority of Thailand Governor Juthamas Siriwan and others.

The feds, which also accuse the couple of obstruction of justice and falsified tax returns, say that Green altered budgets to "make them appear as though they were created in 2006 in an effort to characterize bribe payments as bona fide film production expenses,” when the budgets “were not created in 2006."

Green’s lawyer, Jerome Mooney III told The Wrap in early August that the Greens were innocent victims of the political fallout of the upheaval in Thailand from a coup in 2006 that saw opponents of the officials the couple worked with come to power.

Mooney told The Wrap on Monday that while there are a “huge amount of documents that the government has identified as exhibits,” he expects to prove that the couple “received contracts not because of corrupt payments, but because Thai officials knew that they could do the job better.”

Despite the allegations, the lawyer says that while the Greens and their company Film Festival Management “were a small operation, they took on an immense task and performed it admirably.”

With red carpet appearances by stars such as Catherine Deneuve and Michael Douglas and screenings of such films as Julie Taymor’s “Frida,” Pedro Almodovar’s “Talk to Her” and Park Chan-wook’s “Old Boy,” the Greens “put the Bangkok Film Festival on the map,” Mooney said.

The Foreign Corrupt Practices Act became law in 1977. In recent years, starting under the administration of George W. Bush and continuing under Barack Obama,  investigations and prosecutions under the act have become the Department of Justice’s number-two enforcement priority behind terrorism cases.

The act prohibits American citizens and corporations from making “an offer or payment of anything of value to a foreign official, foreign political party or candidate for political office, for the purpose of influencing any act of that foreign official in violation of the duty of that official, or to secure any improper advantage in order to obtain or retain business.”

The case, one of the few in which violation of the act has actually resulted in a trial and not been settled with fines, could put Hollywood in a very vulnerable position.

As corrupt-practices act specialist and former DOJ corruption-enforcement official Jonathon Drimmer said in early August, “You do have a recipe here where the outcome of the Green case could become an instigator of addition scrutiny of the entertainment industry by the Department of Justice. Like they have with the medical-device industry and the oil-services industry, they could begin to pursue industry-wide cases based on an investigation of one on a practice that may be repeated by others.”

The real crux, said Drimmer, is in strict adherence to letter of the law. The U.S. government, he said makes illegal for businesses in this country what is the natural course of business in another, especially in cultures outside of Western Europe.

“We are mixing apples and oranges,” Drimmer told TheWrap. “One of the most vocal criticisms of the application of the law is that it restricts the ability of U.S. businesses, including the film industry, to conduct business overseas and be competitive. We are imposing our own legal regime on a culture where often the cost of doing business is making a small contribution or gratuity.”

The Greens, if convicted, could be sentenced to a maximum penalty of five years in prison. The tax charge carries an additional 10-year sentence, and they also could get 20 years for money laundering.

The trial is expected to run for three weeks.