(CN) – The 2nd Circuit upheld the bribery and fraud convictions of former United Nations commodities chief Sanjaya Bahel.
Bahel was convicted in 2007 of steering $50 million in U.N. contracts to companies represented by his friend, Nanak Kohli. Kohli gave Bahel up to $5,000 a month for the length of the contracts, first-class plane tickets to India, seats at the U.S. Open tennis tournament and below-market rent on a three-bedroom Manhattan apartment.
The Kohlis later sold that apartment to Bahel, former chief of the U.N.’s commodity procurement section, for $600,000 less than market value.
On appeal of his conviction, Bahel said he was entitled to immunity as a U.N. employee. He also claimed that U.S. laws on honest services did not apply to UN employees and that the trial court erred in applying a penalty enhancement at his sentencing because he was not a “public official” under U.S. law.
The Manhattan-based federal appeals court rejected Bahel’s argument that the U.N. was required to, and did not, expressly waive his immunity to prosecution under U.S. law.
In fact, the U.N. had agreed twice to waive any specific immunity Bahel might have enjoyed, according to the three-judge panel.
First, in 2006, the administration of then Secretary General Kofi Anan wrote a letter saying that it had waived “the immunity from legal process of Mr. Bahel for the purpose of the criminal proceedings initiated by the U.S. Attorney for the Southern District of New York. Then, in 2008, Anan’s successor Ban Ki-moon sent another letter to the government confirming that the first letter was intended to fully waive Bahel’s immunity.
Even if the U.N. had not waived Bahel’s immunity, the judges said Bahel had implied the waiver by fully participating in his own defense and not raising the immunity question until after he was convicted.
“The time to raise the issue has long since passed,” Judge Rosemary Pooler wrote for the court. “Having participated fully in the action, he is now bound by its outcome.”
Bahel objected that his conviction for “accepting compensation as a reward” for favors he provided to the Kohlis should have been thrown out because the statute under which he was convicted applied only to organizations that received more than $10,000 in benefits from a federal program.
The funds the U.N. receives from the United States are treaty obligations, Bahel argued, and thus “no reading” of the statute “could plausibly be extended to the charges” in his case.
But the 2nd Circuit said its precedent in United States v. Zyskind holds otherwise. A “federal program” exists “whenever there is a specific statutory scheme that authorizes payments hereunder for the purposes of promoting or achieving the policy objectives of the United States,” Pooler explained.
The United Nations Participation Act, which authorizes payment of the United States’ dues to the U.N., is that specific statutory scheme, and it does so to particularly advance the foreign policy objectives of the federal government, the court noted.
Pooler drew a comparison between the U.N. and Medicare, which is operated by the states but partly funded by the federal government and has long been held to be a federal program by the same statute under which Bahel was convicted. U.N. funding, like Medicare funding, comes with strings that are meant to ensure the federal funds advance policy goals.
The court also rejected Bahel’s claim his conviction should be vacated in light of the Supreme Court’s 2010 decision in Skilling v. United States, which overturned the honest services conviction of a former Enron executive because his crimes entailed neither bribery nor kickbacks.
Bahel has no basis to claim that the decision creates an prosecutorial exemption for foreign nationals like himself who were employees of international organizations.
The cases Bahel cited actually mean “that fraud actionable under [the statute] is limited to the nature of the offenses prosecuted … (i.e., bribery and kickback schemes) – not the identity of the actors involved in those cases,” Pooler wrote.
Bahel’s sentencing judge determined that he was a public official and applied an enhancement to his sentence.
Pooler upheld this finding as well, noting that the trial court specifically mentioned that the “public official” definition should be broadly applied and include officials of public international organizations.
“The U.N. is undoubtedly a public international organization,” Pooler wrote, rejecting the notion that Bahel was a mere employee. “It is difficult to imagine how he could not be considered a high ranking U.N. official, since he was Chief of the Commodity Procurement Section.”
While there are higher-ranking positions, such as representative of a member state, “it is far from the ‘baggage porter’ to which Bahel now seeks to compare himself,” Pooler wrote.
Bahel has paid nearly a $1 million in restitution and forfeited the title to the Manhattan apartment. He was released on bail sometime after July.