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Friday Roundup


Scrutiny alerts and updates, ripples, difficult business conditions, resource alerts, and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alerts and Updates


Bloomberg reports:

“Wal-Mart Stores Inc. is butting heads with the U.S. government over how to wrap up a long-running foreign corruption investigation. Officials have proposed that the world’s biggest retailer pay at least $600 million to resolve probes by the Justice Department and the Securities and Exchange Commission into whether it bribed government officials in markets from Mexico to India and China, according to three people familiar with the matter. The retailer has rebuffed the government’s request, two of them said.

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Regarding Charitable Foundations …


This previous post highlighted Hillary Clinton’s corruption perception problem.

With additional revelations about the Clinton Foundation recently in the news (see here for AP report, here for a Los Angeles Times report), this post highlights Foreign Corrupt Practices Act enforcement actions that have involved, in whole or in part, donations to foundations founded by or favored by foreign officials.

To be sure, Hillary Clinton is not the only U.S. official or candidate for office who has been under the microscope regarding a charitable foundation (this recent article “The Uncomfortable Truths and Double Standards of Bribery Enforcement” details other examples).

However, the irony is that as Secretary of State Clinton championed the U.S. crusade against foreign bribery under the FCPA stating that the Obama administration “has taken a strong stand when it comes to American companies bribing foreign officials” and that any perceived weakening of the FCPA “would not give us the leverage and the credibility that we are seeking” on the world stage.

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Supreme Court Unanimously Rejects “The Government’s Boundless Interpretation Of The Federal Bribery Statute”


This previous post previewed U.S. v. McDonnell, the former Virginia governor’s Supreme Court appeal of criminal charges related to the acceptance by the McDonnells of $175,000 in loans, gifts, and other benefits from Virginia businessman Jonnie Williams (CEO of Star Scientific) while Governor McDonnell was in office.

Although outside the context of the Foreign Corrupt Practices Act, the case is FCPA relevant because it presented the Supreme Court with the following question: “whether ‘official action’ is limited to exercising actual governmental power, threatening to exercise such power, or pressuring others to exercise such power, and whether the jury must be so instructed.”

As noted in the prior post, the core of the FCPA’s anti-bribery provisions prohibit the direct or indirect payment or offering of money or anything of value to a “foreign official” for purposes of: (A) (i) influencing any act or decision of such foreign official in his official capacity, (ii) inducing such foreign official to do or omit to do any act in violation of the lawful duty of such official, or (iii) securing any improper advantage; or (B) inducing such foreign official to use his influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality in order to assist the payor in obtaining or retaining business for or with, or directing business to, any person. (emphasis added).

Yesterday, the Supreme Court, in a unanimous decision written by Chief Justice Roberts, reversed McDonnell’s criminal convictions. Calling the government’s theory of prosecution “boundless,” the Court adopted a narrow interpretation of the meaning of “official action.”

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Hillary’s Corruption Perception Problem


Image a foreign country in which a political family amassed tens of millions of dollars to their family foundation during the same general time period in which one member of the family was a powerful official in various branches of government with some discretionary authority to advance the interest of donors. A political family in which one member was, at various points over the past decade, running for the nation’s highest elected office while at the same time securing millions of dollars in speaking fees from high-profile companies.

An average American would rightly be concerned about the above activities and many would call the conduct of the political family corrupt, or at the very least raising a perception of corruption.

Yet, as highlighted over the past several months, the above political family is not from a foreign country, but describes the Clintons, including presumptive Democratic Presidential nominee Hillary Clinton. As noted here: “what ought to frighten Americans is the way the Clintons mix money and power in the black box of their eponymous foundation to award themselves more of each.”

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Appearances Matter – President Obama Hobnobs With Siemens Executives Who Provide Him Something of Value

Barack Obama bekam bei seinem Besuch am Siemens-Stand von CEO Joe Kaeser einen Golfschläger geschenkt. "Jetzt kann ich Angela beibringen, wie man Golf spielt", scherzte der US-Präsident.

Barack Obama received a golf club as a give-away from CEO Joe Kaeser while visiting the Siemens booth. "Now I am going to teach Angela how to play," the president joked.

Granted, it happened in late 2008.

The “it” is the Siemens Foreign Corrupt Practices Act enforcement action in which the U.S. government stated, among other things, that “for much of its operations across the globe, bribery was nothing less than standard operating procedure for Siemens” and that the “pattern of bribery by Siemens was unprecedented in scale and geographic reach.”

According to the U.S. government, Siemens’ conduct was “egregious,” “staggering,” “brazen,” and “systematic;” and that there existed a “corporate culture in which bribery was tolerated and even rewarded at the highest levels of the company.”

In 2008, Siemens resolved parallel DOJ/SEC FCPA enforcement actions by agreeing to pay $800 million (still the largest FCPA settlement amount of all-time – see here for the current top ten list).

Although approximately 7.5 years have passed since 2008, the Siemens FCPA enforcement action remains an active issue for the U.S. government. Indeed, as highlighted in this recent post, the DOJ is seeking to block release of the Siemens’ Monitor Reports.

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