- FCPA Professor - http://fcpaprofessor.com -

Is There A Difference?

In September 2010, during the sentencing of Nam Quoc Nguyen, one of the Nexus Technology defendants (see here [1] for the post on the sentences), the DOJ called to the witness stand the former U.S. commercial attache from Vietnam who was asked to testify as to the “seriousness of the offense as it impacts Vietnam.” (See here [2] for relevant portions of the sentencing transcript).

While in Vietnam, the commercial attache oversaw a staff of about ten in delivering services to American companies to help them grow their exports and he managed an advocacy portfolio in Vietnam to assist U.S. companies in selling directly to the Vietnam government. The individual testified that his group “constantly advise[d] companies on strategies to enter the market, to bid on government contract, to win business.”

The former commercial attache described Vietnam as a “corrupt country” and the DOJ presumably expected the individual to stay on message as to how corruption in Vietnam is not a victimless crime and to describe who suffers from corruption in Vietnam. He did that.

But the individual drifted it seemed in his testimony and said, “I make no bones about it. It’s very difficult to do business in Vietnam. It’s not very transparent but American companies are making money and there are a number of strategies that companies can follow.”

The individual was asked “is it possible to do business in Vietnam without paying bribes.” He answered “it is.”

One of the strategies he discussed was the following.

“Often it [obtaining Vietnamese government business] may require a personal visit by the Ambassador or another high-ranking official to a government official or an official of a state-run enterprise. It could take the form of a letter from a high-ranking U.S. government official to another official in the Vietnamese government or state-owned enterprise.” (See pg. 68).

The individual then specifically talked about a $180 million commercial satellite contract Lockheed Martin was awarded by Vietnam Post and Telematics Group (a “major state-owned enterprise”). See here [3] for Lockheed’s press release.

According to the individual’s testimony, Lockheed (he described the company as “one of our clients”) “was in a competitive position to provide $180 million commercial satellite to one of the major state-owned enterprises, Vietnam Post and Telematics Group, VNPT.”

At this point, even the judge asked the DOJ attorney, “what does this have to do with what you said you were calling this witness to tell us about?”

After an exchange between the judge and the DOJ attorney, the individual finished by saying. “The bottom line is, we have been able to help companies work through. In this particular case, a European country was offering payment with regards to winning the bid but the intervention of the Ambassador with the Chairman of VNPT and the Minister of Information Communications, was a critical element to help the company win the business, and they have stated as such.”

According to this [4] October 2010 article, Lockheed is among the “biggest corporate campaign contributors in U.S. politics.”

Is there a difference between (a) when a company (or its employees) gives something of value to a foreign official to obtain or retain business with a foreign government; and (b) when a company (or its employees) gives something of value to U.S. political parties or candidates, or spends millions lobbying the U.S. government, and then the U.S. government assists the company obtain or retain business with a foreign government?

What about those U.S. diplomats that act as “marketing agents” for U.S. companies such as Boeing as recently profiled by the New York Times (here [5]).