Top Menu

Can You Spot The FCPA Risk?

i found you!

A high-ranking government official encourages other governments to sign deals and change policies to the advantage of various companies.  At the same time, those companies were among the many that gave to the high-ranking official’s family global foundation set up by her spouse. Indeed, at least 60 companies that lobbied the high-ranking official’s office during her tenure donated a total of more than $26 million to the foundation.  In some cases, the donations came after the high-ranking official took action that helped a company.  In other cases, the donation came first.  In some instances, donations came both before and after.

While a high-ranking official, the individual also sought corporate donations for another charity she co-founded.

Can you spot the FCPA risk?

A prudent FCPA practitioner would immediately see the “red flags;” counsel the companies at issue to conduct an internal investigation as to the conduct at issue and related conduct; and – mindful of the enforcement agencies guidance and cognizant of the carrots and sticks they posses – likely suggest voluntarily disclosure of the investigative findings.

But wait.

The above high-ranking government official was not a “foreign official” – it was a U.S. government official. See here for the Wall Street Journal’s recent article about former Secretary of State Hillary Clinton.

But why should business interactions with “foreign officials” be subject to different standards than business interactions with U.S. officials?  Why do we reflexively label a “foreign official” who receives “things of value” from private business interests as corrupt, yet generally turn a blind eye when it happens here at home? Is the FCPA enforced too aggressively or is enforcement of the U.S. domestic bribery statute too lax?  Ought not there be some consistently between enforcement of the FCPA and the domestic bribery statute?

As then Secretary Clinton said in this 2012 speech:

“[T]his Administration, like those before us, has taken a strong stand when it comes to American companies bribing foreign officials. We are unequivocally opposed to weakening the Foreign Corrupt Practices Act. We don’t need to lower our standards. We need to work with other countries to raise theirs. I actually think a race to the bottom would probably disadvantage us. It would not give us the leverage and the credibility that we are seeking.”

As the Wall Street Journal noted in the recent article “corporate donations to politically connected charities aren’t illegal so long as they aren’t in exchange for favors.  There is no evidence of that with the Clinton Foundation.”

For numerous posts under the double standard subject-matter tag – see here.

Powered by WordPress. Designed by WooThemes