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Issues To Consider From The Stericycle Enforcement Action

Issues

This previous post highlighted the recent net $59 million Foreign Corrupt Practices Act enforcement action against Stericycle (an Illinois based medical waste disposal company) for conduct in Brazil, Mexico, and Argentina.

Portions of the alleged conduct were egregious in that an executive of the company’s Latin America division orchestrated the bribery schemes and others associated with the company used “spreadsheets to track the bribe payments.”

Nevertheless, there are several legal and policy issues to consider from the enforcement action.

Timeline

As highlighted in this post, Stericycle disclosed its FCPA scrutiny in mid-2017.

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A Closer Look At The Ng Jury Instructions

Closer Look

Foreign Corrupt Practices Act jury trials are rare.

Therefore, FCPA jury instructions are also rare.

Highlighted below are certain portions of the jury instructions from the recent trial of Roger Ng (a former managing director at Goldman Sachs) was who convicted by a jury of FCPA and related offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

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Recent DOJ Opinion Procedure Release Reads Like A Hollywood Script

hollywood

The Foreign Corrupt Practices Act when enacted directed the DOJ Attorney General to establish a procedure to provide responses to specific inquiries by those subject to the FCPA concerning conformance of their conduct with the DOJ’s “present enforcement policy.”

Pursuant to the governing regulations of the so-called DOJ Opinion Procedure Release Program, only “specified, prospective—not hypothetical—conduct” is subject to a DOJ opinion.  While the DOJ’s opinion has no precedential value, its opinion that contemplated conduct conforms with the FCPA is entitled to a rebuttable presumption should an FCPA enforcement action be brought as a result of the contemplated conduct.

As highlighted below, recently the DOJ quietly issued this opinion procedure release (dated January 21, 2022) and it reads like a Hollywood script.

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California Court Dismisses Bribery Charges Against Former Apple Inc. Executive For Lack Of Corrupt Intent

Dismissed

California Penal Code Section 67 is similar to the anti-bribery provisions of the Foreign Corrupt Practices Act in that it states: ““Every person who gives or offers any bribe to any executive officer in this state, with intent to influence him in respect to any act, decision, vote, opinion, or other proceeding as such officer, is punishable by imprisonment in the state prison for two, three or four years, and is disqualified from holding any office in this state.”

Other portions of California law provide that the “word ‘bribe’ signifies anything of value or advantage, present or prospective, or any promise or undertaking to give any, asked, given, or accepted, with a corrupt intent to influence, unlawfully, the person to whom it is given, in his or her action, vote, or opinion, in any public or official capacity.” The word “corruptly” imports a wrongful design to acquire or cause some pecuniary or other advantage to the person guilty of the act or omission referred to, or to some other person.”

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Ransom Payments And Corrupt Intent

ransom

Recently, the CEO of Colonial Pipeline Co. acknowledged that he authorized a $4.4 million ransom payment to the perpetrators of the recent cyberattack on the company’s distribution system. CEO Joseph Blount stated: “I didn’t make it lightly. I will admit that I wasn’t comfortable seeing money go out the door to people like this. But it was the right thing to do for the country.” (The Colonial Pipeline provides about 45% of the fuel for the East Coast).

While not an apparent Foreign Corrupt Practices Act issue, the ransom payment provides a good opportunity to explore the FCPA’s corrupt intent element and how things of value provided to a foreign official in the context of a legitimate extortion situation would not violate the FCPA’s anti-bribery provisions.

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