There are certain narratives in the Foreign Corrupt Practices Act space – while theoretically possible – are rarely, if ever, found in actual FCPA enforcement actions.
For instance, all probably recognize that a bribe to foreign official to obtain a contract to build a bridge could – theoretically – result in the contract being awarded to a company that uses sub-standard steel causing the bridge to collapse and thus causing human injuries and/or death.
Likewise, all probably recognize that a bribe to a foreign physician (who the DOJ and SEC may consider a “foreign official”) to implant a defective medical device or to prescribe a worthless drug could – theoretically – result in patient health and safety issues.
However, rarely (if ever) are these type of narrative scenarios found in actual FCPA enforcement actions.
Rather, the vast majority of corporate FCPA enforcement actions involve companies that are otherwise generally viewed as selling the best product for the best price. In certain instances, the company that allegedly bribed a “foreign official” to obtain business (and thus alter the competitive nature of the marketplace – or so the theory goes) had long been doing business with the relevant government agency before the alleged improper account and continues to do business with the government agency after the alleged improper conduct.
Pointing out the above issues is not meant to condone the conduct at issue and the above issues are often not relevant to the elements of an FCPA anti-bribery violation (or related criminal charges).
The above issues are nevertheless pointed out to demonstrate how a common narrative in FCPA enforcement actions often falls apart upon closer inspection and that FCPA enforcement actions do not necessarily always involve “victims.”
This recent post highlighted how Donville Innis (the “foreign official” at issue in the Insurance Corporation of Barbados Limited (ICBL) FCPA enforcement action) was recently sentenced after being found guilty of money laundering.
Innis’s sentencing memo contains an interesting assertion regarding ICBL’s long-standing business relationship with the Barbados Investment and Development Corporation (BIDC), a government agency that Innis oversaw in his role as Minister of Industry.
According to the sentencing memo:
“For approximately twenty-five (25) years prior to 2009, ICBL held the entire insurance portfolio of the BIDC. With the introduction of brokerage services to the BIDC in 2009, the ICBL has competed with other insurance companies for the BIDC’s business. Since then (2009-2021), ICBL has been the lead insurer and retained between 55 – 70% of the BIDC portfolio. Since Inniss’ arrest, the BIDC has maintained ICBL as its lead insurer, evidencing the ICBL’s competitive advantage over other insurers and longstanding relationship with the BIDC.”
The sentencing memo states:
“To be sure, corruption is a serious crime, and the need to root out such behavior in our society is more pronounced now than ever before. However, Inniss has not been charged with any violation of the Prevention of Corruption Act in his home country, where presumably the greatest interest in prosecuting such violations would or should be.”
The sentencing memo further asserts:
“ICBL is firmly entrenched as the largest insurance provider in Barbados and enjoys significant competitive advantages as a result of its status. Of the all the insurers competing for the BIDC’s business, it is undisputable that ICBL offered the best terms and was least likely to face liquidity/solvency problems in the face of potential catastrophic loss to the BIDC’s properties. It is clear the Barbadian community and the BIDC did not suffer any harm from the allegations against Inniss or the conduct at issue.”
The DOJ’s sentencing memo states:
“The defendant contends that his crime caused no harm whatsoever because ICBL was a good insurance company. That is plainly wrong. While it is often difficult to quantify the damage caused by corrupt government officials such as the defendant, that damage is real.”
The DOJ then cited the “foreword to the United Nations Convention Against Corruption” as follows:
“Corruption is an insidious plague that has a wide range of corrosive effects on societies. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organized crime, terrorism and other threats to human security to flourish.
This evil phenomenon is found in all countries—big and small, rich and poor—but it is in the developing world that its effects are most destructive. Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a Government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic underperformance and a major obstacle to poverty alleviation and development.”
The DOJ sought a sentence between 78 to 97 months (6.5 years to 8 years).
As noted in the prior post, Innis was sentenced to 2 years.
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