Put on your Foreign Corrupt Practices Act goggles for this and assess whether there is any FCPA risk given the below scenario.
An apparel company senses a new niche business opportunity and reaches out to potential (largely government associated) customers and sends individuals associated with the potential customers hundreds (if not thousands of dollars) of free company product. The shipment to one potential customer “was so large that the FedEx guy [who delivered the product] asked if it was a fraud-type situation because so many boxes were coming to a residential house.”
Separately, the apparel company (and another company with a clear business interest in the decision) “dangle donations of up to $100,000 in product” to quasi-government associations to influence decisions that benefit the company’s interest.
There are no foreign officials involved.
However, the above scenario describes attempts by Nike Inc. and the NFL to fund girls high school flag football teams across the country (against the backdrop of boys tackle high school football declining and NFL viewership declining).
Is the above yet another example (see here for a recent post) of phrases such as “just don’t bribe” and a “zero tolerance for bribery” being little more than simplistic rhetoric because it all depends on what the “b” word means?
The “b” word often depends on context.
In other words, there is nothing inherently wrong, illegal or unethical about the “thing of value” provided, but the context of the “thing of value,” and who it is provided to or promised to, matters.
One of the best quotes from the FCPA’s legislative history in 1970’s was by Theodore Sorensen (see here for the prior post). He noted that “there will be countless situations in which a fair-minded investigator or judge will be hard-put to determine whether a particular payment or practice is a legitimate and permissible business activity or a means of improper influence.” He then listed numerous examples, and concluded as follows: “reasonable men and even angels will differ on the answers to these and similar questions – at the very least such distinctions should make us less sweeping in our judgments and less confident of our solutions.”