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Several notable Foreign Corrupt Practices Act enforcement actions have involved conduct in Haiti including U.S. v. Kay and U.S. v. Esquenazi.

The Esquenazi enforcement action concerned the telecommunications sector in Haiti.

Reading the news with “FCPA goggles” on is – for me – an occupational hazard of sorts.

So it was with a recent Wall Street Journal article titled “Amid Haiti’s Mayhem, Phones Keep Working.”

The article concerns Digicel, Haiti’s largest telecommunications operator with approximately 70% market share in the country.

The article begins:

“Gangs in Haiti have destroyed schools, pharmacies and factories. But they have largely spared one infrastructure network: the country’s telecommunications grid. Gangsters, it turns out, need working cellphones, too.”

According to the article:

“Digicel uses subcontractors it calls “community liaisons” to meet with gang chieftains so that the company can secure fuel from gang-controlled ports and ensure the safety of technicians conducting repairs in gang-controlled neighborhoods.”

[…]

Though gang members love their cellphones – many chieftains are sensations on social media – Digicel hasn’t been completely spared. It has had to negotiate with gangs for the release of dozens of abducted engineers.

[…]

To refuel cell towers – powered by diesel because of a shaky power grid – Digicel has to make sure its truckers have gang approval to reach Haiti’s main fuel terminal.

Keeping the network running is vital because it is the country’s main communication channel.”

The article does not suggest that Digicel has made any improper payments to gang leaders in Haiti nor is this post suggesting they have. Rather, the article serves as an interesting hypothetical of sorts concerning real world business conditions in a specific country – if something of value was offered or given to gang leaders in Haiti.

Would gang leaders in Haiti be considered “foreign officials.”

Given the FCPA’s third party payment provisions, what does Digicel know about the “community liaison” subcontractors and their interactions with gang leaders?

If something of value were provided – would there be corrupt intent (given the circumstances mentioned in the article)?

Would the FCPA’s facilitation payment exception apply? It states that the FCPA’s anti-bribery provisions “shall not apply to any facilitating or expediting payment to a foreign official, political party, or party official the purpose of which is to expedite or to secure the performance of a routine governmental action by a foreign official, political party, or party official.” The definition of “routine governmental action” means “an action which is ordinarily and commonly performed by a foreign official in” (among other things) “providing phone service.”

The article further states notes:

“After Haiti’s devastating 2010 earthquake, an initiative to rebuild schools and hospitals through the Digicel Foundation, the company’s charitable wing, won praise and turned (Denis O’Brien – an Irish telecom billionaire who founded Digicel] into a champion for philanthropic efforts in the country. [Digicel] turned into the impoverished nation’s largest private foreign investor as it spent hundreds of millions of dollars on communications infrastructure as well as education initiatives and professional training programs for average Haitians.”

There is of course nothing wrong with making charitable donations in a foreign country, but it does raise a certain element of FCPA risk and several DOJ FCPA Opinion Procedure Releases have focused on the issue. (See here).

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