Prior posts here, here, and here highlighted the recent $118.2 million Foreign Corrupt Practices Act enforcement action against Comunicaciones Celulares S.A. (“Comcel” doing business as TIGO Guatemala), a subsidiary of Millicom International Cellular, S.A, concerning bribery schemes in Guatemala.
This post continues the analysis by highlighting additional issues to consider.
Guatemala
The Comcel enforcement action is believed to be just the second FCPA enforcement action in history to concern conduct in Guatemala.
As highlighted here, a portion of the wide-ranging 2016 FCPA enforcement action against Odebrecht / Braskem concerned conduct in Guatemala – specifically payments to government officials in order to secure public works contracts.
Influencing Legislation
The FCPA’s legislative history documents how the law was intended to cover “payments made to foreign officials for the purpose of obtaining business or influencing legislation or regulations.”
The Comcel enforcement action, in large part, is an example of the later.
As stated by the DOJ:
“During the relevant period, TIGO Guatemala maintained approximately 40-50% market share of Guatemala’s mobile telecommunications sector. TIGO Guatemala paid bribes to Guatemalan legislators to ensure their support for legislation and policies favorable to TIGO Guatemala. For example, the bribery scheme resulted in (1) the passage of legislation in 2012 that permitted TIGO Guatemala to renew its radiofrequency usufruct titles-the right to use, possess, and benefit from the spectrum while the government maintained ownership–for a 20-year term; and (2) the passage of legislation in 2014, frequently referred to as “Ley TIGO” because it disproportionately benefited TIGO Guatemala.”
Jurisdiction
Comcel was charged with conspiracy to violate the FCPA’s anti-bribery provisions – specifically the so-called 78dd-3 portion of the FCPA applicable to “person other than issuers or domestic concerns.” In other words, a foreign company that does not have shares traded on a U.S. exchange.
This prong of the FCPA has the following jurisdictional element: “while in the territory of the United States, corruptly … make use of the mails or any means or
instrumentality of interstate commerce” in furtherance of a bribery scheme.
According to the DOJ, Acisclo Valladares Urruela (a citizen of Guatemala and TIGO Guatemala’s Chief Corporate Affairs Officer and Head of Legal in or around and between 2008 and 2015 and again serving as Chief Corporate Affairs Officer in or around 2017) “caused the transfer of approximately $350,000 from his U.S. account to a bank account in the Southern District of Florida” as part of a series of financial transactions to generate cash to pay bribes to Guatemalan officials.’
Whether this satisfies the “while in the territory of the U.S.” prong of the jurisdictional element is an open question.
Not Accurate
Millicom’s press release about the enforcement action states:
“The fine amount represents a 50 percent discount off the bottom end of the applicable penalty range under the U.S. Sentencing Guidelines – the highest penalty discount available under applicable DOJ policy and more than has ever been granted to a company in an FCPA-related agreement of this kind …”.
This is not accurate.
Pride International received a 55% discount off of the bottom end of the Guidelines range (see here) and Alcoa also received an approximate 55% discount off of the bottom end of the Guidelines range (see here).
