Some Foreign Corrupt Practices Act enforcement actions have focused on “foreign officials” receiving tickets to major sporting events such as the Olympics or World Cup.
In the BHP Billiton enforcement action, the U.S. government stated: “BHP Billiton footed the bill for foreign government officials to attend the Olympics while they were in a position to help the company with its business or regulatory endeavors.”
In the Telefônica Brasil enforcement action, the U.S. government stated: “Telefônica Brasil offered and provided tickets [to the World Cup and Confederations Cup] and hospitality to government officials who were directly involved with, or in a position to influence, legislative actions, regulatory approvals, and business dealings involving the company.”
Put on your FCPA goggles for a second and consider this scenario.
“Everyone knows the one thing that makes [a city] famous. For one week every spring, this otherwise sleepy town and its golf club come alive to host [a major golf sporting event].
An event of this magnitude, hosting tens of thousands of fans, staff, players, and guests requires close coordination between the [city] and [the private golf club hosting the event]. Roads are shut down, cops take over traffic and a tiny regional airport suddenly swells with private jets.
But, it turns out that the relationship between the local government and the world renowned private club is even closer than previously known. And those ties, according to an investigation by The Wall Street Journal, test the limits of ethics laws that guide how public officials should interact with businesses within their purview.
For years, [the golf club] has gifted scores of highly coveted and valuable tickets to high-ranking city employees and elected officials, according to emails reviewed by The Journal in response to public records requests and people familiar with the matter. Some of those tickets — the especially rare [ticket package] that grant access to all four rounds of the tournament — can sell for more than $20,000 on the secondary market.
Those who have received tickets include top officials in key departments and some of their staff, according to the emails and people familiar with the gifts. [The city’s] commissioners also get them, and the mayor’s office gets an allotment of tickets for him and more that he can hand out. In the past, even some local judges got them.
[…]
The club’s gifting has been going on for decades and is considered so commonplace that it doesn’t merit a second thought by city officials, several people familiar with the matter said. Those people spoke on condition of anonymity, because they feared retribution from the city, club or both.”
Spot any FCPA risk?
Presumably so and with good reason.
But, neither the city, the event, nor the public officials were foreign.
The city was Augusta, Georgia, the event was the Masters, and the officials were an assortment of local officials. (See here for the Wall Street Journal article “A Masters Tradition Unlike Any Other: Gifting Tickets to Government Officials”).
Just don’t call it bribery.
