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Lots Of Talk … But What Is It?

With the International Corruption Hunters Alliance meetings in Washington, D.C. and with International Anti-Corruption Day, there has been lots of talk this week about “bribery” and “corruption” and seeking ways to eliminate it.

Sounds good.

The problem is – how to eliminate something on which there is little agreement – just what is meant by “bribery” and “corruption.”

All would agree that providing a suitcase full of cash to government leaders to get government contracts is “bribery” and “corruption” – yet, perhaps at the risk of oversimplification, that is where the consensus seems to stop.

Are expediting or facilitating payments (so-called grease payments) to get things done that should be done anyway “bribery” and “corruption”?

The FCPA says no (whether the DOJ and SEC agree with that is subject to dispute). The U.K. Bribery Act says yes.

A company does business in Kyrgyzstan. Pursuant to local law, the “Tax Inspection Police” conduct periodic audits. During such an audit, a corrupt tax official threatens to assess penalties and shut down the company’s office unless it makes cash payments to the official. The company acquiesces and makes a payment so that it can continue to do business in the foreign jurisdiction. Has the company engaged in “corruption” and “bribery”? Apparently so (see here) – do you agree?

A company seeking business with a state-owned enterprise in China arranges and pays for employees of the enterprise to travel to popular tourist destinations in the U.S., including Hawaii, Las Vegas, and New York City. Did the company engage in “corruption” and “bribery”? Apparently so (see here). However, if the same company was seeking business with a private enterprise, not an alleged state-owned enterprise, some would call this effective sales and marketing. Can the same payment be legal if given to person x, yet “corruption” and “bribery” if given to person y?

A company does business in Venezuela with a government owned entity pursuant to a bona fide contract. The company provided legitimate, value added services to the government entity pursuant to the contract, but is having difficulty collecting outstanding receivables. A mid-level employee at the government entity is holding up payment, but indicates that for a cash payment, he will release funds due. The company makes the payment. Did the company engage in “corruption” and “bribery”? Apparently so (see here).

Talking about “corruption” and “bribery” is easy.

Addressing it, tackling it, hunting it down is the difficult part, particularly since reasonable minds reasonably differ on what “corruption” and “bribery” even means.

One of the best quotes I’ve seen on this topic is from the late 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.”

For a sampling of this week’s speeches about “bribery” and “corruption” see the following.

Assistant Attorney General Lanny Breuer (here) at International Anti-Corruption Day. Speaking to the private sector, Breuer stated as follows. “To lead the world’s anti-corruption efforts by example. I have been told that some companies complain that they do not understand what it means to violate the FCPA. This may be an acceptable legal argument to make or litigation position to advance. But I am asking you, my friends, to do more than try and test the edges of the law. I am asking you to conduct business responsibly across the globe, and to fulfill your commitment to work against corruption in all its forms. Indeed, you are on the front lines of this fight.”

Acting Deputy Attorney General Gary Grindler (here) at the International Corruption Hunters Alliance meeting. (In case you have not yet heard that: (i) the DOJ has recently charged more than 50 individuals and collected nearly $2 billion in fines and penalties; (ii) the DOJ is using every available investigative technique to pursue FCPA cases; and (iii) the DOJ rewards self-disclosure and cooperation).

Senator Patrick Leahy (here) at the International Corruption Hunters Alliance meeting. Among other things, Senator Leahy notes that the U.S. is not immune from “corruption” and that the U.S. has “not always” lead by example.

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