Anyone with a pair of reasonably well-fitted FCPA goggles would recognize the risk.
A company makes a $71,000 charitable donation to an organization in which a public official in its jurisdiction is a longtime board member.
The same company – for each of the past five years – has given $25,000 to an Institute named for the late mother of another public official who just so happens to chair a key governmental committee overseeing the company’s industry.
In the aggregate and over the past two years, the same company has given approximately $1.6 million to charities affiliated with lawmakers or executive-branch officials. It is not just one company, but other companies in the same industry have also given in the aggregate and over the past two years approximately $1.35 million to the same public officials.
Each of these donations present obvious red flags under the Foreign Corrupt Practices Act.
Indeed, skilled practitioners no doubt will make comparisons to the Schering-Plough and Eli Lilly enforcement actions (here and here) involving the same alleged Polish “foreign official” who chaired a bona fide Polish castle restoration foundation, yet also was in a position of influence concerning drug purchases in a region of Poland.
But wait, the above-described donations do not present any red flags. Scrap those internal investigation plans, forget about voluntary disclosure, and slim chance there will be an enforcement action.
The public officials are not “foreign officials,” they are U.S. officials!
See here for the recent article in the Philadelphia Inquirer regarding the charitable giving practices of Comcast and other telecom companies.
Nobody said our system was perfect, but that is just how our system works some will say. Recall, the U.S. Supreme Court recently stated that “ingratiation and access are not corruption” (see here for the prior post).
But why should corporate interaction with a “foreign official” be subject to greater scrutiny and different standards of enforcement than corporate interaction with a U.S. official? After all, there is a U.S. domestic bribery statute (18 USC 201) with elements very similar to the FCPA. Why do we reflexively label a “foreign official” who receives “things of value” from private business interests as corrupt, yet generally turn a blind eye when it happens here at home?
As you contemplate these questions, just remember – as a former DOJ Assistant Attorney General of the Criminal Division stated in an FCPA speech (see here) – “we in the United States are in a unique position to spread the gospel of anti-corruption.”
For numerous other prior posts on the “double standard,” see this tag.