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Context

FCPA — Bribery: “quid pro quo;” specific intent to

give/receive something of value in return for being
influenced in an official act
CORPORATE CRIMES
¡ Gratuity: just a payment, no quid pro quo
UNIVERSITY OF IOWA, COLLEGE OF LAW — 18 USC 201: prohibits bribes and gratuities to federal
officials
¡ “corruptly gives . . . anything of value to any public official . . .
With intent . . . to influence a public act”
8 ¡ “gives . . . anything of value to any public official . . . For or
because of some official act performed . . . by such public
official”

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Context, cont’d History of FCPA

— Fewer statutes for state and local bribery — 1970’s reports surfaces that U.S. companies were
— Mail/Wire Fraud paying bribes to foreign officials
— Hobbs Act (18 U.S.C. 1951) — Passed FCPA, 18 U.S.C. 78dd-1, in response
¡ “affects commerce . . . by extortion”
— U.S. lobbied other countries to join the effort
¡ Interpreted to include bribery

— 18 USC 666 — Convention on Combatting Bribery of Foreign Public

¡ “corruptly solicits or demands . . . Anything of value from any
Officials passed in Organization for Economic
person, intending to be influenced or rewarded in connection Cooperation and development
with any business . . . of such organization, government, or ¡ In compliance with Convention, U.S. amends FCPA to cover
agency” non-U.S. companies and actors
¡ “Such” refers to groups which “receive[] . . . benefits . . . under
a Federal program”

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Breakout Discussion Elements of FCPA

Why would foreign bribery by U.S. officials worry
Congress? Why would other countries care? Why
would U.S. care about whether other countries care?
Footnote: Bribery is business as usual in many
countries.
— Defendant falls within a covered category
— The recipient is a covered person (foreign official,
political party official, or candidate)
— Defendant made a payment or offer to pay the recipient
directly or indirectly
— For the purpose of influencing an official act, influencing
an official to do or omit to do something contrary to the
official’s duty, or securing an improper advantage (i.e.
“corruptly”)
— Nexus requirement: In order to assist in obtaining or
retaining business
— The defendant committed a qualifying act (this is the
federal jurisdictional hook)

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Covered Defendants Covered Recipients

— Issuers – any company with stocks registered in U.S. — Foreign officials

— Domestic concerns – U.S. citizens, U.S. residents, ¡ Including state companies whose function is treated by the
government as one of its own
companies with U.S. principal place of business
— Foreign political party officials
— Foreign nationals who perform a qualifying act (see
below) — Foreign political candidates

— Agents of the above — Third-party intermediaries who payee knows will

remit payment to the above
— Co-conspirators, aiders-and-abettors of the above
— NOT foreign officials who receive bribes

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Qualifying Acts Mens Rea

— For issuers and domestic concerns that are U.S. nationals — Motive must be “corrupt”
(or their agents)—any act in furtherance of the bribe — The purpose of the payment was to induce the
— For issuers and domestic concerns that are not U.S. recipient to misuse his power
nationals or companies (or their agents)—use of mails,
— Excludes “grease payments”/“facilitating payments”
instrumentalities of interstate trade in furtherance of the
¡ Payment for routine government action
bribe (phone calls, wires that end up being routed
¡ The higher the payment, the more suspect it is
through or stored on U.S. servers)
¡ OECD defines a payment to speed up administrative process
— People who are not U.S. issuers nor their agents—
whose outcome is already pre-determined
performing any act, or causing the performance of any
act, in the U.S. in furtherance of the violation (e.g. paying
bribe with funds in a U.S. bank, or using U.S. cell phone)

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U.S. v. TLI U.S. v. TLI, cont’d

— Covered defendants: — Bribery

¡ TLI ¡ TLI paid Mikerin to secure contract awards
÷ Domestic concern because headquartered in MD — Qualifying acts
¡ Condrey ¡ TLI documented and processed payments
÷ Domestic concern because U.S. citizen
¡ Condrey “caused fake invoices to be prepared”
— Covered recipients:
¡ Tenex
÷ Owned by Russia and performing government functions
¡ Mikerin
÷ Foreign official because director of Tenex

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Hypos Breakout discussion

— What if Mikerin was just a private citizen, but next in line to run
Tenex? The FCPA can apply a foreign bribe, or a foreign
¡ Maybe fits under political candidates official, by a foreign person if a communication
— What if payments were made to an independent foreign “sales connected to the bribe was made on a phone that
agent” who represented TLI’s interests to Tenex?
¡ Depends on whether defendants knew payments would go to Tenex routed its texts through U.S. Discuss.
— What if Condrey was not a U.S. citizen?
¡ Still covered defendant as agent of TLI, a domestic concern; or a resident of U.S.
— What if TLI is a Dutch company that lists shares in the U.S. and the
payment to Tenex is made by transferring shares situated in the
U.S.?
¡ Still a covered as an issuer with an act in the U.S. (also, payment currency is $)
— What if TLI is a Dutch company with no business connection to the
U.S.?
¡ Need to ask if TLI performed or caused a qualifying act in the U.S.
÷ Meeting in the U.S., using a U.S. cell phone, sending email routed through U.S.

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Breakout discussion (alternative) U.S. v. Kay (4th Cir.)

Suppose the President of the United States contacted
the President of Ukraine. Congress had authorized
military funding to Ukraine, but POTUS was
withholding it. POTUS release the military funding if
POU would do him “a favor,” i.e. order Ukrainian
prosecutors to conduct an investigation into a political
rival’s dealings in Ukraine.
— Facts: American Rice Inc. bribed Hatian customs
officials to record 1/3 less the quantity of rice
imported, thereby reducing American Rice’s customs
obligations
— Issue: Whether bribes to obtain illegal but favorable
tax and customs treatment can be for “obtaining or
maintaining business”
— Holding: Yes
— Takeaway: Bribes to lower taxes can qualify if they
“would assist in obtaining or retaining business”

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Defenses Accounting Provisions

— Grease payments — Requires issuers to maintain accurate books

— Payment was lawful under written laws of State — SEC enforces civilly
— Payment was a bona fide expenditure connected to — DOJ steps in for willful violations
promoting products/services or the execution of a
contract

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Summary

— Elements:
¡ Covered defendant
¡ Payment
¡ Covered Recipient
¡ Qualifying act (depends on type of defendant)
¡ For the purpose of influencing an official act or securing an improper
advantage
¡ In order to assist in obtaining or retaining business
— Kay—reflects unclarity on nexus requirement and
potential broad reading
— Defenses
¡ Act was legal
¡ Grease payment
¡ Bona fide expenditure

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