The Foreign Corrupt Practices Act (FCPA) was created to provide a level playing field for American businesses doing business overseas. It prohibits “corrupt” payments (also known as bribes) to foreign officials. However, there has been much discussion among the white collar criminal attorney community about the meaning of the word “corrupt”. The recent guidance issued by the DOJ and the SEC provides some insight into their definition of corrupt in enforcing the FCPA to assist criminal bribery attorneys in advising their clients.
Prior to the issuance of the guidance, the United States Congress provided their reasoning for using the word “corruptly” in drafting the legislation by stating:
The word “corruptly” is used in order to make clear that the offer, payment, promise, or gift must be intended to induce the recipient to misuse his official position; for example, wrongfully to direct business to the payor or his client to obtain preferential legislation or regulations or to induce a foreign official to fail to perform an official function.
The FCPA guidance goes on to indicate that the word “corruptly” simply indicates the intent of the giver. A basic requirement of the conviction of anyone of a criminal act, is that the defendant knowingly and intentionally commit the criminal act for which they are being prosecuted. Similarly, it appears the guidance interprets the use of “corruptly” as requiring a corrupt (or criminal) intent.
The guidance also makes clear that simply offering such a corrupt payment (or bribe) is enough to violate the FCPA even if the payment is never made, and even if the actor does not even know the identity of the person to receive the payment.
The guidance, however, is unclear what specific “overt act” would be required to consummate a criminal act. In other words, in the majority of criminal cases, to plan to commit a crime is not enough to be guilty of the crime – at least one of the conspirators must engage an “overt act” towards completing the crime.
However, the DOJ and SEC suggest otherwise in application of the FCPA in stating:
“ [A]n executive who authorizes others to pay ‘whoever you need to’ in a foreign government to obtain a contract has violated the FCPA – even if no bribe is ultimately offered or paid.”
This position of the DOJ and SEC should be concerning to the white collar criminal attorney in that it suggests a deviation from typical enforcement of such crimes requiring an “overt act.” This statement suggests that an executive planning to bribe a foreign official is automatically guilty, even if they later change their mind and fail to act on this plan of bribery. This position of the DOJ and SEC could be attacked by a skilled white collar practitioner in the event such a case were prosecuted.
In any event, the FCPA guidance clearly indicates the term “corruptly” as used in the FCPA is very similar to the term “criminal intent”, a much more familiar phrase to criminal attorneys.