The Key to Avoiding Criminal Liability Under the FCPA
Compliance is not rocket science. Of course, the one time I told that to a company’s general counsel, he looked at me and said “Before I had this job, I was a rocket scientist” (which was true).
With all the reams of paper and blog space outlining detailed compliance formulas, a company can protect itself from criminal liability by committing itself to transparency and negating corrupt intent.
In order to fall within the criminal FCPA prohibition against bribery, a corporate official must act with “corrupt intent.” Whether it is giving a foreign official a gift, paying for the official’s meal, donating to a charity or hiring a former government official or his or her relative, a company can avoid any criminal liability by acting in a manner which is contrary to corrupt intent.
To do this, the company must employ the following:
1. Document the issue – FCPA practitioners repeat the mantra of “document, document and then document.” It is a critical requirement to preserve a record of a company’s good faith analysis of an FCPA issue and the reasons for its conclusion that such an action complied with the law.
2. Transparency – if the company’s analysis and actions are undertaken with transparency and no attempt to disguise or hide its action or the reasons for such an action, a fact finder (judge or jury) is unlikely to conclude that the action was taken with corrupt intent. Bribes are paid in the dead of night, cloaked in attempts to keep the transaction secret and avoid scrutiny. When a company acts in an open manner, without any attempt to conceal, it is protected by an inference of a lawful state of mind.
3. Negate Corrupt Intent – a company which specifically explains that its actions are taken without corrupt intent, and even communicates the lack of such intent to the foreign official, will gain the benefit of negating corrupt intent. When I take a government official to lunch, pay for his meal, and inform the official that I am doing so without any intent to induce the official to engage in improper conduct, I am acting contrary to any inference of “corrupt intent.”
These are basic principles which require clear procedures and documentation. It is a lot easier, and much more effective, to deal with the issue “straight up” rather than surrounding a company with cumbersome, costly and procedures which do not really guarantee any defense other than the existence of the procedure itself.