This article was reprinted with permission
from FCPA Professor
As noted in this prior
post, in October 2010 Judge Jackson Kiser (W.D. Va.) sentenced Bobby Elkin
Jr. Elkin (the former Country Manager for tobacco company
Dimon International Kyrgyzstan) pleaded guilty to a one count
criminal information charging conspiracy to violate the FCPA. (See here for
the prior post). Like many federal court judges before him and after him,
Judge Kiser did not see the FCPA conduct at issue in the black and white
terms the DOJ often portrays, but rather saw shades of gray. In
rejecting the DOJ's requested 38 month sentence, Kiser sentenced Elkin to
probation. According to media reports, Judge Kiser stated that
the CIA routinely bribes Afghan warlords, but the CIA's conduct is not illegal
and that this "sort of goes to the morality of the situation."
Yes it does and it took this
recent New York Times story "With Bags of Cash, CIA Seeks Influence in
Afghanistan" to put our stark double standards in the headlines once
again. (See this tag
for numerous double standard posts). The NY article states, in pertinent
part, as follows.
For more than a decade, wads of American dollars packed
into suitcases, backpacks and, on occasion, plastic shopping bags have been
dropped off every month or so at the offices of Afghanistan's president -
courtesy of the Central Intelligence Agency. All told, tens of
millions of dollars have flowed from the C.I.A. to the office of President
Hamid Karzai, according to current and former advisers to the Afghan
leader. [...] The C.I.A., which declined to comment for this article, has
long been known to support some relatives and close aides of Mr. Karzai. But
the new accounts of off-the-books cash delivered directly to his office show
payments on a vaster scale, and with a far greater impact on everyday
governing. [...] The cash does not appear to be subject to the oversight
and restrictions placed on official American aid to the country or even the
C.I.A.'s formal assistance programs, like financing Afghan intelligence
For additional coverage, see videos here
and here from NBC and
As noted in my recent article, in
this new era of FCPA enforcement those subject to the FCPA have been
frequently reminded that ''we in the United States are in a unique position to
spread the gospel of anti-corruption, because there is no country that enforces
its anti-bribery laws more vigorously than we do.'' We have been told
that "robust FCPA enforcement has become part of the fabric of the Justice
Department" and that its "global anti-corruption mission has seeped into the
Criminal Division." We have been told by the DOJ that FCPA enforcement is
"our way of ensuring not only that the Justice Department is on the right side
of history, but also that it has a hand in advancing that history."
The conduct at issue in the NY Times article of course
goes above the DOJ, but what to think of our "unique position to spread
the gospel of anti-corruption" after the NY Times article?
Is the U.S. truly on the "right side of history"?
During this era of FCPA enforcement, enforcement actions
frequently include allegations of corporate payments to "foreign officials" for
such items as wine, watches, cameras, kitchen appliances, business suits,
television sets, laptops, tea sets and office furniture. Last week's
Ralph Lauren enforcement action (here)
included allegations related to perfume, dresses and handbags.
This conduct pales in relation to the conduct described
in the NY Times article and is made even more egregious given that FCPA
enforcement actions invariably involve use of private shareholder/owner funds,
whereas the campaign of bribery in Afghan is using public funds.
One of the best statements found in the FCPA's extensive
legislative history (see here for
my article "The Story of the Foreign Corrupt Practices Act") was from Theodore Sorensen. Sorensen's career included several notable accomplishments and, as President
Kennedy's speechwriter, he had a way with words.
As to the basic issue of defining bribery, Sorensen
observed as follows: [T]here 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. [...] 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."
Sorensen's insight was spot-on when made approximately 35
years ago and still holds true today.
The recent NY Times article concerning government
sanctioned bribery using public funds really ought to cause us to pause
and reflect on much in the bribery and corruption space.
Read more articles on the FCPA by Mike
Koehler at FCPA
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