Punishing Foreigners for Corrupt Practices

By Michael King posted 12-16-2019 15:36

  

Q:  HOW FAR DOES THE U.S. FOREIGN CORRUPT PRACTICES ACT REACH?

A  THE U.S. DEPARTMENT OF JUSTICE ENFORCES THE FOREIGN CORRUPT PRACTICES ACT IN "EVERY CORNER OF THE GLOBE!"

But I work for a foreign company, I am not a U.S. citizen and I never set foot in the United States?!

In November, 2019, Lawrence Hoskins was convicted of six counts of violating the Foreign Corrupt Practices Act, three counts of money laundering and two counts of conspiracy in a U.S. District Court in Connecticut.

Mr. Hoskins is a citizen of the United Kingdom and was working for a French company.  He was never physically present in the United States when the corrupt practices were committed.  Justice News Press Release by the Department of Justice, Friday, November 8, 2019. 

What U.S. law could nab a foreign citizen for acts committed overseas?

The Foreign Corrupt Practices Act of 1977, 15 U.S.C. §§78dd-1, et seq. makes it unlawful for certain people and entities to pay foreign government officials to get or keep business.  The anti-bribery provisions of the Foreign Corrupt Practices Act prohibit the use of the mails or interstate commerce to offer, pay, or promise anything of value to anyone knowing that the money or thing offered will directly or indirectly be used to influence a foreign official to do something unlawful, or to help in obtaining business for a company.

The conviction of Mr. Hoskins is the most recent episode in the pursuit of Alstom S.A., a French power and transportation company, by the Federal Bureau of Investigation and the U.S. Department of Justice.  In December, 2014, Alstom pleaded guilty and agreed to pay $772,290,000 in fines to settle foreign bribery charges.  Justice News Press Release by the Department of Justice, Monday, December 22, 2014. 

The Justice Department stated that Alstom had perpetrated "a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi Arabia, Egypt and the Bahamas."  At the time of the settlement, FBI Executive Assistant Director Robert Anderson, Jr. announced:  "This investigation spanned years and crossed continents, as agents from the FBI Washington and New Haven field offices conducted interviews and collected evidence in every corner of the globe."

Alstom admitted that its executives and employees had used "consultants" to pay bribes to government officials in connection with obtaining power and transportation projects from state-owned entities in Indonesia, Egypt, Saudi Arabia, the Bahamas and Taiwan.  In Indonesia, Alstom bribed government officials, including a high-ranking member of the Indonesian Parliament, and members of the state-owned electricity company in Indonesia.  The bribes were to get assistance in obtaining several contracts to provide power-related services valued at about $375 million.  Alstom paid more than $75 million to secure $4 billion in projects around the world.

At the time, Mr. Anderson from the FBI made it clear "that we are sending executives who commit these crimes to prison." 

What did Mr. Hoskins do?

Mr. Hoskins was a senior vice president for Alstom's international network and he engaged in a conspiracy to bribe officials in Indonesia.  The bribes were in exchange for helping to obtain a $118 million contract for Alstom Power Inc., a Connecticut subsidiary of the French parent company, to provide power-related services for Indonesians.  Mr. Hoskins used two consultants to hide the bribes.

The long arm of the law goes a long way when the U.S. Government is out to get you!

The U.S. Department of Justice frequently works with foreign countries to get them to prosecute their citizens for corruption offenses under their laws if the individuals cannot be prosecuted in the United States.  The FCPA Blog, Ryan Rohlfsen:  "How much will US v.  Hoskins impact FCPA coverage?"  (September 10, 2018.)

For example, the Justice Department press release in 2014 bragged that the bribed member of the Indonesian Parliament was convicted in Indonesia and sentenced to a three-year prison term.  The release also noted that the head of an Egyptian company working with the State-owned Egyptian electricity company was serving 42 months in prison.

In the November 2019 Press Release, the Department of Justice thanked its colleagues in France, Germany, Italy, Singapore, Taiwan, Switzerland, the United Kingdom and Indonesia.

I have counseled clients on maintaining compliance programs to prevent violations of the Foreign Corrupt Practices Act.  Pro-active vigilance and well-enforced compliance programs can save your company millions and keep you from wearing stripes and a ball and chain!

Michael R King  Gammage & Burnham, Attorneys at Law  mking@gblaw.com  602-256-4405

This article may be distributed with attribution but may not be excerpted or modified without the permission of the author.

Copyright © 2019.

 



0 comments
1 view

Permalink