fcpa-resource-guide

Examples of Improper
Travel and Entertainment
� a $12,000 birthday trip for a government decisionmaker
from Mexico that included visits to wineries
and dinners
� $10,000 spent on dinners, drinks, and
entertainment for a government official
� a trip to Italy for eight Iraqi government officials
that consisted primarily of sightseeing and
included $1,000 in “pocket money” for each
official
� a trip to Paris for a government official and his wife
that consisted primarily of touring activities via a
chauffeur-driven vehicle
the company’s facilities, in reality, no training occurred on
many of these trips and the company had no facilities at those
locations. Approximately $670,000 of the $7 million was
falsely recorded as “training” expenses. 96
Likewise, a New Jersey-based telecommunications
company spent millions of dollars on approximately 315
trips for Chinese government officials, ostensibly to inspect
factories and train the officials in using the company’s
equipment. 97 In reality, during many of these trips, the officials
spent little or no time visiting the company’s facilities,
but instead visited tourist destinations such as Hawaii, Las
Vegas, the Grand Canyon, Niagara Falls, Disney World,
Universal Studios, and New York City. 98 Some of the trips
were characterized as “factory inspections” or “training”
with government customers but consisted primarily or
entirely of sightseeing to locations chosen by the officials,
typically lasting two weeks and costing between $25,000
and $55,000 per trip. In some instances, the company gave
the government officials $500 to $1,000 per day in spending
money and paid all lodging, transportation, food,
and entertainment expenses. The company either failed
to record these expenses or improperly recorded them as
“consulting fees” in its corporate books and records. The
chapter 2
The FCPA:
Anti-Bribery Provisions
company also failed to implement appropriate internal controls
to monitor the provision of travel and other things of
value to Chinese government officials. 99
Companies also may violate the FCPA if they give
payments or gifts to third parties, like an official’s family
members, as an indirect way of corruptly influencing a foreign
official. For example, one defendant paid personal bills
and provided airline tickets to a cousin and close friend of
the foreign official whose influence the defendant sought in
obtaining contracts. 100 The defendant was convicted at trial
and received a prison sentence. 101
As part of an effective compliance program, a company
should have clear and easily accessible guidelines
and processes in place for gift-giving by the company’s
directors, officers, employees, and agents. Though not
necessarily appropriate for every business, many larger
companies have automated gift-giving clearance processes
and have set clear monetary thresholds for gifts
along with annual limitations, with limited exceptions
for gifts approved by appropriate management. Clear
guidelines and processes can be an effective and efficient
means for controlling gift-giving, deterring improper
gifts, and protecting corporate assets.
The FCPA does not prohibit gift-giving. Rather, just
like its domestic bribery counterparts, the FCPA prohibits
the payments of bribes, including those disguised as gifts.
Charitable Contributions
Companies often engage in charitable giving as part
of legitimate local outreach. The FCPA does not prohibit
charitable contributions or prevent corporations from acting
as good corporate citizens. Companies, however, cannot
use the pretense of charitable contributions as a way to
funnel bribes to government officials.
16