complianceuniverse.org-An Unintentional Act of Bribery

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For example, the perpetrator was aware of the FCPA but proceeded with the transactions. Further, the bribed individual was a relative of the President of Uzbekistan and had influence over the Uzbek telecommunications regulator. They enjoyed their honeymoon from 2006 (when VimpelCom was still based in Russia) to 2012. In another case, California based Sun-Diamond Growers were charged with bribery for giving gifts to Agriculture Secretary, Mike Espy. In his defense, Secretary Espy said since he got the gifts from his friend and lobbyist Richard Douglas, he assumed the gifts were acts of personal friendship. He also said he was not even aware that the gifts were paid for by Sun-Diamond. The Supreme Court ruled that giving gifts to officials does not amount to bribery unless there is an “official act” in return for the gifts and overturned conviction in the case. All factors were in place except for intent. An intent is “a state of mind while committing the act.” This requires a lot of circumstantial evidence to prove the same. The defense used by Espy is one of the two famous ones; the other one being the “It was all needed, or it was a normal process, or no deviation was associated with it.” Although “corrupt intent” while giving or receiving rewards of any kind is an important element to obtain conviction under the FCPA, unintentional acts of bribery can also attract penalties, as in the VimpelCom case. Even when the receiver or the payee is unaware of any actual corrupt activity, he/she is liable for the corrupt actions of any agent. [2] Intent: Key element in bribery Intent is a key element that needs to be established for proof of crime under bribery acts. Generally, corrupt intent, with regard to making or receiving payment in return for a beneficial act favoring the payee, has to be proven to obtain conviction. Whether the official or individual actually accepted the bribe or became corrupt because of it does not matter as far as conviction is concerned. Also, even if only one of the parties involved had corrupt intentions in mind, it is enough for a conviction. [3] The Hobbs Act also addresses public corruption and applies to an official who obtains payment while knowing such payment is in return for official favors or acts. A case in point for “honest fraud” is when Bob McDonnell, former Governor of Virginia was convicted in 2014 on bribery charges. He was charged with accepting US$175,000 worth gifts, loans, and benefits in return for organizing meetings and promotional events for the payee. The Supreme Court, however, overturned this conviction in 2016, holding that organizing meetings or events without doing anything else does not amount to an official act for conviction under 18 USC Sections. The Court also stated that for a conviction, the corrupt act must be a formal exercise of power by the official. [4] Legal and ethical actions for unintentional bribery 2/8
What happens when there are instances of unintentional bribery where an individual or an organization is unaware of the serious consequences? Legal actions Bribery is a punishable offence under FCPA, a federal law in the United States formed to ensure transparency under the Securities Exchange Act of 1934 and covers “bribery of foreign officials.” When an act of misconduct has occurred, an individual must disclose the details voluntarily as soon as they become aware of the misconduct. On November 29, 2017, Rod Rosenstein, then Deputy Attorney General, announced the FCPA Corporate Enforcement Policy, formalizing the “pilot program” of 2016. Companies or individuals who voluntarily disclose violations of FCPA and fully cooperate with investigations, apart from initiating appropriate and timely remedial measures, will not be prosecuted by the Department of Justice (DOJ). The policy encourages voluntary selfdisclosure of misconduct to the appropriate enforcement authorities: A company or individual who has voluntarily disclosed misconduct can get up to a 50% reduction in penalties in case of a criminal resolution. When a company does not voluntarily disclose but fully cooperates with the investigation later, it can benefit from a 25% reduction in fine. To become eligible for these credits: The disclosure should occur before an imminent government investigation or a threat of disclosure. The disclosure should be made promptly as soon as the violation is discovered or the company or individual becomes aware of the same. Disclosure is made of all facts and individuals involved in the violation. A case in point is when New York-based apparel company Ralph Lauren Corporation voluntarily disclosed misconduct within two weeks of the company discovering illegal payments that were made to government officials in Argentina. By doing so, the company avoided prosecution. [6] [5] Ethical actions (an honest mistake) The risks of being penalized are high even when a payment or gift is received or offered without any corrupt intent. It can be difficult to prove lack of intent, and as already said above, the principal is liable for an agent's actions. Ideally, it is important to avoid involvement with any such corrupt situation. If unwittingly part of such misconduct, withdrawing from it as soon as an individual or company becomes aware of the nature of conduct is crucial. If a person can jump though all the aforementioned hoops (i.e., the elements required to be proven for bribery) in order to be proven guilty by the investigator before the case is handed over to a local prosecutor, then it clearly shows that there was enough deviance in the mind of the “innocent” person to have intentionally committed the act, even after knowing all the odds. An honest mistake is a proverb and is no excuse in the legal world. If the prosecutor is unable to prove the direct evidence of an intent, then negligence or gross misconduct, 3/8
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