FCPA Legal Definitions and Enforcement Overview

In short, while the FCPA does not cover every type of bribe paid around the world for every purpose, it does apply broadly to bribes paid to help obtain or retain busi- ness, which can include payments made to secure a wide variety of unfair business advantages.” What Does “Corruptly” Mean? To violate the FCPA, an offer, promise, or authori- zation of a payment, or a payment, to a government offi- cial must be made “corruptly:’”* As Congress noted when adopting the FCPA, the word “corruptly” means an intent or desire to wrongfully influence the recipient: The word “corruptly” is used in order to make clear that the offer, payment, promise, or gift, must be in- tended to induce the recipient to misuse his official position; for example, wrongfully to direct business to the payor or his client, to obtain preferential legis- lation or regulations, or to induce a foreign official to 75 fail to perform an official function. Where corrupt intent is present, the FCPA prohibits paying, offering, or promising to pay money or anything of value (or authorizing the payment or offer).”* By focus- ing on intent, the FCPA does not require that a corrupt act succeed in its purpose.” Nor must the foreign official actually solicit, accept, or receive the corrupt payment for the bribe payor to be liable.’ For example, in one case, a specialty chemical company promised Iraqi government officials approximately $850,000 in bribes for an upcoming contract. Although the company did not, in the end, make the payment (the scheme was thwarted by the US. govern- ment’s investigation), the company still violated the FCPA and was held accountable.” Also, as long as the offer, promise, authorization, or payment is made corruptly, the actor need not know the identity of the recipient; the attempt is sufficient. Thus, an executive who authorizes others to pay “whoever you need to” ina foreign government to obtain a contract has violated the FCPA—even if no bribe is ultimately offered or paid. The FCPA: Anti-Bribery Provisions What Does “Willfully” Mean and When Does It Apply? In order for an individual defendant to be criminally liable under the FCPA, he or she must act “willfully?®! Proof of willfulness is not required to establish corporate criminal or civil liability,” though proof of corrupt intent is. The term “willfully” is not defined in the FCPA, but it has generally been construed by courts to connote an act committed voluntarily and purposefully, and with a bad purpose, i.e., with “knowledge that [a defendant] was doing a ‘bad’ act under the general rules of law.’*? As the Supreme Court explained in Bryan v. United States, “[a]s a general matter, when used in the criminal context, a ‘will- ful act is one undertaken with a ‘bad purpose. In other words, in order to establish a ‘willful violation of a statute, ‘the Government must prove that the defendant acted with knowledge that his conduct was unlawful’”™ Notably, as both the Second Circuit and Fifth Circuit Courts of Appeals have found, the FCPA does not require the government to prove that a defendant was specifically aware of the FCPA or knew that his conduct violated the FCPA.® To be guilty, a defendant must act with a bad pur- pose, ie., know generally that his conduct is unlawful. What Does “Anything of Value” Mean? In enacting the FCPA, Congress recognized that bribes can come in many shapes and sizes—a broad range of unfair benefits*’—and so the statute prohibits the corrupt “offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to” a foreign official.” An improper benefit can take many forms. While cases often involve payments of cash (sometimes in the guise of “consulting fees” or “commissions” given through intermediaries), others have involved travel expenses and HOUSE_OVERSIGHT_022516