“For these packages to
be admitted into our country, you need to pay me in U.S. dollars,
$100 per box. Please put the cash in this envelope.” Most planners
wouldn’t be approached so brazenly to grease the palm of a customs
official -- but it could happen.
This is bribery, defined by Black’s
Law Dictionary as “offering, giving, receiving or soliciting
any item of value to influence the actions of an official or other
person in the discharge of a public or legal duty.” And it is
One of the biggest recent cases took
place in Kazakhstan, an oil-rich former member of the Soviet Union.
A government official demanded that a U.S. company hire a certain
consulting firm to usher a bid through a governmental process; the
U.S. company also was asked to pay the consulting firm a 3 percent
commission on profits earned on the business the company conducted
in the country. Under duress, the U.S. company agreed to pay a 2
percent commission to the consulting firm.
Through a plea bargain, a fine of $44
million in civil and criminal penalties was levied against the U.S.
company for agreeing to pay the bribe. If the case had gone to
trial, that number might have been more than $70 million, and
somebody might have gone to jail.
Risks and Reality
One constant complaint of planners is
the inability to move materials through foreign customs and the
difficulty of navigating the immigration process to get visas.
Increasingly, U.S.-based companies will
hide behind a third party, usually based in the country where the
event will be held, to “handle the situation.” This ploy poses
substantial potential liability, especially with the Justice
Department eager to prosecute transgressors via the Foreign
Corruption Practices Act (FCPA).
Bribes come in many guises -- as gifts,
contributions to “charities” and any other coercion used to ensure
a favorable result. Often, such practices take the form of a
gratuity for services rendered. As the FCPA allows for “expedition”
and facilitation of routine activities and services such as
paperwork to get licenses, etc., there must be a corrupt intent on
the part of the party making the payment to satisfy the definition
of bribery (the FCPA covers only payments to government officials,
political parties or candidates for office).
One can turn to the Department of
Justice for advice. In one such case, an association was unsure
whether its offer to pay domestic expenses for a trip to the United
States by six officials of a foreign government for an educational
program would constitute a bribe to those officials.
The association was not offering to pay
any expenses related to the travel to or from the States. The
decision as to who would come on the trip would be made by the
foreign government. The association would pick up the expenses to
host just the officials and not their spouses or family members,
and it would pay all costs directly to the providers of those
services, not to any individuals. Certain gifts such as tote bags
would be given but would be of nominal value.
The DOJ viewed the proposed expenses as
reasonable under the circumstances. However, the agency is not so
generous when the gross payments are made directly to an individual
and not to a service provider.
In all cases in which you might be
confronted with paying someone for something “unusual” that should
be a simple matter, be sure you conduct a thorough review. Here,
competent legal advice is not only worth the price, but it will be
invaluable if it keeps you out of jail.
Jonathan T. Howe,
Esq.,is a senior partner in the Chicago, St.
Louis and Washington, D.C., law firm of Howe & Hutton Ltd.,
which specializes in meetings, travel and hospitality law. Legal
questions can be e-mailed to him at firstname.lastname@example.org.