Foreign Corrupt Practices Act Violations

In today’s world, trust in our public officials and the offices they uphold is more in question than perhaps any other time in the nation’s history. Although there are very well-established laws in place to prevent corruption hold those who break these laws accountable to the full extent of the law, corruption nevertheless occurs. If you have reason to believe that a supervisor, fellow employee or anybody else has broken any such law, like the Foreign Corrupt Practices Act, and you wish to become a whistleblower, contact an experienced attorney from Altman & Altman LLP right away.

Enacted in 1977, the Foreign Corrupt Practices Act (FCPA) was designed to outlaw and create penalties for bribing public officials. More specifically, the FCPA outlaws the payment of money, gifts, or offering to give money or a gift in for the purpose of influencing a foreign official to use their office or power in order to obtain, retain, or direct business. In addition, the act makes it unlawful to bribe a foreign political party or a candidate running for office in another country.

The reach of the FCPA is great, as it applies to any country in the world and includes actions not only of companies, but of the officers of the company, directors, employers, stockholders, and even agents such as consultants, and distributors.

In addition to prohibiting bribery, the FCPA also requires businesses to maintain accurate records and create and maintain a sort of internal affairs. The internal affairs requirements ensure that businesses are doing some self-policing in order to ensure that assets are accessed and accounted for in a way that management of the company authorizes, which will also help to prevent any unlawful, fraudulent activities from going unnoticed behind the closed doors of a public company.

While the language of the FCPA may seem straightforward, there are several exceptions or affirmative defenses built into the statute. For example, the statute does not apply to routine government action. In addition, there are two affirmative defenses carved into the statute.

First, if the payment, gift, or offer was given in accordance with the laws of the country in question, the act does not fall within the purview of the FCPA. If an action simply raises suspicions of a Foreign Corrupt Practices Act, it does not necessarily mean the action in question is in violation of the law.

Second, if the payment, gift, or offer was a reasonable expenditure, then the action is not illegal. Reasonable expenditures include, but are not limited to, travel and lodging expenses, expenses incurred for the promotion or demonstration of products, or expenses incurred in the execution of a contract with a foreign government or agency. Being able to legally differentiate and demonstrate allowed expenditures is a critical component of bringing forth an FCPA allegation.

Seeing wrongdoing occur and being an active part of trying to bring those responsible to justice is a noble goal, and one that we will viciously protect at Altman & Altman. Thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in 2010, whistleblowers enjoy federally mandated protections against workplace retaliation and other potential pitfalls of speaking up for what’s right.

In addition to being the right thing to do, those who bring forward cases through whistleblowing that lead to sanctions can recover as much as 30 percent of the monetary value of those sanctions for their help. Depending on the size of the violation, this can be quite the reward. However, it is important to have all evidence in order prior to bringing a FCPA violation forward – which is where our expert attorneys with more than 50 years of experience will be able to help.

The penalties for a violation of the FCPA can be severe. For those that violate the act and are a juridical person, the fine can be anywhere up to two million dollars. Any other person who violates the act faces a fine of up to $100,000 in addition to a prison sentence of up to five years.

In addition to monetary penalties, in some cases injunctive relief is appropriate. According to the language of the statute, the Attorney General can bring the case in an appropriate court and be given a temporary restraining order if he or she suspects a violation of the act is about to occur. This temporary restraining order could easily turn into a permanent injunction, keeping the person or company from ever performing the act in question. Further, the Attorney General is given the power to subpoena records and testimony from members of a business, and a failure to comply with the subpoena mean the person will be in contempt of court.

If you have evidence of a FCPA violation or suspect that one has occurred, contact us online or call for a free consultation today at 617-492-3000 or toll-free at 800-481-6199.