FCPA

Foreign Corrupt Practices Act. In most of our islands, our Attorneys-General are political. Many of our countries have no Director of Public Prosecutions. The Attorney-General then decides who should be prosecuted and who should be excused. He is not supposed to show any favouritism. He is supposed to not maliciously prosecute those who oppose the government. The Constitution says he is to act independently of political influence. So is the DPP, where one exists. But, what is written and what happens in the real world have ever been two different things. It is not that our officials are necessarily biased. The real problem is lack of initiative and zest for the job. Most of us in the West Indies have given up on any expectation that our prosecutors will bring the full force of the law down on any public figure who breaks the law. We understand their problem, and shrug our shoulders. Our A-Gs sit in Cabinet and socialize with Ministers and Members of Parliament. They deal on a daily basis with, and develop ties to, other high officials in government. From Barbados to the Bahamas, the story is the same. Our officials just keep getting richer and richer, despite their limited salaries. And, our prosecutors sit on their hands and say it is nothing to do with them.

Relief may yet come from an unusual angle. Corrupt as much of the public administration in the USA is, they do have some good laws. And, they have some prosecutors who are not afraid of anyone in the West Indies. One of the US laws that we pin our hopes on is the Foreign Corrupt Practices Act. This Act is enforced by the Department of Justice, which boasts some notoriously courageous prosecutors.

The Act is not new. It was originally enacted thirty years ago. It prohibits the bribery of foreign government officials by US persons and companies. The term “foreign official” includes people we do not normally think of as being an official, such as a foreign political party or a candidate for political office.

The history of this Act is well known to those of us of a certain age. The US Securities and Exchange Commission conducted investigations in the late 1970s. Over 400 US companies admitted to making questionable or illegal payments in excess of US$300 million to foreign government officials. The abuses ran the full gamut. They included bribery of high foreign officials to secure some type of favourable action by a foreign government. There were also so-called facilitating payments that were made to ensure that government functionaries discharged certain ministerial or clerical duties. The idea for the Act was to bring a halt to the bribery of foreign officials. This was meant to restore public confidence in the integrity of the US business system.

The FCPA has its own blog which you can access by clicking here. There are several cases discussed. They include payments made by a Westinghouse subsidiary in India, and a Hollywood movie producer in Thailand. Even non-US companies are caught by the Act, where their securities are issued in the USA. Prosecutions have been brought in the USA against Vetco Gray UK Ltd, Akzo Nobel NV, and Statoil ASA. Other targets have included such well-known international companies as Siemens AG, BAE Systems, AstraZeneca PLC, Total SA, Nordsk Hydry ASA, Alcatel SA, and Petro-Canada. One of the most recent targets has been Lucent Technologies Inc. In December 2007, it agreed to settle a case brought against it and to pay fines and penalties of US$2.5 million for having paid for the travel of Chinese officials to the USA. The offence it committed was to improperly record the travel expenses of the officials in question.

Not all corrupt payments are punishable under the Act. It is only an offence to bribe a foreign government official for the purpose of obtaining business. There are limits to its effectiveness. Not included are bribes paid to persons who are not governmental officials. In Anguilla, that might exclude health personnel and the public utilities. More worrying is that payments made to expedite the performance of routine government action also escape. This would include obtaining permits or licences, processing official papers, clearing goods through Customs, or providing police protection. Another available defence is to show that the payment is lawful in accordance with the written laws of the recipient country. You might also escape by showing that the payment is a reasonable expense directly related to promotional activities. So, giving gifts to a school or to a local hospital would not count as a bribe. Gifts of computers to the police force, or of a jeep to the Customs Department for turning the head the other way, would be exempt.

The FCPA is not perfect. But, until we adopt strong and effective anti-corruption laws of our own, and until we appoint courageous and independent prosecutors, we in Anguilla shall have to rely on foreign assistance of this type if we are to have any chance at all of stopping foreign companies attempting to corrupt our own officials.