16 May 2011

Last week, a Californian company together with its CEO and CFO were the first to be convicted under the (US) Foreign Corrupt Practices Act.  The company had used an agent to get information from an official in a Mexican power supplier with which it hoped to do business.  The official had been rewarded for the information with a US$1.8m yacht, a Ferrari Spyder costing US$297,500  and had more than US$170,000 paid off his credit card.

The jury in a five week trial heard how more than US$19 m of business flowed from the arrangement with about US$5m being paid straight back to the agent. The company officers, who could be sentenced to 30 years imprisonment, claim they didn’t know their agent was passing his remuneration to the official. The jury accepted that the payments were intended as bribes. The agent, who has been in custody for nine months, was convicted of money laundering which carries a penalty of 20 years. Her spouse wanted also for money laundering and other charges, did not appear for the trial

A US Assistant Attorney General said the guilty verdicts were an important milestone. “Foreign corruption undermines the rule of law” … “we are fiercely committed to bringing to justice all the players in these bribery schemes – the executives who conceive of the criminal plans, the people they use to pay the bribes, and the companies that knowingly allow these schemes to flourish.

“Bribery is not a victimless crime,” It has real consequences.  “Not only does it damage citizens’ confidence in their own government, it also damages the integrity of the global marketplace.” … “Bribery, wherever it occurs, will carry the potential cost of criminal prosecution, hefty fines and prison terms.”

Under the New Zealand Crimes Act s105C  Every one is liable to imprisonment for a term not exceeding 7 years who corruptly gives or offers or agrees to give a bribe to a person with intent to influence a foreign public official in respect of any act or omission by that official in his or her official capacity (whether or not the act or omission is within the scope of the official’s authority) in order to—

  •  obtain or retain business; or
  •  obtain any improper advantage in the conduct of business.

www.justice.gov/opa/pr/2011/May/11-crm-596.html

www.legislation.govt.nz/act/public/1961/0043/latest/DLM328761.html

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