Ignoring the Technicality's Temptation: Interpreting the Citizenship of a Foreign Official under the Foreign Corrupt Practices Act

By Grant, Elizabeth | American University Business Law Review, July 1, 2013 | Go to article overview

Ignoring the Technicality's Temptation: Interpreting the Citizenship of a Foreign Official under the Foreign Corrupt Practices Act


Grant, Elizabeth, American University Business Law Review


The Foreign Corrupt Practices Act ("FCPA") prohibits bribing "foreign officials," but it does not define the word "foreign" or give any guidance to what citizenship the official must have to fall under the FCPA. Adding to the difficulty when defining "foreign," the recent rise in prosecutions and increased FCPA case law has failed to produce an obvious answer as to how a court should address these issues. This makes it harder for businesses to comply with the FCPA or, in the alternative, obtain favorable deferred prosecution agreements. This Comment argues that, while the FCPA excludes those with U.S. citizenship from being "foreign officials" to protect defendants from an ambiguous criminal statute, businesses should structure compliance programs to treat "foreign officials" as including those with U.S. citizenship. Section I of this Comment traces the evolution of the United States' anti-bribery obligations. Section II analyzes courts' divergent readings of the FCPA and the problem this creates for interpreting whether "foreign" implies that the actor must be a non-U.S. citizen to constitute a "foreign official." Section III identifies how a court would use past approaches to interpret the term "foreign" to include actors with U.S. citizenship, but ultimately would adopt a defendant's narrow definition under the rule of lenity. It then argues that businesses should consider this loophole nonexistent for compliance program purposes. The Conclusion places this issue within the current debate over narrowing the FCPA's terms, determining that it shows the need for statutory clarification and reform to better allow businesses to comply with the law.

INTRODUCTION

On paper, the United States criminalizes bribing "foreign officials,"1 but despite clear evidence, some instances of bribery have escaped prosecution.2 In June 2012, R. Allen Stanford stood trial for running an investment fraud scheme.3 At trial, a witness recounted that Stanford bribed an Antiguan bank regulator, Leroy King, as part of his actions to support the Ponzi scheme.4 Although King may have qualified under the Foreign Corrupt Practices Act ("FCPA") as a "foreign official" because he was an instrumentality of another state, U.S. officials chose not to charge Stanford with a FCPA violation.5 Richard Cassin, a FCPA expert, inferred that Stanford escaped charges because King maintained dual citizenship with the United States and Antigua and Barbuda, West Indies.6

This situation presents particular difficulty for businesses that operate overseas because unpredictable application of the FCPA hinders compliance with the law.7 The Stanford case could indicate relaxed FCPA enforcement by the United States,8 or it could mean that the United States interprets the FCPA's "foreign official" to mean a non-U.S. citizen.9 Although a business could operate under the assumption that the United States interprets "foreign official" to include only non-U.S. citizens, the business would do so at the risk of preparing an inadequate compliance program and potentially violating the statute.10

When looking for a citizenship requirement, there is little tangible legal guidance for businesses to follow.11 The FCPA specifically criminalizes the bribery of "foreign officials," making it unlawful for a business and its agents to offer payment, promise to pay, or authorize the payment of anything of value to any foreign official or foreign political party.12 Additionally, the payments must be made for purposes of influencing any act or decision of the official or political party to obtain or retain business of the payor.13 The statute defines "foreign official" as "any officer or employee of a foreign government or any department, agency, or instrumentality thereof" without specifically defining "foreign" to mean a non-U.S. citizen.14 While cases have analyzed the meaning of other aspects of the statutory definition of "foreign official,"15 courts have yet to decide on the specific citizenship requirements of a "foreign official," leaving businesses without a concrete answer as to what constitutes a FCPA violation. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Ignoring the Technicality's Temptation: Interpreting the Citizenship of a Foreign Official under the Foreign Corrupt Practices Act
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.