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Far From Home: How To Seek the Protection of the FCPA When The Cost of Business Abroad is Breaking The Law

As a result of increasing US investment in foreign financial markets, cheaper foreign labor, and a greater foreign corporate presence given intensifying competition for market share from abroad, U.S. companies are flocking to international sites to conduct business, making the Foreign Corrupt Practices Act (FCPA) an increasingly useful tool for whistleblowers abroad faced with the possibility of termination should they object to pressure from their employers to pay bribes to foreign government officials or commit other acts of corruption.   As the US economy is increasingly dependent on on foreign markets, so have US corporations and their employees become more dependent on foreign governments they must deal with in order to conduct business abroad, including countries which require bribes or other unlawful payments as a cost of doing business.

In the late 1970’s, Congress recognized the importance of addressing the lack of remedies for whistleblowers abroad and possibility that their employers would pressure them to engage in corrupt practices as a cost of business and passed the FCPA in 1977 with the intention of preventing US companies and their employees from giving money or “anything of value” to foreign officials to obtain or retain business.  In a nutshell, the FCPA is modeled after the False Claims Act and other qui tam statutes which allow plaintiffs to recover a financial reward from the US government for ba civil enforcement action against US employers who willingly engage in corrupt practices abroad and cooperating with the Department of Justice in any separate civil or criminal enforcement action they may take as well. 

Although the number of FCPA cases and investigations has fluctuated over the past two decades, employment law industry experts are increasingly focusing on high profile FCPA lawsuits and predicting a groundswell of litigation in the near future given recent changes in the law which allow civil “relators” in DOJ or SEC enforcement actions to recover a financial reward and which protect FCPA whistleblowers from retaliation.

Some of the more recognizable illegal activities under the FCPA include bribes given under the fictitious guise of a “commission payment,” “consulting fee,” “marketing item,” “cost of goods expense (including payment of improper travel and entertainment expenses)” or any conspiracy or knowing aid in furtherance of these activities.  Corrupt illegal payments can also include campaign contributions paid in connection with a foreign government.  Even offers made for such payments to foreign officials, party candidates, and representatives can give rise to an FCPA violation. The corrupt payments can be made by U.S. citizens, corporations, business trusts, unincorporated organizations, joint stock companies, or sole proprietorships that have been organized under U.S. law or whose main place of business is predominantly within the U.S. 

If you are an employee and know of or have reasonable belief of a FCPA breach, you can contact the Securities Exchange Commission and retain your anonymity by reporting your information through an attorney. Not only will this ensure that U.S. business transactions continue to be transparent and ethical, but you may also stand to be rewarded by the U.S. government should it decide to bring an enforcement action.  Retaining an attorney will similarly afford you the ability to determine before law enforcement becomes involved if pursuing an enforcement action is worthwhile or not.  The SEC and the DOJ do not litigate every case presented to them by whistleblowers, and navigating the tangled jurisdictional requirements an complicated liability calculation under the FCPA, for all practical purposes, requires the intervention of a lawyer and a law firm experienced with qui tam or whistleblower litigation.  

Christopher Davis is an experienced employment litigator specializing in class actions, overtime wage recovery, discrimination, whistleblower retaliation, and Wall Street bonus disputes. Before entering private practice, Mr. Davis served as an Assistant District Attorney in the Manhattan District Attorney's Office where he prosecuted violent crimes as a member of the Sex Crimes Unit.

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