Last week the Justice Department announced that they were charging twenty-two individuals from thirteen different defense and security contractors with violations of the Foreign Corrupt Practices Act (FCPA). These persons representing the companies had been enticed by an African country offering to buy weapons and equipment for their security forces as long as the company paid a decent “commission” to the official negotiating the contract. The United States has made it clear through the FCPA that the paying of bribes or compensation to foreign officials as a way to get contracts is a serious crime and companies have received stiff punishment.

I discussed this case and its implications with Mr. Will Barry of the law firm Richards Kibbe & Orbe LLP is an expert on compliance for individuals and corporations with the FCPA and practices out of Washington DC. He makes it clear that their has been a shift in focus of the FCPA away from targeting corporations and to their employees. He believes this is being done “because it is a more effective deterrent and because it helps build the cases against the companies those individuals work or worked for.”

In the recent case the employees were not necessarily senior managers or officers of the companies involved but the FCPA “incorporates the concept of “willful blindness.” This concept leads to circumstances where officers might be charged even though they were not actually involved, if they were aware of a high probability that funds would be used for bribing foreign officials.” Furthermore the corporation is also liable to the Securities and Exchange Commission (SEC) as they have pursued “control person” liability in the past. The arrest of these individuals will only allow further investigation and scrutiny of their employers and their potential participation in the FCPA violation.

via Changing The Focus Of The Foreign Corrupt Practices Act | BNET Government Blog | BNET.