Mention of the Foreign Corrupt Practices Act, or FCPA, may evoke powerful images of unmarked envelopes stuffed with cash handed surreptitiously to officials in a foreign land. 

But utterance of FCPA is just as likely to conjure up images of long hours in windowless conference rooms listening to an anti-bribery compliance training. Companies are spending millions on compliance and certification programs. So why all the fretting, training and certifying?

In a word, enforcement. The Department of Justice has greatly ramped up the number of investigations and prosecutions in recent years. This aggressive approach is reflected not only in increased prosecutorial activity, but also in the Department’s expansive reading of operative terms in the statute. 

One of the statutory terms that the Justice Department has chosen to read with great breadth is the FCPA’s requirement for liability that there be conduct “in furtherance of” an “offer, payment, promise to pay or authorization of” an improper payment to a foreign official. The plain language of the statute makes it clear that far less than a consummated bribe is needed to satisfy this standard. But in addition, as illustrated by the examples to follow, the Justice Departments aggressive interpretation of the “in furtherance of” requirement means that even conduct that is arguably quite attenuated from any payment, offer or authorization of an improper payment may result in criminal law consequences. 

The statute breaks potential defendants into three categories: “issuers,” or companies registered with the SEC; “domestic concerns,” or U.S. companies and citizens; and “persons,” which encompasses foreign individuals and foreign non-SEC registered companies. “Issuers” and “domestic concerns” are liable if they use the mail or other instruments of interstate commerce “in furtherance of” an improper payment; “persons” are liable if they commit any act “in furtherance of” such a payment, regardless of whether interstate commerce is employed, if the act is committed within U.S. territory. 

The plain language of the statute, therefore, suggests that there should be a close nexus between the triggering act and the improper payment: the use of interstate commerce or other act must specifically be “in furtherance of” the improper payment. This is not, however, the Justice Department’s view. It is worth noting that reading the “in furtherance of” clause broadly has the greatest impact in those instances where the conduct relating to the improper payment occurs principally outside the United States-such as where the payment principally arises from the acts of a U.S. company’s foreign subsidiary acting in another country. In such a situation, the more broadly the “in furtherance of” clause is read, the more likely the U.S. company will be deemed to have liability. 

The 2002 Syncor Taiwan matter provides an apt case study of the Justice Department’s approach. Defendant Syncor Taiwan, Inc., a foreign company and “person” under the statute, pled guilty to paying improper “commissions” to physicians in Taiwan to induce them (the doctors were deemed to be government officials because they worked for state-owned hospitals) to refer their patients to Syncor’s medical imaging centers. A company budget included a line item for “promotional and advertising expenses” based on funds allocated for the improper payments. The Justice Department deemed the act of emailing the budget from California to Taiwan to itself constitute an act within the United States “in furtherance of” those payments. 

And, in a 2008 case, the government arguably went even farther. In AGA Medical Corporation, the defendant, a medical device manufacturer, charged as a “domestic concern” voluntarily disclosed that it had engaged in a scheme to make corrupt payments to doctors and patent agents in China. The Justice Department deemed the shipping from Minnesota to China of the products sold to the Chinese hospitals or approved by the patent agents to be an act “in furtherance of” the corrupt payments. 

Perhaps the Justice Department took this view because the scheme involved a “commission” (or improper payment) per item arrangement with respect to the doctors, or because the product had to be in the hands of the patent officers before they could approve the patents. And while the Justice Department’s criminal information also listed email communications concerning the payments, the AGA Medical Corporation case continues-and, if anything, expands upon-the Justice Department’s broad view of the “in furtherance of” standard. Indeed, in similar situations in the past, federal authorities honed in exclusively on communications and financial transactions relating directly to corrupt payments, but not on the shipment of the underlying goods. In U.S. v. Control Systems Specialist, Inc., et al., a 1998 case, the information alleged that the company bribed a Brazilian Air Force colonel and listed checks drawn on U.S. banks, the issuance of invoices and communications as being “in furtherance of” the payment. However, the information made no mention whatsoever of the shipment of the military equipment as an act “in furtherance of” the corrupt payments.   

If emailing a budget or shipping a product is “in furtherance of” an purpose of the mailing is to lull the victim into believing that the promised services are being performed. 

To Understand How Far These Statutes Reach, Consider That a Mailing to a Fraud Victim, Even After the Victim’s Funds Have Already Been Obtained, Will Support a Charge if the Purpose of the Mailing Is to Lull the Victim Into Believing That the Promised Services Are Being Performed.

The language of the wire and mail fraud statutes is broader on its face than the language of the FCPA; the former encompasses any acts that further the “scheme”; the latter requires the act to be related to a specific payment (or offer, promise or authorization). Nonetheless, it is apparent that federal prosecutors would read them as having equal breadth. 

Reading the FCPA’s “in furtherance of” standard as broadly as the analogous component of the mail and wire fraud statutes represents an aggressive assertion of federal enforcement power. Arguably, such a reading is broader than Congress intended. That question has yet to be litigated in the courts. The improper payment, one might well ask how attenuated the connection to the payment must be before it is deemed to fall outside the scope of the statute. The answer is almost certainly that the Department of Justice would read the FCPA standard as broadly as the analogous, yet differently worded, standard for wire and mail fraud. 

The wire and mail fraud statutes also criminalize conduct that is “in furtherance of” the unlawful aim. Unlike the FCPA’s requirement that the act specifically be in furtherance of a “payment” (or offer, etc.), however, these statutes require only that the act be in furtherance of a fraudulent “scheme.” Courts have historically interpreted the mail and wire fraud requirement as encompassing any use of the mail or wire in connection with such a scheme. To understand how far these statutes reach, consider that a mailing to a fraud victim, even after the victim’s funds have already been obtained, will support a charge if the Department’s view nonetheless has important implications for companies seeking to comply with the FCPA. While the Department frequently relies on wire and mail fraud charges alongside, and sometimes in lieu of, FCPA charges, not all foreign bribery cases are susceptible to being characterized as wire or mail fraud. Companies must consider how federal enforcement authorities will view the question of what constitutes conduct “in furtherance of” an improper payment if they wish to minimize their FCPA risk. 

Joseph P. Covington is a partner in Jenner & Block’s Washington, DC office. He co-chairs the Firm’s Government Contracts Practice Group and leads the Firm’s Foreign Corrupt Practices Act practice.  Iris E. Bennett is also a partner in Jenner & Block’s Washington, DC office and is a member of the Firm’s White Collar Criminal Defense and Counseling Practice and Foreign Corrupt Practices Act practice. Martina E. Vandenberg is an associate in Jenner & Block’s Washington, DC office and is a member of the Firm’s Litigation Department and Foreign Corrupt Practices Act practice.