Half-a-mil as a good will gesture? Nah. Sounds like a bribe to me.
Posted on 06/19/2007 6:45:53 PM PDT by Libloather
Nigeria: Jefferson/Atiku - Where Does Facilitation End And Bribery Begin?
This Day (Lagos)
COLUMN
18 June 2007
Posted to the web 19 June 2007
Ayuli Jemide
Lagos
The recent bribery allegation involving United States Congressman Jefferson and Nigeria's former Vice President, Abubakar Atiku, brings to the fore the mine fields that any transactional lawyer may have to navigate in acting as a midwife for a foreign investment type transaction or acting for a multinational under a strict anti-corruption regiment.
How serious is the global village about bribery in the market place?
The United States Federal Corrupt Practices Act ("FCPA") 1977 has anti-bribery provisions that say as follows:
- It is unlawful for a US person or business to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business. This prohibition covers bribes made through an intermediary.
- A foreign incorporated subsidiary of a US company will NOT be liable under the FCPA, but its US parent company may be liable if it participates or has knowledge of such bribery. Also a US national employed by the foreign incorporated subsidiary may be liable under the FCPA in his personal capacity.
- The criminal penalties are a maximum of 25 million USD fine for businesses and 5 million USD for individuals or up to 20 years imprisonment.
- It includes paying, offering, promising to pay money or anything of value. Anything of value has been interpreted by US courts to mean anything of tangible or intangible benefits that the receiving party believes to be of value including loans, promises of sex, stock shares, and information. UNITED STATES v GORMAN.
The OECD (Organization for Economic Co-operation & Development) in 1997 passed a Convention on Combating Bribery of Foreign Officials in International Business Transactions signed by 36 countries that are in various stages of changing their local legislations to comply with the Convention. Nigeria is not on this list and South Africa is about to sign on - the first African country to do so.
What does this portend for a transactional lawyer in Nigeria?
Given that the war against corruption is gaining wind in Nigeria and the world is increasing the pace of Corporate Governance, every lawyer should have enough knowledge about Corporate Governance (bribery in particular) to service foreign clients in Nigeria as we currently know it.
Some of the key points to note are as follows:
1. Ask for an Ethical Roadmap
Many foreign companies have an Ethical Roadmap - an in-house manual for processes that help to avoid bribery scandals. If you represent such a client it is imperative that you request a copy of their ethical roadmap to see how your acting for them may be aligned with their roadmap.
2. Understand the rules on Facilitation Payments
In this regard you may want to discuss "bribes" you have had to give to facilitate a job that can be traced to your client. You should be upfront with clients and obtain their consent to give some forms of "facilitation" fees.
Interestingly the FCPA in 1988 was amended (perhaps in line with the realities of dealing in the Third World) to provide for an explicit exception to the bribery prohibition which is called "Facilitation payments for routine governmental action".
This exception effectively permits companies to make modest payments to low-ranking government officials, to speed up or secure the performance of something that a party is already entitled to obtain. Routine Governmental action as defined in the Act includes obtaining a permit, licence, processing governmental papers, providing police protection, mail pick up, scheduling inspection, providing phone service, power and water supply, loading and unloading cargo and such.
These examples of situations where we MUST "pay to facilitate" in Nigeria are so spot-on that I tend to think that the drafters of the FCPA amendment sought Nigerian advise or have lived in Nigeria. It is interesting how the law lowers the bar in a bid to carry out a reality check.
The question to ask in this kind of situation, as a lawyer representing a foreign entity, is whether the payment aids the process for something that a client is "already entitled to obtain". I daresay, it is a thin line as sometimes it may be the "facilitation" that determines the subjective decision of the "Officer in Charge" as to whether your client is entitled to obtain that service. I am sure you know what I am talking about!
3. Understand culpability under the home country laws
There are many situations where the foreign company may carry out a transaction in Nigeria and be criminally liable under the law of its home country. One should therefore understand the applicable anti-bribery laws of the home country to help the client "navigate" safely without being exposed to prosecution from the home country. For example the US Federal Corrupt Practice Act earlier mentioned may allow the US court to assume jurisdiction in certain cases where the actual bribery took place outside the US provided there is some connection to the United States.
For example, in UNITED STATES v DAVID H MEAD the US department of Justice considered that subject-matter nexus was satisfied by proof that the defendant sent an email from New Jersey to Panama in furtherance of the bribing scheme. In SEC v ABB LIMITED, SEC alleged that the jurisdictional means was satisfied in part, because the company wired at least US100,000 earmarked for illegal payments through a US bank account.
The OECD Convention in Article 4, enjoins each member country that has jurisdiction to prosecute its nationals for offences committed abroad to take such measures as may be necessary to establish its jurisdiction and to do so in respect of the bribery of a foreign public official, according to the same principles.
4. Establish clear client accounts if funds need to be passed through your firm.
Where a transaction at some point requires monies to be routed through your firm's account as a lawyer representing a foreign entity, it is advisable to establish separate client domiciliary accounts for such inflows. In the "unlikely" event of an investigation these separate accounts are scrutinized without offending your privacy.
Conclusion
Let us go back to the Jefferson/Atiku scandal. Representative William Jefferson called the package he allegedly delivered at midnight to the suburban Maryland home of Nigeria's Vice President "African art." Authorities say the "art" was meant to be cash - lots of it. The money was part of $500,000 Atiku (former Nigerian Vice President) allegedly sought in return for helping smooth the way for a technology venture in Nigeria that was arranged by Jefferson.
Atiku also reportedly wanted a large stake of the profits from the new business. Does it make any difference to the case whether it was art or cash?
- Ayuli Jemide, is a Partner with Detail Solicitors
Half-a-mil as a good will gesture? Nah. Sounds like a bribe to me.
“Culture of corruption”...Nancy Pelosi
Somewhere between the time when you accept the payola and when you stick it in the freezer.
William Jefferson go directly to jail. Do not pass GO.
Where Does Facilitation End And Bribery Begin? Apparently the fridge is a good place to start the hunt ;’}
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