SEC Charges Oracle a Second Time for Violations of Foreign Corrupt Practices Act
sec.gov
sec.gov
Edit: This is an honest question. I understand that there can be prosecutorial discretion and that most 'crimes' go un-prosecuted -- I'm not likely to be "caught" for personal bribes. But given that this reached the threshold of administrative attention I'm curious why the DOJ doesn't coordinate efforts with SEC in cases like this.
Different agencies have different powers. SEC can fine you, or even remove you from public companies. I don't think they can jail you.
The only federal laws I can find reference bribes inside America and companies (Ed: or their agents) bribing foreign officials. I guess individual states might have laws but jurisdiction can be an issue.
“It shall be unlawful for any issuer which has a class of securities registered pursuant to section 78l of this title or which is required to file reports under section 78o(d) of this title, or for any officer, director, employee, or agent of such issuer or any stockholder thereof acting on behalf of such issuer, to make use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay, or authorization of the payment of any money, or offer, gift, promise to give, or authorization of the giving of anything of value to--“ https://www.justice.gov/sites/default/files/criminal-fraud/l...
That said, I am not a lawyer so I could be missing something.
If a student bribes their way out a speeding ticket in a foreign country, the laws of that county apply. The US government mostly doesn't care.
this catchy little bit of wisdom has saved me from a lot of trouble
US culture also tends to wink at a lot of what is called "white collar" crime. If whatever you're up to does not involve stealing from specific individuals or rich people, you'll probably get a slap on the wrist. And if you're stealing from the government, a lot of people will commend you, or at least envy you.
The mechanics of an implied terrorist attack after the movie ends aren’t important. You’re complaining about the eagles at the end of LOTR.
Bribery - Illegal - When poor/unconnected people do the same thing
Technically you can have lobbying without corruption, but that is sadly not the reality in Washington.
Basically Pachinko but for bribery.
There is rarely any bushel of cash being given for a direct political favor. Its more so incenstuous lobbying, booking out all of the rooms of the politicians hotels forever, investments in the advisors hedge funds, a high level position at a big company you helped after leaving public office..
So we're clear, things stop being lobbying and start being bribes when they are explicitly quid pro quo.
Why X if Y But A if B
The country where the bribe happens apply whatever local laws and procedures say.
Why do I go to jail for insider trading, but gov officials can exempt themselves from the law and do insider trading "legally"?
Why is working for multiple employers is a contract breach, punishable by law, but board members can sit on multiple competing boards?
Why bribing city officials to direct funds to my pocket company is a crime, but senior execs can have buddies and family members in high rank gov positions that directly affect the business the exec's company?
Because the law is often just a written expression of the will of those who has power over those who doesn't.
The problem with the FCPA is that it inherently provides an unfair advantage to countries where foreign brides are not criminal or never prosecuted. Moreover, it's created a cottage industry of foreign 'consultants' and foreign attorneys, providing plausible deniability for outsourced bribery.
This would be fine if Treasury, Commerce & DOJ put the screws to foreign countries & companies who engage in this misconduct, but the hard reality is they lack the resources to do so, and are far more concerned with politically charged priorities accruing more public & Congressional attention.
Like environmental/climate policy and many other issues... the US is quite happy to disadvantage US businesses in global competition without any substantive effort to level the playing field through extra-territorial enforcement or policy reform.
For example, we should permit statutory safe harbor for foreign bribery if US companies become confidential informants to DOJ, Treasury or Commerce, enabled via a clear and accessible platform for reporting.
Instead, we live in a magical, feel-good, fantasy land in the US, with very little awareness of how the rest of the world really does business.
There's parallels with this happening in the beef industry, where organizations are trying to lower the production of beef for environmental reasons. The result is they're attacking the most efficient beef farmers in the world - because they produce the most beef. If successful, the demand will only be picked up by less efficient farmers elsewhere in the world, causing a worse environmental impact.
Companies and their shareholders never wanted to pay out these bribes, and want these laws, because there is little competitive advantage to be gained by being better at bribing. Over time the laws have been extending to most developed countries, including the whole OECD.
Sure, there are still exceptions, and if you’re a corrupt official, you can still select a Chinese engineering firm and pocket bribes. But it’s those excluded countries that are playing the losing game in the long term, ruining their international reputation and funding unproductive infrastructure projects with debt their own banks will be saddled with.
Incorrect. A company is incentivized to find the cheapest and easiest way to get what they want, and if that way consists of slipping a year's wages to a corrupt official or executive, it has a reason to do it. The net economic loss to other people does not factor into this calculus.
The whole point of quid-pro-quo is that the person giving the bribe expects to receive a benefit that is worth more to them than the cost of the bribe.
The gains go mostly to a few corrupt executives who get a bigger bonus, and the corrupt foreign officials. Perhaps a few unscrupulous privately held companies would prefer scrap the laws as well, but the reason the laws exist are because they are broadly seen as good for business by most players.
Yes, and thus the shareholders have pushed forward anti-bribery initiatives: https://www.weforum.org/communities/partnering-against-corru...
Also, some businesses benefit a lot more from corruption than others. Resource extraction firms, for instance.
- Difference between laws and enforcement of laws.
- Endemic corruption that cares nothing for long-term losses.
- Shareholder emphasis on short-terms financial results and utter disinterest in long-term results or compliance (unless it impacts short term stock price).
- And, most importantly, global competition and how some foreign countries permit or encourage bribery to advance strategic interests.
You live in the fantasyland I described in my earlier comment.
Sure, there still are places like Russia that operate within a Machiavellian worldview, but most of the world has now recognized the value of fair systems that lead to win-win outcomes.
They do, but they level the playing field in other ways:
"That's right, my continental friends, we have spied on you because you bribe. Your companies' products are often more costly, less technically advanced or both, than your American competitors'. As a result you bribe a lot. So complicit are your governments that in several European countries bribes still are tax-deductible.
When we have caught you at it, you might be interested, we haven't said a word to the U.S. companies in the competition. Instead we go to the government you're bribing and tell its officials that we don't take kindly to such corruption. They often respond by giving the most meritorious bid (sometimes American, sometimes not) all or part of the contract. This upsets you, and sometimes creates recriminations between your bribers and the other country's bribees, and this occasionally becomes a public scandal. We love it."
Why We Spy on Our Allies
By R. James Woolsey, a Washington lawyer and a former director of central intelligence.
https://www.justice.gov/usao-nj/pr/novartis-ag-and-subsidiar...
https://www.justice.gov/opa/pr/ericsson-agrees-pay-over-1-bi...
It is the view of the current set of people in law enforcement that the United States government has jurisdiction over any person who participates in transactions using dollars.
The other side of this is offering a bribe to an honest government official: Let them take it (and turn it over to law enforcement) and then turn in the payer.
In both those cases, it’s now riskier to solicit/offer bribes.
If it was 1 Billion per offense (+ court costs), maybe Oracle would change
I sat through so many anti-bribery training lessons over the years, I'm convinced companies use these to limit liability and scope the blame to the small guys. "But they were trained and should have known better."
Investigate, find the source, prosecute.
Good point. Why are sentence times stacked for people, but not corporations? Corporations are people, too!
Liquidate all assets via public auction, zero out all stocks, and jail C levels for X days for violations of the public trust.
Make it *painful*.
These seems like it could still be a profitable position over 5 years given the size of Oracles contracts, no?
Of course it's wrong but it's very easily rationalized by psychologically normal people.
If the goal is to actually stop this kind of bribery, we should give whistleblowers a 20% reward of the penalties. In other words, we should legally bribe people into reporting illegal bribery because bribery works.
https://www.phillipsandcohen.com/sec-and-cftc-whistleblower-...
I can't believe there aren't people at Oracle that would have happily collected on it. Or maybe that's what happened here.
The only interesting question in these SEC settlements is where the funds go?
Here you go. If the fine was significantly more wouldn't Oracle either fire people or raise prices? That only punishes people who had nothing to do with the crime
Yes, obviously we can control what happens within our borders and we can stretch that and say it applies to US incorporated companies, but it certainly is overreach to apply US law to foreign subsidiaries.
The aggrieved country where the violation happened should be the one who has jurisdiction over these issues, not the law of a foreign country. I think we used to call this “imperialism”.
I suspect there are some interesting histories of the 1910s through 1950s where foreign development by oil companies led to spiraling corruption practices, for example.
https://en.m.wikipedia.org/wiki/Foreign_Corrupt_Practices_Ac...
I'd say the effect sought to be achieved is pretty much opposite of imperialism. In imperialiam (as demonstrated by various histories), colonizer citizens get away with pretty much anything in the colonized countries. FCPA levels the playing field by making colonizers liable in the home country.
Also the idea you can be on a level playing fields with citizens in certain countries without bribery is just laughable. The common citizen bribes in a number of third world countries just to get routine service, and if you don't bribe you're left pragmatically a sub-citizen status.
>Chesterton's Fence principle
Exactly. One should study why bribery is often necessary to even be a 'level' participant on the playing field before assuming anyone bribing is a 'colonizer.'
There’s also a duress exception, like if they start arbitrarily arresting your employees you are allowed to pay to get them out. This is basically what happened to Halotel and Viettel in Tanzania.
Does the word imperialism mean controlling or replacing the governments of other countries in order to extract value for the mother country anymore, or is it always going to be an insulting incoherent woke metaphor about telling women how short their skirts can be and how they deserved it from now on?
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edit:
Child labor for me and not for thee, maybe: if I punish a US businessman for their open preference for importing products produced with child labor, am I imposing my values on the sources?
If a US businessman opens factories in other countries that employ actual slaves, should the businessman be commended for his cultural sensitivity and openness (and contribution) to the labor practices of other cultures?
Should the US government itself operate by different rules outside its borders? Is a US citizen only deserving of due process until they step over the border, where they can be summarily executed?
There are a lot of obvious questions that can be asked about your position. My curiosity is about whether you allow yourself to ask them, or if you just stop asking questions when you reach the conclusion you prefer.
To your later point, we do this all the time. We apply labor laws within US jurisdiction but we do not care if people/companies/governments in India or China use child labor in the manufacture of goods and services --with rare exceptions.
I would be totally for enforcing this prohibition on imported goods and services. At the same time we have no right to tell India and China what they should allow and not allow there within their borders.
I think we should be cognizant that the concept of child labor is a modern western concept --it's something those countries will discover on their own in due time. Enforcing our morals has the potential of making the lives of locals _worse_: their mother, father, siblings may starve because of lack of social services and incapacity of parents/siblings.