Bribery in the United States

Bribery Definition

At common law (in the English Legal System). The receiving or offering any undue reward by or to any person whomsoever, whose ordinary profession or business relates to the administration of public justice, in order to influence his behavior in office, and to incline him to act contrary to his duty and the known rules of honesty and integrity. The term bribery now extends further, and includes (according to the definition of Bribery based on the Cyclopedic Law Dictionary) the offense of giving a bribe to many other officers. The offense of the giver and of the receiver of the bribe has the same name. For the sake of distinction, that of the former viz., the bribermight be properly denominated active bribery; while that of the latter viz., the person bribed might be called passive bribery. The voluntary giving or receiving of anything of value in corrupt payment for an official act done or to be done. Read more about Bribery in the legal Dictionaries here.

Practical Information

Note: Some of this information was last updated in 1982

The act of offering, giving, receiving, or soliciting anything of value to influence a public officer’s action in the discharge of legal or public duty. The crime is committed whether or not the official does the act requested. Modern statutes punish the giving, receiving, asking, and offering of bribes.

(Revised by Ann De Vries)

What is Bribery?

For a meaning of it, read Bribery in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Bribery.

Bribery Abroad

Bribery Abroad and the FCPA: Tech Companies operating in Asia

By Randall Jensen (2011)

The SEC scrutinizes Silicon Valley tech companies that do business in Asia.

With the 2011-launched San Francisco-based unit focusing on enforcement of the Foreign Corrupt Practices Act (FCPA), the U.S. Securities and Exchange Commission has turned a microscope on Silicon Valley tech companies.
The FCPA (15 U.S.C. §§ 78dd-1-78ff) explicitly outlaws business-related bribery, and in 2009 the government prosecuted 40 companies for violations of the anticorruption act. Those numbers were beaten in a record-setting year in 2010, resulting in more than $1.7 billion in penalties, also a record.

“One reason [for the increased enforcement] is very practical,” notes Mike Koehler, an FCPA exert at Butler University in Indianapolis. “More and more businesses are doing business in oversees markets than anytime in U.S. history.”

The whistleblower-bounty program devised as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203) is also expected to increase the number of FCPA cases pursued by the government, although Koehler predicts that this uptick will be negligible.

But tech companies’ foreign expansion in recent years–especially into China and other Asian countries known as hotbeds of FCPA violations–could also explain the increased scrutiny on Silicon Valley. “I don’t think [the SEC has] come flat out and said we are going to Silicon Valley because Silicon Valley is now in China, but it is close to that,” says Leo Cunningham, a partner at Wilson Sonsini Goodrich & Rosati.

Some companies in the Valley have augmented manufacturing capabilities in Asia with local partners, for example, while others are battling for market share there. These conditions create a Petri dish for bribery because corruption concerns oftentimes arise from third-party contractors abroad, such as distributors or wholesalers. Companies “trying hard to scramble for contracts [and] who do not yet have a clear sense of this terrain,” are also at risk, says Richard Buxbaum a professor at the UC Berkeley School of Law.

In addition, the line between bribery and facilitation payments is much fuzzier in parts of Asia than in the United States because gifts are a common business practice there and corruption is endemic. Tech firms doing deals abroad are also at greater risk for FCPA violations because Asian companies often need government approvals or licenses to operate, and they may be selling their products directly to state-owned enterprises. “All of this increases the potential for FCPA violations,” says Cheryl J. Scarboro, the SEC’s FCPA unit chief.

American regulatory agencies have also gotten smarter about how bribes play out with tech firms. For example, a tech company could report a lower profit margin and then subsequently add the difference to what the foreign distributor is being paid so that it has a slush fund for greasing palms abroad. “In technology, [corruption] is more insidious and harder to detect,” says Kristin D. Rivera, a partner at PricewaterhouseCoopers and a forensic accounting specialist.

The San Francisco SEC unit, which was officially formed last year, has not yet taken enforcement actions against any Silicon Valley company, but investigations from other units have already hit close to home. Last June the SEC announced a $300,000 settlement with Veraz Networks, a San Jose-based telecommunications company, regarding charges that it had allegedly bribed government officials in China and Vietnam to win business.

Raymond C. Marshall, cochair of Bingham McCutchen’s White Collar Investigations and Enforcement Group in San Francisco, reports that his tech clients in Silicon Valley are feeling anxious about the specter of increased SEC scrutiny. But Butler University’s Koehler notes that there are other reasons corporations are paying such close attention to the issue. “You have this entire FCPA compliance industry out there trying to market its services,” Koehler observes, “and when you are on the receiving end of this, you almost get the sense that the sky is falling.”

Bribery Abroad and the Foreign Corrupt Practices Act practice in Court

U.S. District Judge A. Howard Matz in November 2010 tossed a bribery convictions against a Southern California company and its two top executives, potentially undermining the U.S. justice department’s effort to ramp up prosecutions under the Foreign Corrupt Practices Act (FCPA).

In a case seen as a litmus test for other FCPA, cases Matz found pervasive prosecutorial misconduct, dismissed the indictments, and vacated the convictions against Lindsay Manufacturing Co., its CEO Keith Lindsay and CFO Steve K. Lee. The case marked the first trial of a corporation under the statute and one of a few that reached a judge and a jury.

The U.S. District court stated that, among other misconduct, the government team allowed a key FBI agent to testify untruthfully before the grand jury, improperly reviewed e-mail communications between one defendant and her lawyer, and inserted material falsehoods into affidavits in support of applications for search warrants and seizure warrants.

People v. Fong Ching

by Professor Thomas L. Libby

On January 23, 1897, Fong Ching, the leader of San Francisco’s Sam Yup Tong gang, was shot and killed at a barbershop by two assassins from the rival See Yup Tong. This was quite an achievement as Ching, who was more widely known by his nickname, “Little Pete,” almost always donned a chain-mail armor vest and a medieval-style helmet when he went out, and usually was accompanied by attack dogs.

Ching had good reason to fear retribution. Though only in his early thirties when he died, he had allegedly killed more than 50 men during the infamous Tong Wars that established his empire of gambling, prostitution, opium dealing, and protection rackets reaching into the highest branches of San Francisco’s notoriously corrupt Barbary Coast-era government.

Unsurprisingly, Ching also had his share of legal problems. A decade earlier, he was charged with attempting to bribe police officers. Ching’s attorney, Hall McAllister—later memorialized by McAllister Street, where the current San Francisco Superior Court is located—employed a novel defense in which he admitted Ching’s bribery attempt but argued that Ching was arrested only after he didn’t give in to the officers’ demand for even more money.

After two hung juries, Ching was finally convicted and sentenced to five years in Folsom Prison. But his conviction was reversed and remanded for a new trial by the California Supreme Court in People v. Fong Ching (78 Cal. 169 (1889)) because the judge had given a prejudicial jury instruction. Though the outcome or even the existence of that fourth trial remains unclear, Ching’s supreme court case remains vital today, because it established that what constitutes bribery is a question of law for the court, but that whether the crime has actually been committed is a question of fact for the jury.

Bribery in Foreign Legal Encyclopedias

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Resources

See Also

• Foreign Corrupt Practices Act
• Oath Against Bribery
• Corrupt Practices
• Fcpa
• Hutchings v. Low
• UN Convention against Corruption
• JOBS Act
• Foreign Corrupt Practices Act Of 1977

Further Reading

• Information about Bribery in the Gale Encyclopedia of American Law.