FCPA Issue Watch: Each Action a Violation?
Last week, Judge Kevin McNulty of the U.S. District Court for the District of New Jersey considered the novel question of whether any act committed during an alleged bribery scheme could form the basis of a separate violation of the Foreign Corrupt Practices Act. The case is U.S. v. Coburn et al., No. 2:19-cr-00120 and concerns two former executives of Cognizant Technology Solutions Corp., accused of conspiracy and FCPA violations for approving a $2 million bribe to obtain a construction permit for a Cognizant facility in Chennai, India in 2014.
The prosecution charged Gordon Coburn, one of the former Cognizant executives, with three FCPA violations, with three emails from Mr. Coburn to co-conspirators forming the basis of the three charges. Counsel for Mr. Coburn requested dismissal of two of the three charges, arguing that allowing FCPA prosecution based on any act committed in furtherance of a violation would lead to absurd results. He imagined a scenario where prosecutors charge an individual for engaging in everyday tasks in advance of completing the bribery scheme, such as hailing a taxi or morning hygiene. With respect to Mr. Coburn specifically, Counsel argued that the three counts “improperly charge Mr. Coburn with three violations of the FCPA’s anti-bribery provisions based on one alleged authorization of a corrupt payment,” the building permit.
The prosecution argued that the FCPA does not “require a one-to-one relationship” between an act committed in furtherance of a bribe and an actual bribe, adding that the decision to charge separate counts based on acts is cabined only by the discretion of the government. For support, the prosecution referenced case law apparently validating the charging of separate fraud charges based on particular mailing or wire transactions. In his briefing to the court, Counsel for Mr. Coburn argued that Congress’ intended focus for the FCPA was the prohibition of corrupt payments overseas and that there is no support for the notion that the FCPA concerned protection of the mails and wires. In doing so, Counsel for Mr. Coburn argues that—under the FCPA—the alleged violation is the authorization of the bribe and not actions taken in furtherance of the scheme.