The U.S. Foreign Corrupt Practices Act (FCPA) makes it unlawful to bribe foreign government officials to obtain or retain business. There are five elements for a violation under the FCPA:
The FCPA applies to Columbia University and any individual faculty or employee who is a citizen, national, or resident of the United States. U.S. citizens, nationals, and residents are covered by the FCPA wherever they travel and live throughout the world. In addition, the University and individual faculty and employees may be liable for the acts of foreign subsidiaries where they authorized, directed, or controlled the activity in question.
The person making or authorizing the payment must have a corrupt intent, and the payment must be intended to induce the recipient to misuse his or her official position. The offer or promise of a corrupt payment can constitute a violation of the statute, even if the official fails to take the desired action.
The FCPA prohibits paying, offering, promising to pay (or authorizing to pay or offer) money or anything of value. “Anything of value” can include meals, theatre tickets, discounts, and services, particularly if extravagant and not customary for the University. In addition, the business does not need to be with a foreign government or foreign government instrumentality - a payment to a foreign official to obtain business with a private person would also be prohibited.
The FCPA prohibits payments to a foreign official, a foreign political party or official, or any candidate for foreign political office. A "foreign official" means any officer or employee (regardless of rank or position) of a foreign government, a public international organization, or any department or agency, or any person acting in an official capacity. This can include a member of a royal family or an official of a state-owned enterprise. Individuals employed by foreign universities may be deemed to be foreign officials, depending on the relationship between the university and the government.
Business Purpose Test
The FCPA prohibits payments made to help obtain or retain business, or directing business to any person. The Department of Justice interprets "obtaining or retaining business" broadly, such that the term encompasses more than the mere award or renewal of a grant, gift, or contract. In addition, the business does not need to be with a foreign government or foreign government instrumentality, but can be with a private person.
The FCPA also prohibits corrupt payments through intermediaries. It is unlawful to make a payment to a third party, while knowing that all or a portion of the payment will go directly or indirectly to a foreign official. The term "knowing" includes conscious disregard and deliberate ignorance.
When working with potential collaborators, vendors, and others, we should be mindful of any so-called "red flags." A red flag includes an unusual payment pattern or financial arrangement, a history of corruption in the country, a refusal by the foreign party to agree with a written provision that it will not take any action in violation of the FCPA, lack of transparency in expenses and accounting records, apparent lack of qualifications to perform the services offered, and whether the party has been recommended by a governmental official.
It is also important that, where appropriate, the compliance obligations outlined in this section be “flowed down” to contractors, collaborators, and other third parties acting on the University’s behalf.
Many other countries have their own anti-bribery laws, sometimes with broader application. For example, while the FCPA covers foreign officials, other regimes prohibit bribes against private, non-governmental persons.
Application of the FCPA can be complex. Columbia’s Central Administration is equipped to advise on appropriate anti-bribery provisions and measures for memoranda of understanding, procurement contracts, leases, and other agreements with third parties. The OGC should be consulted as issues and questions arise.