Foreign Domestic Bribery Double Standards Irk Law Professor

Politicians and law enforcement officials in the United States make a big deal about foreign bribery.

Mike Koehler

Mike Koehler

Mike Koehler — an assistant professor at Southern Illinois University School of Law wants to know — what about bribery right here in the United States?

And what about bribery committed by our own government?

He raises these questions in a new law review article — The Uncomfortable Truths and Double Standards of Bribery Enforcement. (Fordham Law Review, Volume 84, 2015).

Koehler has been an active critic of the Foreign Corrupt Practices Act (FCPA) and the Justice Department’s program to enforce the law.

“FCPA enforcement is as much a political enforcement program as it is a law enforcement program and it is much easier to point the finger at ‘corrupt’ foreign officials and ‘corrupt’ foreign business practices, then it is to look in the mirror and realize that much of what the U.S. government labels ‘corruption’ abroad happens here at home as well,” Koehler told Corporate Crime Reporter.

In the law article, Koehler points out what he calls a number of “uncomfortable truths” about the “US crusade against bribery.”

Uncomfortable truth number one being that the “US government is an active participant in bribery.”

Koehler cites the 2010 case of  Bobby Elkin, Jr. who pled guilty to a one-count criminal

information charging conspiracy to violate the FCPA for paying and authorizing the payment of bribes to Kyrgyz officials in order to secure business for his tobacco company employer.

Koehler reports that “at sentencing, the Department requested that U.S. District Court Judge Jackson Kiser (W.D. Va.) sentence Elkin to thirty-eight months in federal prison.”

“However, Judge Kiser saw shades of gray in conduct that the Department portrayed as black and white,” Koehler writes. “Judge Kiser noted it was not illegal for the CIA to routinely bribe Afghan warlords, and, in the words of Judge Kiser, this parallel ‘sort of goes to the morality of the situation’ relevant to the Department’s prosecution of Elkin. Accordingly, Judge Kiser rejected the Department’s sentencing recommendation, sentenced Elkins to probation, and waived the usual probation travel restriction allowing Elkin to return to Kyrgyzstan and resume his job with another tobacco company.”

He then raises uncomfortable truth number two — namely, the U.S. government’s knowledge and support of private sector bribery.

“Consider the case of James Giffen,” Koehler writes.

“Giffen was criminally charged with ‘making more than $78 million in unlawful payments to two senior officials of the Republic of Kazakhstan in connection with six separate oil transactions, in which [various] American oil companies . . . acquired valuable oil and gas rights in Kazakhstan.’”

“Giffen’s defense was that his actions were made with the knowledge and support of the CIA, the National Security Council, the State Department, and the White House. The Department did not dispute that Giffen had frequent contacts with senior U.S. intelligence officials or that he used his ties within the Kazakh government to assist the United States. With the court’s approval, Giffen  sought discovery from the U.S. government to support his public authority defense and much of the delay in the case was due to the government’s resistance to providing such discovery.”

“In 2010, approximately seven years after the enforcement action began, the case took a sudden and mysterious turn when Giffen agreed to plead guilty to a one-paragraph superseding indictment charging a misdemeanor tax violation. Presiding Judge William Pauley of the Southern District of New York imposed no jail time on Giffen and praised him for advancing

U.S. ‘strategic interests,’ calling him a Cold War hero and commenting that the enforcement action should never have been brought in the first place. Giffen himself stated: ‘Would I do it again? Absolutely. What we were doing was important.’”

Koehler concludes that “Giffen presumably prevailed over the Department not because of the facts or the law, but because he possessed significant leverage over the U.S. government.”

And then there is the elephant in the room — a system of legalized domestic bribery in the United States.

Koehler quotes Professor Janine Wedel of making the distinction between cash payments bribery and Citizens United bribery.

“The idea of corruption . . . is simple bribery — cash changing hands,” Wedel told Corporate Crime Reporter. “It’s the proverbial cash in the piano or the freezer. Corruption is reduced to bribery. In fact, today’s most savvy power brokers are engaged in a kind of corruption that is much more subtle and more difficult to detect. Today’s most corrupt players, at least in the West, don’t need this quid pro quo corruption. They are far beyond that. That’s for the little players. That’s for the small fry.”

Koehler agrees, saying that “bribery ought to be bribery pure and simple, and subtle distinctions should not be drawn based on the source of money or influence.”

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