My previous post argued that Black’s definition does not serve us well. Specifically, it deems a private-sector actor’s bribe to a government official corrupt only to the extent that the bribe violates a fiduciary duty. But I think we’d all agree that bribe-paying is wrong, and corrupt, even if no fiduciary duty is violated.
Yes, in countries that have prohibited bribing overseas officials, doing so violates a fiduciary duty (an illegal act is, by definition, a fiduciary breach). But we do not deem bribe-paying corrupt because it is illegal; we have rendered it illegal because it is corrupt. Don’t believe me? Just ask anyone who was around when the SEC published its Watergate findings — that stuff seemed corrupt before the FCPA prohibited it.
In a post-FCPA/OECD world, our 21st-century definition of corruption needs to encompass corporate bribe-paying. Specifically, it should encompass the payment of a bribe by a private actor to a foreign government official. And it should deem that payment corrupt regardless of whether the bribe-payor is a fiduciary.
So here is Black’s definition:”a fiduciary’s or official’s use of a station or office to procure some benefit either personally or for someone else, contrary to the rights of others.” And here is my proposed new definition: “conduct by a public or private actor that is intended to procure some benefit, either personally or for someone else, the granting of which would contravene official or fiduciary duty and the rights of others.”
What do you think?
It expands Black’s definition of corruption to include bribe-paying without regard to fiduciary duty. Although the granting of the benefit may be wrong by virtue of a fiduciary breach (thus encompassing forms of corruption in which all parties are in the private sector), the bribe payor need not violate a fiduciary duty, or even be a fiduciary, to engage in corruption. That’s the key. By this definition, a person that bribes an overseas official for business purposes has engaged in an act of corruption.
As I indicated before, comments on this series are most welcome. Please send them directly to me at [email protected]. I look forward to the conversation.
Andy Spalding is a senior editor of the FCPA Blog.