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Harry Cassin
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Wal-Mart’s Victims Part X: Who Are the Actual Victims?

We saw in yesterday’s post that awarding restitution to the governments whose employees accepted (or solicited) the bribes doesn’t quite work.

But can’t we think of a workaround? Can we somehow bypass the government? Maybe we could award restitution to some sort of organization that can actually act on the citizenry’s behalf? A group that did not participate in the bribery, and is well audited and monitored? Maybe some kind of local chapter of an international organization? Surely somebody could take this money and do something useful for the citizens of corrupt governments, right?

It is indeed true that organizations, rather than natural persons, have received restitution under our statutes. We’ve awarded restitution to various kinds of corporations, to a university, even to a neighborhood association. And if community organizations are eligible to receive restitution, maybe we’re on to something . . .

But here’s the rub. Federal restitution requires a showing of “direct and proximate” harm to the recipient of the restitution. In other words, the recipient has to be the actual victim — this is precisely why ICE styled itself, rather than the people of Costa Rica, as the victim of Alcatel-Lucent’s bribery.

In each of the above restitution cases, the organization did not merely represent the victim. The organization was itself was the victim of the crime — usually some form of theft or fraud. Because the perpetrator committed the theft or fraud directly against the organization, ordering restitution to that organization made sense.

That doesn’t work with bribery. There is no organization that can claim to be the victim; the victims are the citizens themselves. Once we’ve ruled out the government, there’s no organization left. I suppose that theoretically we could compensate the citizens directly, but what exactly would we do? Send every citizen of Costa Rica a check? At this point we’ve reached a dead end; we simply lack a mechanism for reaching the real victims. Regrettably, our restitution statutes are ill-suited to the crime of bribing overseas officials.

So if the FCPA is to serve its original purpose of improving the legal and economic conditions of the countries in which we do business, we’ll have to develop another strategy.  I’m working on it, as I’ll continue to explain in the next post.

Wal-Mart’s Victim’s Part I can be viewed here, II here, III here, IV here, V here, VI here , VII here, VIII here, and IX here.


Andy Spalding is a senior editor of the FCPA Blog.

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