Earlier this month, Deere & Company agreed with the SEC to disgorge about $4.3 million in profits and pay roughly $5.4 million in fines in connection with bribes that its Thai subsidiary paid between 2017 and 2020. Recipients included officials from the Royal Thai Air Force, the Department of Highways, and the Department of Rural Roads, as well as a private-sector company.
Thai officials appear to have not been aware of the actions until after the settlement was announced.
Unfortunately, the SEC’s enforcement order omits key facts that might help practitioners gain a better understanding of enforcement priorities. Namely, it doesn’t include revenue and profit details of certain contracts, leaving the reader to guess how each corrupt tender was accounted for in the final settlement figures.
As a result, it is not possible to confirm whether the SEC imposed any penalties at all for the commercial bribes*(though it certainly implies that it did). In its enforcement against Albemarle last year, the SEC called out commercial bribes, but imposed no actual penalty.
It even plays coy, dropping hints about the details of “massage parlor visits,” but failing to allege that sexual services may have been provided.
While the dollar values of those visits are low compared to the subsidiary’s other bribes, the especially harmful nature of sex work raises legitimate investor questions about governance and culture. This remains a question mark for the agency that fined a mutual fund manager $8 million when its employees received lavish hospitality, including a bachelor party with escorts, but let the company that provided the escorts pay $2.5 million less in fines.
The SEC order seems especially tight-lipped when it comes to details about deals with the Royal Thai Air Force. Thailand is currently mulling over Swedish and U.S. options in buying a dozen fighter jets, worth billions, by 2034.
*While the FCPA’s anti-bribery provisions only cover improper payments made to foreign government officials (and not commercial bribes in the private sector), the law also includes provisions relating to the accuracy of books and records, and sufficiency of internal controls, that have been used in enforcements that involve US domestic officials, or that have nothing to do with any kind of bribery at all.
FCPA Compliance Consultant
In recent years following the pandemic, asynchronous, virtual training has become increasingly popular as workforces largely remain remote and globally scattered. Offering unmatched accessibility and flexibility for learners globally, many organizations have turned to a Learning Management System (“LMS”) to help facilitate their training deployment, with many platforms offering various technical bells and whistles to assist in facilitating learner completion and retention. The following are a few tips for positioning yourself for success while deploying your training. (To note: This post assumes you have access to some form of LMS or course deployment technology).
Ensure a user-friendly environment: Creating a user-friendly environment is crucial for achieving high completion rates in training programs. Key considerations include:
Prioritizing the visibility of assigned training upon user login into your platform – don’t make the user work to hard to locate their training assignment!
Incorporate branding or organization-specific welcome messages on your training homepage – a little bit of personalization can go a log way to building connection with your learners
Emphasize accessibility to support throughout the learning process – ensure ample technical support is available (post in an easy to get to location user guides that include images, or make dedicated staff able to help troubleshoot common issues like password resets and certificate downloads
Organization is key: Effective management of a large number of learners in an LMS must start with a well-mapped organizational plan for your training rollout. Initial grouping of learners in your platform is a critical step to ensure long term organization and streamlined administration. Consider enhancing learner accounts with additional fields such as Department, Title, Manager, Region, and other relevant data which can provide valuable insights into your training’s effectiveness and also improve overall management capabilities.
So, you’ve deployed your training, now what? The most important part of any training rollout is determining – are your learners actually completing the training AND are they retaining the information included in the training? Many LMS platforms offer a myriad of tools that are built into the main interface – features such as reports, surveys, learner course completion time and other analytics. Explore your analytics dashboard early on to get out ahead of any slow completers, address any technical glitches and collate any feedback on your content (you may even be able to pivot in real time with a quick adjustment!)
Don’t have an LMS in place? In need of compliance eLearning content? TRACE offers all of this and more to its members. For more details on what TRACE membership offers (including unlimited access to our training and LMS) reach out to us at training@TRACEinternational.org. We’ll be happy to show you all that we offer!
Manager, LMS & Technical Support Team, TRACE
This post is part of our “Ask an Expert” series where we take questions submitted by readers and ask an expert in the compliance field to provide insight. If you have a question you would like answered, please submit here. |
One of the most significant anti-corruption developments of 2024 has been the use of a previously little used statute, 18 USC 219, to prosecute members of Congress. In July, Senator Robert Menendez was convicted of conspiring to violate 219 and in April, Texas representative Henry Cuellar was charged with conspiring to violate 219. 219 criminalizes engaging in activity that would require registration under the Foreign Agents Registration Act (“FARA”). But members of Congress are not eligible to register under FARA. So under 219 they can be prosecuted for any FARA covered activity. This would not be a problem but for the fact that FARA is extremely broad and includes simply acting at the “request” of a foreign principal with no requirement of a bribe, quid pro quo, or violation of an official duty. This raises several troubling questions: Does a member of Congress commit a crime by supporting legislation, such as a foreign aid bill, at the request of a foreign leader such as Ukrainian President Zelensky or Israeli Prime Minister Netanyahu? Does the difficulty of answering this question mean that 219 is unconstitutionally vague?
FARA and 18 U.S.C. Section 219
FARA requires individuals and entities engaged in “political activities” in the United States “for or in the interests of” a foreign principal to register as foreign agents if they act “in any…capacity at the order, request, or under the direction or control, of a foreign principal….” “Political activities” is defined as “any activity that the person engaging in believes will, or that the person intends to, in any way influence any agency or official of the Government of the United States or any section of the public within the United States with reference to formulating, adopting, or changing the domestic or foreign policies of the United States or with reference to the political or public interests, policies, or relations of a government of a foreign country or a foreign political party.”
18 U.S. 219 makes it a crime for any “public official” to “act as an agent of a foreign principal required to register under [FARA].” “Public official” is defined broadly to include any “Member of Congress…or an officer or employee or person acting for or on behalf of the United States, or any department, agency, or branch of government thereof….”
In other words, a government official can be indicted for acting at the “request” of a foreign principal regardless of whether the official has acted improperly in any way. Given its astonishing breadth and vagueness, it is not surprising that despite being passed in 1966, there were no cases under 219 for over 50 years. But that has now changed.
Menendez and Cuellar
In October 2023, Menendez was charged in a superseding indictment with conspiracy to act as an unregistered agent of Egypt in violation of 219. In April 2024, Cuellar was charged with conspiracy to act as an unregistered agent of Azerbaijan in violation of 219. Menendez challenged the 219 charge, arguing that it violates the Constitution’s Speech or Debate clause (which provides that members of Congress “shall not be questioned in any other place” for speech or debate in Congress) and “unconstitutionally interferes with the separation of powers.” As counsel wrote “FARA’s sweeping language delegates to the Executive and Judiciary the power to supervise the daily functioning of the Legislative….Yet, the separation of powers compels the Executive and Judicial Branches to respect the independence of the Legislative Branch.”[1] The court rejected this claim, noting, among other things, that “Congress here has passed a law with a certain requirement for its Members – not to act as agents of a foreign government-and has explicitly empowered the Executive Branch to enforce that prohibition….the risks that any congressional work will be impaired or of presidential abuse are significantly mitigated by the fact that Congress can always amend the statute if it so chooses.”[2]
It remains to be seen what Constitutional challenges Cuellar may bring.
Void for vagueness?
One possible challenge, which was hinted at, but not raised explicitly by Menendez, is that Section 219 is void for vagueness. The Supreme Court has held that “the void for vagueness doctrine requires that a penal statute define the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement.”[3]
As noted above, 219 creates the possibility that any Member of Congress who advocates for any legislation at the “request” of a foreign leader could be committing a federal felony. But can that really be the case? If so, isn’t almost every Member potentially subject to criminal charges every time they take a position on any issue as a result of a persuasive presentation by a foreign advocate? Is the term “request” limited in some way so as to prevent arbitrary enforcement? For example, is there an implicit requirement in 219 that the foreign principal’s influence be the decisive influence on the Member’s vote? Or that the “request” or the resulting action be in some way improperly motivated?
The statute yields no clear answers to these questions which go to the very heart of the offense. In an era of increasing concern on both sides of the aisle about weaponization of criminal justice Congress should act to either repeal or clarify this vague and potentially dangerous statute.
Partner, Squire Patton Boggs
[3] Kolender v. Lawson, 461 U.S. 352 (1983)