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U.S. probes Uber for possible bribery law violations

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Re: U.S. probes Uber for possible bribery law violations

#41
post #16

Oh wow. FCPA violations. One of the key rules of American business is that you do not dance around with the FCPA [0]. (I suspect many new startup managers are not familiar with the FCPA but you can bet their investors are.) Violations of the FCPA do not just result in fines, they result in actual jail time for whomever did the bribing, whether they be individual low-level employees, contractors, or CEOs. That said, t…

Note that the facilitation payment exception to the FCPA is (i) extremely narrow; (ii) still requires the company to accurately report the payment as a facilitation payment, which Uber probably didn't do: https://globalanticorruptionblog.com/2014/06/17/the-fcpas-fa... > On top of that, even if a grease payment is exempt from the FCPA’s anti-bribery provisions, if that payment were not accurately recorded as a facilit…

[deleted]

Re: U.S. probes Uber for possible bribery law violations

#42
post #38

If I pay a consultant $1M for his expertise in navigating local bureaucracy, and it turns out that he used half of that money to bribe local officials without my knowledge, have I committed a crime under FCPA?

Possibly. Most FCPA enforcement actions involve third parties. The FCPA expressly prohibits corrupt payments made through third parties or intermediaries. The fact that a bribe is paid by a third party does not eliminate the potential for criminal or civil FCPA liability. The FCPA expressly states that a company or individual may be held directly liable for bribes paid by a third party if the principal has knowledge of the third party's misconduct. 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”. Intermediaries may include joint venture partners or agents. Third parties and intermediaries themselves are also liable for FCPA violations.*

*: https://www.transparency.org.uk/wp-content/plugins/download-...

Re: U.S. probes Uber for possible bribery law violations

#45
post #31

Earlier quoted context omitted.

Aren't there some rumors that the Trump administration is weakening enforcement of the FCPA?

The Wikipedia article says that Trump called the FCPA a "horrible law" but Jeff Sessions says he'll continue to enforce it.

Which means "selective enforcement".

Re: U.S. probes Uber for possible bribery law violations

#47
post #34

Every large, 100+ person sharing economy company has done this. I'm a former employee at one of them. I'd bet my 401k on it.

Well, most 100+ employee companies are probably older than the law. Other than that, your attitude is of the rather useless variety: it's easy to disprove, as just a single counter-example is sufficient.

I'm actually not even sure if the majority of US companies does /any/ business in foreign countries. Even among those 100+ sized, an awful lot of them are hospitals, regional cleaning companies etc that couldn't bribe any foreigners even if they wanted.

(edit: just noticed that I had missed the "sharing economy" qualification. You may be right in that context.)

Then, to take an example closer to this audience, there are all those that sell into foreign markets but have basically no contact with those markets other than what's mediated by their payment processor. Think of some medium-sized ISV: under which circumstances would they even get into a situation where bribery was an option?

Is corruption something that actually occurs in the US–to such a degree that a significant portion of white-collar employees know how it works? Because I've never seen it, and wouldn't know were to start.

The FCPA is actually among the rather great achievements of US diplomacy. Until its enactment, my wonderfully law-abiding home country of Germany still allowed foreign bribes to be tax-deducted. It wasn't that bribery itself was tolerated domestically–far from it. But they considered it a matter of pragmatism to adjust to lower moral standards in other countries. Of course such rules only perpetuated those "lower moral standards", and German businesses never were the powerless victims they claimed to be.

When the US started to enforce rules against foreign corruption against domestic companies, these had a strong incentive to lobby for similar standards abroad, and for the US to use their unparalleled power to directly enforce such rules against foreign companies as well. The result was the almost complete elimination of corruption among a segment of the economy, namely large internationals, and specifically their b2g business.

Re: U.S. probes Uber for possible bribery law violations

#48

Gut feeling: they did it, early and often. In many countries that's the only way to operate it, especially if you're breaking the laws (taxi rules and regs.) A wire transfer or a suitcase full of cash will automatically make you complaint and a law abiding company...doesn't matter who complains about you. They will throw the person under the bus and pay a huge fine, but it will definitely hurt them in a lot of countr…

That is true in some foreign countries, but probably not as many as one may think. Uber ran into a lot of trouble in countries such as France and Germany, where attempts of bribery are probably doomed–if only because whoever you're trying to bribe is quite likely not to even understand what you're trying to do.

That doesn't mean you couldn't find corrupt people in those countries. But the sort of regulatory trouble Uber was having would require bribing group of local officials all over those countries. And only a single one of them would have to go public to not only ruin your chances in that country, but also get you into trouble in the US.

Re: U.S. probes Uber for possible bribery law violations

#49
This is a bit off topic but I have never understood why the US cares about corruption in foreign governments. I understand why corruption is bad and should not happen but what I don’t understand why the US cares. If a US company can make more money this way (without violating any domestic bribery laws) why does the US care? It is not like that they are known to have high moral standards when it comes to other countries unless it somehow aligns with their own interests.

Re: U.S. probes Uber for possible bribery law violations

#50

Oh wow. FCPA violations. One of the key rules of American business is that you do not dance around with the FCPA [0]. (I suspect many new startup managers are not familiar with the FCPA but you can bet their investors are.) Violations of the FCPA do not just result in fines, they result in actual jail time for whomever did the bribing, whether they be individual low-level employees, contractors, or CEOs. That said, t…

As you point out for a business the FCPA is both elementary, serious, and enitrely possible to comply with. That said the "jail time" provision is a joke. Going from memory no corporate officer has ever gone to prison for an FCPA violation. A handful have been hung out to pay nominal fines. The vast majority of personal culpability (when it does happen) are settled by the company. Edit: yes, some employees have gone…

While I feel the same raging wish to see corrupt business leaders suffer, I think it's just the nature of these cases that most enforcement works via Civil liability.

The FCPA is mostly concerned with larger, often public companies. Corruption at that level almost certainly is a sign of a organisational failure. It's the shared responsibility of a lot of people to create structures that don't allow for corruption.

At the core of it are the incentives: for an employee to consider bribing someone, a lot must have gone wrong. After all it carries the risk of jail time for them, while any benefits go to their employer first.

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