May 11, 2011
Who'd notice a Ferrari?
Law.com reports that the Justice Department has tried and convicted the first company, Lindesy Manufacturing, of Foreign Corrupt Practices Act (FCPA) violations. According to the article:
A federal jury has found a California company and two of its senior executives guilty of violating the Foreign Corrupt Practices Act by paying bribes, including a $300,000 red Ferrari, to two officials from a state-owned electric utility company in Mexico.
Lindsey Manufacturing Co., Chief Executive Officer Keith Lindsey and Chief Financial Officer Steve Lee each was convicted on May 10 on all counts — one of conspiracy to violate the FCPA and five of FCPA violations.
According to an LA Times report, the company hired a Mexican national who "used part of [his $5.9] commission to buy the power company official a $297,500 Ferrari, a $1.8-million yacht and to pay more than $170,000 of his credit card bills, prosecutors alleged."
I don't know how executives of state-owned utilities roll in Mexico, but it would seem a little odd that he or she would be driving a Ferrari. Obviously, the executive could be independently wealthy, and simply has the job to keep busy, but it's not exactly like splurging on a new BMW, which might seem extravagant, but not impossible to explain.
Andre Birotte Jr., the Los Angeles U.S. Attorney, says "Bribery is not a victimless crime. . . . Not only does it damage citizens' confidence in their own government, it also damages the integrity of the global marketplace." I'm inclined to agree. And, just as important, bribery is against the law.
So, someone noticed the Ferrari, and a jury has convicted the Lindsey Manufacturing executives. One question: What happened to this state employee?
Who can object to motherhood or anti-corruption laws? But the reality of the FCPA is that its primary impact has been to enrich big law firms, forced sales and marketing departments to be more surreptitious, and made middlemen key enablers in foreign countries which expect their public officials to make a living on graft. As a glance at the Corruption Index will make clear, not much more has changed.
Posted by: Arthur O. Armstrong | May 12, 2011 7:39:02 AM