Patton Addresses Ethics Resource Fellows
Our partner Thomas Earl Patton participated in a panel on January 17 on the subject of facilitation payments under the Foreign Corrupt Practices Act. The event was part of the meeting of the Ethics Resource Fellows, an organization led by the Ethics Resource Center, Washington, D.C., dedicated to furthering high ethical standards in business. The purpose of the panel discussion was to seek to create norms of corporate ethics in the area of facilitation payments to foreign officials. Mr. Patton was the lead-off speaker and he set the stage for the discussion by defining the scope of the FCPA and of the exemption for facilitation payments, ie, payments to low level administrative officials to facilitate such matters as obtaining licenses. Mr. Patton noted that legal advice may often be that a certain payment is not unlawful under the FCPA because it falls within the facilitation payment exception. However, he noted that the conduct is almost always unlawful under the law of the foreign country and that U.S. counsel cannot in that case advise that the payment is permissible. In addition, the recordkeeping requirements of the SEC mandate that all such payments are properly accounted for and correctly described.
Other panel members included representatives from Transparency International and Lockheed Martin Corp. The attendants consisted principally of corporate ethics officers of U.S. businesses. Following the panel presentations, a general discussion ensued during which a consensus was reached by the attendants that companies should seek to avoid all unethical payments, including facilitation payments, except in cases of exigent emergencies involving substantial imminent harm or loss. It was noted that the OECD international convention against foreign bribery also contains an exception for facilitation payments but that not all countries have adopted it. Many attendants expected that changes in the FCPA may soon eliminate the exception.