United States V. Blondek, Tull, Castle, And Lowry: A Case Study On Bribery Under FCPA Of 1977

In this assignment:

1. Select a case from one of the cases below.
2. Select the party you wish to represent i.e. China, Philippines, United Mexican States.
3. Research your selected case.
4. Read and understand your selected case.
5. Prepare and present a summary of the case and your selected party’s arguments.

1. De Sanchez v. Banco Central De Nicaragua
2. Chatting v. United Mexican States
3. Metro Industries v. Sammi Corp.
4. United States v. Blondek, Tull, Castle, and Lowry.

Case: United States v. Blondek, Tull, Castle, and Lowry

This is a case filed by United States of America against the defendants namely Blondek, Tull, Castle and Lowry on the ground of giving and taking bribes to the foreign official for personal purpose (Skousen and Vanasco 1999). This case can be categorized as white collar crime (Anello and Glaser 2016). Castle and Lowry has been accused of taking bribe as Canadian Official and Blondek and Tull are accused of giving bribe to the Canadian officials. All the defendants are charged under Foreign Corrupt Practices Act of 1977 for violating the provisions of the Act (Reilly 2015). Castle and Lowry are the Canadian Official and so the court has dismissed all proceedings against them, as the Act does not state any such provision to accuse foreign official under the Act. The other two defendants Blondek and Tull are US citizens and violates the provisions of the FCPA.

The all four defendants have been charged by the United States for the violation FCPA Act 1977 for bribing the foreign officials in violation. Blondek and Tull were employees of the Eagle Bus Company and is an US concern as the definition stated in FCPA. The defendants paid $50,000 to the foreign officials to settle the bid called by the Saskatchewan provincial government. Payment of bribe is illegal under the FCPA and for violating the provisions of the FCPA they must be prosecuted. The Act does not have any provision, which can criminalize a foreign official for taking bribe. The main issue in the case is that whether the Government may start any proceeding against the foreign officials namely Castle and Lowry under the general conspiracy legislation for violating the FCPA. In Gebardi v United States, the Supreme Court had faced the same issue regarding whether a woman who agreed to be transported to other foreign nation for sexual intercourse can be convicted under the Mann Act 1910 (Rev 2017). Transportation of women to any other country is prohibited under the Act, but it did not criminalize women who willingly participate in the transportation (Bartle, Chamberlain and Wholberg 2014). The court viewed that the court could not prosecute a woman for such violation of the Act instead the court criminalize for conspiring to violate the Act. The present case is different from the other on the ground that the violation of the Mann Act, 1910 required the woman to agree on the criminal act of transportation. However, the Mann Act or White Slave Traffic Act did not make the agreement by the woman as crime. On the other hand, the purpose of the Foreign Corrupt Practices Act, 1977 is to make the process of taking or giving bribe to foreign official illegal (Nordlöf 2015). Thus, it is transparent from the provision that officials, Blondek and Tull are foreign officials and the other defendants are American citizens. The requirement under the  FCPA Act are fulfilled here.

Mr. Blondek was the president of a public company under which the Eagle Bus Manufacturing was a subsidiary and Mr. Tull was the vice president of the Eagle Manufacturing. The manufacturing firm dealt with the manufacturing and marketing of buses in Texas, U.S.A (Chow 2014). Donald Castle was the president of a foreign transit company, which was owned by the government of Saskatchewan and Mr. Lowry was the vice president of the same. In the year 1989, Eagle Bus Manufacturing worked out a deal through their Canadian agent for the sale of buses to the Saskatchewan based company. To finalize the deal, the president and vice president of that Saskatchewan Company asked for bribe from the officials of Eagle Bus Manufacturing and the said officials made the payment to the foreign officials. On the next year, American department of justice filed a case under the provision of Foreign Corrupt Practices Act, 1977 against them and accused them under section 78DD-1 and 78DD-2 for the violation of anti bribery provision of the same said Act (Newcomb, Urofsky and Sterling 2008).

Case Details

The problem arises when the officials of the Saskatchewan Company defended themselves by saying that there is no provision under the Act to prosecute a case against any foreign official for taking bribe and prayed for the dismissal of the suit. The District court of Texas accepted their submission and released them (Lee 2013). The question regarding their release was arose and the issues were raised whether Castle and Lowry can be charged under General Conspiracy Statute for the violation of the provision of the Foreign Corrupt Practices Act.

To decide the present case, the court remarks the instance of another similar kind case law namely Gebardi vs. United States (1932). The case was attracted by the provision of white Slave Traffic Act, 1910. The Act made a prohibition on transportation of any woman for sexual intercourse, but exempted those women who gave their consent over the issue (Dysart 2014). In that case also the alleged woman defended herself on the basis of such exemption and prayed for her release before the court. While deciding the case, the court observed that it is the exemption that the consent of a woman could not made her accused under the Act, and it includes the provision regarding the conspiracy to violate the said Act. The reason is when the provision of the Act of 1910 and conspiracy statute are construed with each other, and the former Act does not made the person guilty, he or she will automatically be exempted from the latter one.

The provision of the Mann Act or White Slave Traffic Act 1910 was made with a view to protect the interest of the women where they are subjected to men’s conspiracy or coercion regarding the trafficking. However, there is no provision in the Act which mentions that only the protected persons are to be exempted from the charges regarding conspiracy. This Act was applied to all the women, who gave their consent over the transportation (Pliley 2014).

The same provision is applied in this present case with a view to determine the issue whether the foreign official can take the advantage regarding their residence. The object of the FCPA act is to punish the person from taking and giving bribe with a purpose to curb the curse of such crime in Toto. However, the Act provided an exemption regarding such accusation also..

The reason for granting them relief is that the legislative members of the United States of America were  introduced the Act with a view to decrease the bribe rate in domestic sphere. In the first half of 1970’s, the mal practice regarding bribe was increased unexpectedly. The official report revealed the fact that over four hundred companies are accused for taking bribe and the amount was more than three hundred million dollar. Bribe became a fraud in U.S.A and created a negative impact on the market policy of United States. Moreover, the bribe system created an unethical expression over the business criteria and business entities lost their trustworthiness due to this issue of bribery. The standard of the enterprises were deteriorated and the low standard affected the shares of U.S.A and the business classes had faced a huge risk factor for the same.

Case Law regarding Gebardi vs. United States (1932)

The second motivation behind passing the FCPA Act was to prevent the bad impression of bribe on the foreign relation of United States. The foreign policy of America was vehemently affected by the curse of bribe and the friendly relation between the foreign governments was ruined. It was stated that the bill regarding the foreign corruption, exclusively stated the bribery applied the foreign national too who participated in the mal practice but foreign officials are excluded from the provision. From the aspect of substantive offence, the foreign officials are excluded from the conspiracy statute also. The foreign officials are of minimum deterrent value in such prosecution because other countries imposed provision regarding anti bribe upon the respective officials.

It was further observed by the Court that the legislative body of America has given advantage to a certain class of parties under this Act and release them unpunished though they are accused of violating the provision of taking bribe or participated in the conspiracy of taking bribe. Moreover, it was observed that the Canadian Government also imposes imprisonment over the officials who are alleged to take bribe from others during their work session or anything related to their work. Having charged with the bribery, the Canadian police immediately started investigation against both of them and inform the duo’s counsel at the same time (Rotberg 2017). Thus, it is not necessary to take extra step against them regarding the same matter.

Conclusion:  

Therefore, from the above discussion, it can be concluded that the construction of the FCPA Act is quite liberal and its aspect should not be technically implemented. The complexity regarding the both should be avoided.  The court release both the official under the Act and the decision of the court regarding the case went in favor of the Castle and Lowry, exempted them from the alleged provision and gave judgment by releasing them from the prosecution for violation of the provision of Foreign Corrupt Practices Act 1977.

Reference: 

Anello, R.J. and Glaser, M.L., 2016. White Collar Crime. Fordham L. Rev., 85, p.39.

Bartle, S., Chamberlain, C. and Wholberg, B., 2014. Foreign Corrupt Practices Act. Am. Crim. L. Rev., 51, p.1265.

Chow, D.C., 2014. Three Major Risks Under the Foreign Corrupt Practices Act for Multinational Companies Doing Business in China.

Dysart, T.L., 2014. Child, Victim, or Prostitute? Justice Through Immunity for Prostituted Children.

Lee, M. ed., 2013. Human trafficking. Routledge.

Newcomb, D., Urofsky, P. and Sterling, L.L.P., 2008. FCPA Digest of Cases and Review Releases Relating to Bribes to Foreign Officials under the Foreign Corrupt Practices Act of 1977. Europe, 44, pp.7655-5781.

Nordlöf, H., Wiitavaara, B., Winblad, U., Wijk, K. and Westerling, R., 2015. Safety culture and reasons for risk-taking at a large steel-manufacturing company: investigating the worker perspective. Safety science, 73, pp.126-135.

Pliley, J.R., 2014. Policing sexuality: The Mann Act and the making of the FBI. Harvard University Press.

Reilly, P.R., 2015. Book Review of'The Foreign Corrupt Practices Act in a New Era,'by Mike Koehler. Browser Download This Paper.

Rotberg, R.I., 2017. Canada’s corruption at home and abroad: An introduction to the special issue. Canadian Foreign Policy Journal, 23(1), pp.1-14.

Skousen, C.R. and Vanasco, R.R., 1999. THE FOREIGN CORRUPT PRACTICES ACT: AN INTERNATIONAL PERSPECTIVE. Interactive Teaching and the Multi Media Revolution: Case, p.549.

Wee, S.E., 2017. THE GEBARDI" PRINCIPLES". Colum. L. Rev., 117, pp.115-149.