Bribery & FCPA

After reading the first three chapters of the textbook, I soon realized that the cultural differences in countries can cause problems with ethics as well as competitive advantages. I became interested in bribery among international transactions and the limitations of the US Foreign Corrupt Practices Act of 1977.

I read the article “Bourke Convicted of Bribery in Konzey’s Azerbaijan Oil Deal” http://www.bloomberg.com/apps/news?pid=20601087&sid=aXO.vHLdvbcM . I wanted to find a current article that deals with international bribes and the FCPA. This article came out 7/11/2009. The article mainly discusses how Frederic Bourke was convicted by a US jury of conspiring to pay bribes to government leaders in Azerbaijan in a 1998 oil deal. This was a breakthrough case for the FCPA because Bourke was convicted even though he did not pay the bribes himself. He only knew of the bribes and was convicted of violating the FCPA, violating money-laundering laws, and lying to FBI agents

Bourke was on trial for investing with Viktor Konzey knowing that Konzey gave Azeri leaders millions of dollars in cash and a secret interest in a venture to buy the state oil company. Konzey is also being charged, but is currently living as a fugitive in the Bahamas. The most interesting part of the article was that Konzey admits to bribing Azeri leaders and claims he knew the money was being used as payoffs, but says that the FCPA does not apply to him because he is not a US citizen. The US is now appealing a Bahamian court’s refusal to extradite him.

The article ends with Konzey’s opinion on Bourke’s conviction. He states that Bourke deserves minimal sentence because “in our Judeo-Christian culture, we base our life on forgiveness”.

I thought this was a great article because it shows the problems faced with different rules and beliefs in different cultures and the limitations of the FCPA. Although Bourke faces sentencing later this month for his conviction, Konzey will face no consequences for now even though admitting to the bribes.