An Overview of Commercial Bribery Court Cases

By Matthew D. Orwig

Books May 2019
Image supplied by ABA Publishing.

Business Bribes: Corporate Corruption and the Courts (ABA Book Publishing, 2017), by Cecil C. Kuhne III, is a well-written, informative anthology of two dozen court cases illustrating essential legal points about commercial bribery. While there is an abundance of materials written on specific issues related to bribery of government officials, Business Bribes provides an excellent overview of commercial bribery in a much broader context and does so in an efficient, entertaining way.

Business Bribes is evenly divided into two parts. Each begins with an overview of the law pertaining to business bribes followed by relevant cases. Part one presents cases illustrating legal points about domestic bribes, while part two deals with foreign bribes. The case summaries are presented in a readable, interesting manner without the legalese of many publications. Kuhne, a prolific author, is a true student of the law and presents each case and concept with enthusiasm. This is a good book for lawyers who want a quick overview of the legal concepts, as well as business people who might encounter such issues. Business Bribes is not a substitute for a hornbook or traditional casebook, but it is an excellent orientation prior to drilling down into case research on specific topics.

Some of the cases presented will be recognizable while others are more obscure. The well-known case U.S. v. Welch—dealing with allegations of domestic bribery by organizers of the Salt Lake City Olympic bid—illustrates a commercial bribery case predicated on state law using the Travel Act, an important tool federal prosecutors use to reach state offenses. Some have criticized prosecutors for stretching the act beyond reasonable grounds to assert federal jurisdiction over state matters. Welch elegantly captures that criticism. The district court’s initial dismissal of the indictment was reversed and remanded by the appellate court. Upon remand, the defendants were not only acquitted, but the judge, in open court, apologized to the defendants for their ordeal. As if to punctuate the point, the court proceeds to thank the defendants for their “tireless efforts to bring the Olympics to our great state.”

Another prominent case is U.S. v. Kay, which provides a vivid illustration of the pitfalls U.S. companies must navigate when dealing with foreign officials. David Kay was vice president of American Rice, a Houston-based business that sells rice worldwide. In response to arbitrary actions taken by the government in Haiti to generate more money from the rice trade, Kay and another company official bribed Haitian officials to get breaks and reduce costs. Kay saw the practice of paying bribes as an accepted practice there and mentioned it in an offhand way to lawyers representing the company in an unrelated matter. The lawyers reported the matter to the board who reported to the U.S. Securities and Exchange Commission. Things then took a dramatically different turn. Kay and his cohort were both convicted of conspiring to violate the Foreign Corrupt Practices Act and multiple counts of bribery. Kuhne follows the case through appeal and distills the legal principles to be learned.

While I picked two cases from the two dozen used in the book, others might gravitate to different ones. The reader will find all the examples to be useful and informative.TBJ


is head of the litigation and investigations practice for the Dallas office of Winston & Strawn. He has more than 30 years of experience investigating and litigating complex civil and criminal cases, including high-profile money laundering, public corruption, securities fraud, insider trading, health care fraud, and civil and criminal fraud cases.

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