FCPA: Use of the Travel Act in Conjunction with the FCPA

In terms of the FCPA, the Travel Act has been used in situations where the issue may arise as to whether a parastatal or government-owned or controlled entity may be involved.1  This, of course, assumes that territorial jurisdiction can be established.  But it may also provide a basis for substantive charges in situations where violations of the anti-bribery provisions of the FCPA may be involved.

In United States v. Baptiste a scheme was alleged to bribe Haitian government officials to secure approval for a port development project in Haiti.2  Money raised through a non-profit entity established in the United States with “a stated mission of helping the impoverished in the Republic of Haiti.”3  Funds were funneled through the non-profit to conceal and facilitate the payment of bribes to Haitian officials in violation of the anti-bribery provisions of the FCPA.4

The Travel Act applies to anyone “[w]hoever travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign commerce.”5  It has often been used in situations involving commercial or private bribery under a state statute.  However, the Travel Act can also be applied to situations involving a federal bribery statute.  The definition of “unlawful activity” entails “extortion, bribery, or arson in violation of the laws of the State in which committed or of the United States.”6

In United State v. Baptiste the travel within the United States as well as from Spain to the United States were alleged as the basis for violations of the Travel Act.7  The travel was used in connection with furthering the scheme to bribe the Haitian officials8   The interstate and foreign travel therefore subjected the defendants to the prohibitions of the Travel Act.

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1In United States v. Thomson, the charges stemmed from the participation by officers of Health-South in a scheme to bribe the director general of a Saudi Arabian foundation to secure an agreement to provide staffing and management services for a 450-bed hospital in Saudi Arabia.  United States v. Thomson, No. CR-04-J-0240-S, Indictment (N.D. Ala., filed July 28, 2004), reprinted in 3 FCPA REP. 699.907400.  The director general solicited a $1 million payment from HealthSouth ostensibly as a “finder’s fee.”  Against the advice of counsel, the officer agreed to pay the director general of the Saudi Arabian foundation.  To facilitate the arrangement, officers arranged for the director general to execute a sham consulting contract with a HealthSound-affiliated entity in Australia.  A conspiracy was alleged in addition to violations of the Travel Act for using the facilities of interstate commerce to promote unlawful activity, namely commercial bribery in violation of Alabama law, and of the FCPA’s record-keeping provisions by causing HealthSouth’s books, records, and accounts to falsely and fraudulently reflect that the payments made to fund the sham consulting contract were made for legitimate purposes.

2Superseding Indictment, United States v. Baptiste, No. 17-cr-10305 (D. Mass., filed Sept. 30, 2018), ECF No. 74.

3Id. at  ¶ 3.

4Id. at  ¶ 18.

518 U.S.C. § 1952(a) (2018).

6Id. at § 1952(b)(i)(2) (emphasis added).

7Superseding Indictment, supra note 2, at ¶¶ 15,17, 21.

8Id.

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