USA Law and Practice Contributed by: Eric Bruce and Justin Simeone, Freshfields US LLP
or federally funded programmes (18 U.S.C. Sections 641, 654, and 666); • conflicts of interest, generally caused by federal officials engaging in official acts that could affect their personal financial interests (or those of their family members, their future employers, or certain affiliated organisations (18 U.S.C. Sections 207–08); and • acting with the specific intent to deprive the government of its intangible right to “honest services”, such as the public official’s uncom - promised judgment, discretion, etc (18 U.S.C. Section 1346). 2.5 Intermediaries The FCPA and domestic statutes apply to offences committed through an intermediary. Liability against a principal may arise for pay - ments made by an agent or intermediary if the principal “knew” about the misconduct. This includes when the principal was aware of a high probability that the agent was making improper payments, even if the principal did not know about a specific payment or consciously avoid - ed learning about the payment (ie, remained “wilfully blind” to it). Companies subject to US jurisdiction commonly conduct due diligence on prospective intermedi - aries to mitigate these risks. For example, “red flags” in this type of diligence may include com - mission payments to the intermediary in excess of market value, a family or other relationships between an agent and a government official, or a recommendation of a particular agent by a gov -
key statutes that concern domestic and foreign lobbying activities. The Lobbying Disclosure Act (LDA) is codified at 2 U.S.C Sections 1601 et seq. The LDA defines a “lobbyist” as an individual who spends more than 20% of their time each quarter on “lobbying activities”, which encompass communications that seek to influence federal legislation, regula - tion, administration, and nomination processes. It does not apply to media organisations. The LDA requires lobbying entities to register and provide quarterly reports on lobbying activities. The Clerk of the House and Secretary of the Senate administer the law. The penalties include fines of up to USD200,000 per violation and, in some cases, up to five years in prison. In turn, the Foreign Agent Registration Act (FARA) is codified at 22 U.S.C. Section 611 et seq. FARA defines a “foreign agent” as an individual who, on behalf of a “foreign princi - pal”, engages in political activities, acts in a public relations capacity, solicits or dispenses anything of value, or provides representation before any US government agency or official. A “foreign principal” is a foreign government or political party, a person outside the US (unless a US national), or group of persons organised under the law of or having its principal place of business in a foreign country. It does not apply to certain religious entities, academic groups, and legal representatives in legal proceedings. Foreign agents must register with the Attorney General within ten days of starting their activi - ties, even if there is no monetary compensa - tion for their work, and they must comply with semi-annual reporting obligations. The penalties include fines of up to USD250,000 for each vio - lation and up to five years in prison.
ernment official. 2.6 Lobbyists
The national legislation obligates firms and individuals across industry sectors to disclose efforts to influence public officials. There are two
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