By D. Anthony Rodriguez and Michael P. Kniffen
Much attention has be en given to t he Depar tment of
Justice’s investigation and prose cution of overseas cor-
ruption u nder the Foreign Corr upt Practices Act (FCPA)
— a nd deservedly so. I n 2011, the DOJ collected over a
half-bi llion dollars in FCPA penalt ies and disgorgement, marking four
consecutive years in which collections exceeded that amount — includ-
ing the record amount of $1.8 bill ion in 2010.
As the DOJ has made clear, however, the FCPA is not the only statute
at its disposal for prosec uting overseas cor ruption. U.S. companies
should be fam iliar not only w ith the FCPA, but a lso with the ma il and
wire fraud st atutes. 18 U.S.C. Sections 1341 a nd 1343. Companies
should also be familiar with the Travel Act. 18 U.S.C. Section 1952.
When combined with the FCPA, the DOJ has used the Travel Act to
reach both public and commercia l bribery abroad.
The Travel Act does not prohibit commercial bribery itself, but rather
the use of the facilities of interstate or foreign commerce , such as mail,
email, Inter net, fax or telephone in the commission of an “unl awful ac-
tivity.” The Travel Act recognizes bribery as one of the covered “unlaw-
ful acti vities.” 18 U.S.C. Section 1952( b). The government may charge
a violation of the Travel Act even if the bribe was unsucce ssful, so long
as the facilit ies of commerce were used for the attempted bribe.
A bribery offense may be sufcient to support the elements of a Trav-
el Act violation i f the following occur: (1) travel in i nterstate or foreign
commerce, or use of the mail or any facilit y of interstate or foreign com-
merce; (2) i ntent to promote, manage, establ ish, carry on, faci litate or
distribute the proceeds of any br ibery; and (3) per formance of or at-
tempt to per form an act promoti ng, managing, establish ing, carryi ng,
facilita ting or distributing the proce eds of bribery. See United States v.
Welch, 327 F.3d 1081, 10 90 (10th Cir. 20 03). The Supreme Court has
held that Congress intended “br ibery” to encompass state commercia l
bribery statutes. Perrin v. United State s, 444 U.S. 37, 50 (1979). Thus,
the Travel Act ma kes it a federal offens e to v iolate state commercial
bribery laws whi le traveling in or using the facilities of interst ate or
foreign commerce.
Scope.
Under the government’s expansi ve interpretation, the Travel Act ap -
plies when the t arget of the bribe is located abroa d. That means if you
are in t he U.S. (within a st ate with a commercia l bribery stat ute), and
you send an email or make a call with the intent to facilitate an overseas
bribe, t he government wil l argue that the Travel Act applies. Nor, ac-
cording t o the DOJ, can you escape t he Travel Act by simply making
the cal l or sending the email wh ile traveling abroad if the purpose of
the trip was to facilitate the bribery. It is only in those rare circumstanc -
es in which there is no territorial nexus to the U.S. that the government
would concede the Travel Ac t would not apply. To illust rate, consider
these examples:
Illustration 1: A C alifornia compa ny sends its employee to Japan to
obtain business. While in Japa n, the employee of fers a bribe to the
Japanese company. Employee subsequently returns to Califor nia. Al -
though the bribe occurr ed in Japan, the Travel Act applies because the
employee travelled in foreign com merce with the intent to bribe.
Illustration 2: Same facts as I llustration 1, except t hat the employee
stops at a con ference in China rst, visits the company’s subsidia ry in
Taiwan, and then goes to Japan. The Travel Act stil l applies be cause
interposing intermediate stops on a multi-legged jour ney taken for an
unlawf ul purpos e does not immun ize the company or the employee
from prosecution. See United States v. Weingar ten, 632 F.3d 60, 71
(2d. Cir. 2 011); United S tates v. Carson, No. 8:09- cr-00077-J VS, Order
Denying Defendant s’ Motion to Dismiss Counts 1, 11, 12 a nd 14 of the
Indictment, Doc . No. 440, C.D. Cal. S ept. 20, 2011, at 14-15.
Illustration 3: A California company sends its employee to its Taiwan-
ese subsidiary to act as an intermediar y. The employee stays in Taiwan
for several years . At some point the employee visits Japan and offers a
bribe. The employee returns to Taiwan and resu mes his or her role as
an intermedia ry. Subsequently, the employee returns to the U.S . Here,
the Travel Act does not apply because the travel was between t wo for-
eign nations without any territor ial nexus to the U.S., and thus “foreign
commerce” is not implicated. S ee Weingarten, 632 F.3d 6 at 70; Carson,
Doc. No. 440, at 14-15.
Extraterri toriality.
The Travel Act’s jur isdictional reach over foreign bribery is an un-
settled a rea of the law. In dec iding a private securities case unrelated
to the Travel Act, the Supreme Court held that a s tatute does not have
extrater ritorial r each unless Congress clearly express ed its afrma-
tive intention to give the statute extraterritor ial effect. Morrison v.
National Australia Bank Ltd., 130 S. Ct. 286 9, 2877-78 (2010).
Arguably, since under Morrison general references t o “foreign com-
merce” do not defeat the pre sumption agai nst extrater ritoriality, the
Travel Act ’s express and repeated references to “foreign commerce”
may not be sufc ient to confer extraterrit orial jurisd iction. But, thus
far only one cou rt ha s considered Morrison in connection with the
Travel Act, and that cour t found that Morr ison did not apply to Travel
Act violations. S ee Carson, Doc. No. 440, at 6-7.
court held that cri minal statutes may apply ex traterritorial ly even
without an explicit Congressiona l statement. Because Morris on did not
address a criminal st atute or expressly overrule Bowman, t he Carson
court held that t he Travel Act could be applied to conduct outside of
the U.S.
Moreover, also relying on the fact that the alleged br ibe was com-
pleted in Cali fornia, t he Carson court determined that there was no
need to consider extrater ritoriality issues.
Illustratio ns.
The Travel Act and the FCPA are not mut ually exclusive. In fact, the
government regula rly includes counts under both st atutes in prosecu-
tions. Here are several exa mples of recent Travel Ac t/FCPA prosecu-
tions:
United States v. Control Compone nts, Inc., July 31, 2009 (C.D. Cal.).
Californ ia-based valve maker C ontrol Components Inc. (CCI) pleaded
guilty to violat ing the FCPA and the Travel Act. CCI’s guilty plea under
the Travel Act involved bribing employees of private companies in con -
travention of Californi a’s anti -commercial br ibery law. CCI agreed to
pay $18.2 mill ion as part of its plea agreement for the FCPA and Travel
Act violations.
United States v. Frederic Bourke, July 10, 2009 (S.D.N.Y). Bourke was
found guilty of a conspiracy t o violate the F CPA a nd the Travel Act
for bribing senior government ofcials in Azerbaijan to ensure pr iva-
tization of the State Oil Company. The indictment made cle ar that the
‘‘unlaw ful activity’’ at issue under the Travel Act was the violation of the
FCPA’s anti-bribery provisions. He was sentenced to a year and a day in
prison and ned $1 mil lion.
United States v. Stuart Carson, April 8 , 2009 (C. D. Cal.). S ix former
executives of CC I were indicted for violat ing the FCPA and the Travel
Act. T he executives were charged w ith paying bribe s to employees of
private compan ies under California’s commercial brib ery law.
United S tates v. S teven Ott and Roger Young (ITXC Corp.), July 27,
2007 (D.N.J.). Two former IT XC executives pleaded guilty t o conspir-
ing t o violate t he FCPA and the Travel Act in connect ion with il legal
payments made to employees of foreig n state-owned a nd foreign-
owned telecommun ications carriers i n Nigeria, Rwanda, and Senegal.
The purpose of the p ayments was to obta in and retain contracts for
ITXC. The executives received ve years probation and 3 to 6 months
of home connement.
United States v. Robert E. Thomson and James C. Reilly, July 1, 20 04
(N.D. A la.). Two former ofc ers of HealthSout h Corporation were in-
dicted for violating the Travel Act and the FCPA in connection with the
alleged br ibery of the d irector general of a Saudi Arabia n foundation.
The ofcers were acqu itted of all chargers after a jur y trial.
The Travel Act reaches commerc ial bribery that the FCPA does not.
When coupled with the FCPA, the Travel Act allows the government to
reach bot h public and commercial foreign bribery. In addition to the
justied concern about FCPA issues , corporate complia nce programs
also must be designed to prevent and detect com mercial bribery.
Travel Act: buttressing the FCPA
Michael P. Kniffen is an associate at
Morrison & Foerster LL P. He has a broad
practice in complex business litigation at
the trial and appellate levels. He specializes
in intellectual property and international
business disputes .
ognition of “being r ight.” If only I believed this all the time.
But wh at about mistakes t hat are the product of i nadvertence or haste?
Those are t he ones that can dri ve you nuts. And no amount of ex plaining or
excuses gets you off the hook. And of ten if you point out the m istakes that
others make, they may never speak to you again. Many years ago I cal led a
colleague in another district and teased him about his use of mixed meta-
phors in an otherw ise well-writ ten opinion. Twenty years later we renewed
our friendship. A justice, now retired, told me he never pointed out grammati -
cal errors to his colleagues at the risk of offend ing them. Better they should
be offended and author a better opinion, one in which their colleagues will
happily concur.
What I have said so far applies to briefs, motions, writ petitions, letters, and
even a column. Some of my loyal readers gleefully pour over my monthly of-
ferings sear ching for misplaced modiers, spel ling mistakes, fact ual errors,
grammat ical slips, a nd lapses in coherence and clarit y. None are shy about
pointing them out to me. I have waged a reasonable defense when appropriate
and have acknowledged error when my back was to the wall. But it seems the
more I own up to my blunders, the more I unwittingly encou rage my readers
to ferret out more of these way ward pests to drop on my doorstep. I cannot
help but compa re this ritua l to my cat bringing home a decapitated mouse,
which he deposits on the bed. “Hey gu ys, look what I caught.” Nevertheless,
I publicly disclose these gaf fes so that we all prot from them.
My dea r friend, my colleag ue, my buddy, the ever perspic acious Justice
Nora Manella na iled… I mean, wrote me about a n indefensible error I made
in my last column. And just imagine, together we have taught legal writin g to
attorneys. I wonder if she will consent to teach w ith me in the future. If so, I
bet she will demand top bill ing.
Justice Manell a writes in her e-mail, “I was surprised to see your column
drawing at tention to the ‘error’ in the use of the objective, rather tha n
nominative, version of the rs t person singular pronoun (‘It is I’ v.’It is me’).”
Parenthetica lly I concede this technica l error, but defend it. This phrase is
used so commonly t hat even Fowler begrudgingly acknowledge s and tacitly
accepts its use. “ Who’s there?” “It is I” sounds so sti lted. I prefer, “No sweat,
it’s just me.” And Fowler puts me in good company. He points out that “It ’s
me” has distinguished ancestry. “ Shakespeare w rote All debts are cleared
between you and I, and Pepys [wrote] Wagers lost and won between him and
I.” (Fowler’s Modern English Usa ge (2d ed. 1983), Oxford Univer sity Press,
p. 258.)
But the “It is I” nit is not Justice Manella’s main point. Her ema il continues
with her puzzlement over my r ecognition of the “It is I” issue, while “at t he
same time,” I committed “another error in t he same column.” She writes,
“I refer specica lly to the rst sentence of paragraph seven.” Here she
quotes me: ‘ “This all brought home to me that some of the most suc cessful
attorneys I know are those th at have developed skills and insight into other
disciplines.’” She then critiques. “‘[T]hat’? S ay what you will about lawyers,
surely your friends are not inanimate soulless automatons, but sentient hu-
man beings who deser ve to be collectively referred to as ‘who.’”
Of course she is right on. She continues w ith a tongue-in- cheek escape
clause, “ Then I realize d — ah hah — he’s j ust baiting us aga in, hoping that
sticklers (sticklettes?) like me wi ll nd yet another nit to pick. OK, I plead
nolo to taking the ba it. Very clever of you, though.”
Of course I did not deliberately place this grammat ical error in my c olumn.
The sentence in which it appeared replaced a sentence that was awkward and
confusing, but one in which “that” wa s properly used. Just mi nutes before
the colum n went to press, I ca lled in to my hapless editor the repl acement
sentence with the of fending “that.” He is absolved of all responsibilit y.
My new offend ing sentenc e, unl ike its predecessor, is clear, but gram-
maticall y incorrect. One can say “so what? ” It is an annoying y speck on an
otherwise clea r windshield. I would like to get a pass, but no dice. The cliché
about haste comes to mind. Judges, lawyers and columnis ts should keep this
in mind when draf ting … anything.
In the opening parag raph, I told you I have deliberately inserted a gram-
matical error in this colum n. The rst ve readers who notify me of the
intentionally placed mista ke will re ceive a copy of my book Under Submis-
sion. Email me at arthur.gilber t@jud.ca.gov or email The Daily Journal on or
before Oct. 5, 2012. The arbitrar y decision of the judge, that’s me, is nal and
there is no appeal. Justice Ma nella is disqualied from par ticipating.
Oh heavens. I just thought of something. What about the dozens of gram -
matical er rors other than the one I have intentiona lly placed in this column ?
This involves the moral issue also r aised in the openi ng paragraph. Th at is-
sue could be of greater imp ortance than a solecism here a nd there. What do
you think?
Arthu r Gi lbert is a presiding justice of the 2nd Dist rict C ourt of Appea l,
Division Six. His previous columns are available on www.dailyjournal.com and
gilbertsubmits .blogspot.com.
What about mistakes that are the product of haste?
One may not like being reminded of his or her
mistakes, but enlightenment is of greater worth than the
recognition of “being right.” If only I believed this all the
time.
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D. Anthony Rodriguez is a par tner at
Morrison & Foerster LL P. His securities
litigation practice has included numerous
complex and high-prole represe ntations of
corporations, board committees and indi-
vidual directors, and corporate of cers in
class action and derivative litigation, SEC
matters, and internal investigation s.
Continued from page 1
The Travel Act reaches commercial bribery that the
FCPA does not. When coupled with the FCPA, the
Travel Act allows the government to reach both
public and commercial foreign bribery.
By Beth Stephens
Is a corporation a person ? According to the federal Dictionary Act, the answer
is “yes.” T he word “person” includes corporations and other business entities. 1
U.S.C. Section 1. But what does it mean to say that a corporation is a person? Does
it have the same rights as those of us who fall i nto the living, breathing subgroup
of “persons”? W hat legal rights or duties go along with corporate pe rsonhood?
These questions hi ghlight a stark comparison: How is it p ossible that a corporation
can have a constitutionally protected right to contribute unlim ited sums of money to
inuence an election, but that same cor poration cannot be sued for genocide? That is
the unlikely resu lt of two cases decided in 2010: the Supreme C ourt’s decision in Citi-
zens United v. Fed. Election Comm’n, 130 S. Ct. 876 (2010), in which the court held that
the Fi rst Amendment protects a corporation’s right to make elec toral expenditu res;
and the 2nd U.S . Circuit Court of App eals decision in Kiobel v. Royal Dutc h Petroleum
Co., 621 F.3d 111 (2d Cir. 2 010), which held that international human rights norms,
including the prohibition against genocide, do not apply to cor porations. Kiobel is
scheduled for argument today before the U.S . Supreme Court.
In Kiobel, a group of Nigerians alleged that the Dutch oil company directly con-
tributed t o torture, execut ions and other abuses comm itted by Nigeria n government
securit y forces. The 2nd Circuit dismissed their lawsuit, concludi ng that international
human rights norms do not apply to corporations. The S upreme Court is now con-
sidering b oth that challen ge to corporate accountability and the broader question of
whether any entity can be sued for human ri ghts violations that take place in a foreign
country. But the cru x of the case, and the issue that has dri ven most of the opposition
to this and similar human ri ghts cases, is corporate opposition to account ability under
internationa l law.
The Kiobel decision brushed of f the contrast bet ween a corporate right to spend
money to in uence elections and c orporate immunit y from human r ights norms, be-
cause Citizens United was based on U.S. constitutional law, whi le Kiobel applied inter-
national law. But, on th is issue, constitutional law and i nternational law are not apples
and oranges. Both rely on a shared understanding of the nature of a corporation. Inter -
national law recogni zes that the rules that bind individuals together into a corporat ion
are set by domest ic law, and that domestic law gover ns whether a corporation c an be
held liable for wrongs comm itted by its ofcers and employees . If the Supreme Court
applies in Kiobel t he same concept of a corporation that it applied in Citizens United, it
will nd that cor porations can be held accountable when they violate huma n rights.
Constitutiona l law decisions portray the corporation as a robust, mult i-dimensional
entity: a person in (al most) all its glory. Although the court s and commentators strug-
gle to ex plain exactly what that entit y is, they k now that it exist s, that it ha s agency,
and that it play s important economic, so cial, and political roles on local, national, a nd
global stages. They understa nd that corporations have rights independent of, and usu-
ally equa l to, those of the indi viduals who fund, work for, or m anage the corporat ion.
Some of the cases stop just short of sayi ng that a corporation lives and breathes.
In Kiobel, the corporation is not multi- dimensional. Indeed, it is not much more than
a cipher: “corpor ation” is an empty label, a n undened term that either appears in an
internationa l document or not. No te xture, no exploration of fu nction and role. No
discussion of just what is t his thing we cal l a cor poration. T hat analyt ical fai ling is
what has led some courts and commentators to conclude that int ernational law does
not imp ose any obligations on corporat ions, not even the oblig ation to refrain f rom
committi ng genocide.
These disti nct approaches are not the product of differenc es between the ways that
internationa l and domestic law dene corporat ions. To t he contrary, international l aw
recognize s the complex nat ure of a corpor ation and relies on domestic law t o dene
the legal implicat ions of the corporate struct ure. The problem is that the Kiobel major-
ity, and commentators endorsing its views, ignore the robust corporate identit y that
they are quick to adopt when considering a cor poration’s constitutional rights.
Internationa l law pa rallels constit utional provisions by target ing conduct, without
specif ying what actors per form the acts at issue. As Kathleen Sullivan, counsel for
Royal Dutch Petroleum in the Supreme Court ca se, has written, the First Amendment
contains no “ontological restrictions on who or what may invoke its protect ion” and
is “i ndifferent to a spe aker’s identity or qualit ies — whether animat e or in animate,
corporate or nonprot, colle ctive or individual.” Kathleen M. Su llivan, “Two Concepts
of Freedom of Speech,” 124 Har v. L. Rev. 143, 155-5 6 (2010). Human rights law is also
written in terms of c onduct, not actors: i nternational law p rohibits genocide, slavery,
torture, a nd summar y execution, and is simila rly indifferent as to whether the actor is
animate or inanimate, collect ive or individual. To paraphras e Justice Antonin Sc alia’s
discussion of the F irst Amendment in Citize ns United, the burden should be on the
corporations and thei r allies to show t hat “corporations are not covered” by human
rights p rohibitions, rather t han on the plaintiffs to show “that they are.” There is no
evidence that international huma n rights norms intend to exclude legal entities from
their prohibitions.
Is a corporat ion a person? Personally, I thi nk not, but I recognize t hat many people
(natural as well as corporate) disag ree with me. My goal here is to make a modest plea
for consistency. If corporations are people with constit utional rights, they are people
with duties as well. Our courts have recognized a complex set of c orporate characteris-
tics that constit ute corporate personhood. That sa me set of characteristics, that s ame
corporate personhood, requi res that cor porations be held liable for t he injuries that
they inic t — and even more (not less) so when the injuries at issue constitute human
rights v iolations, the most egregious inju ries identied by domestic or international
law.
US high court to hear
oral arguments in Kioble
Beth Stephens is professor of law at Rutgers, T he State
University of New Jersey- Camden. As a cooperating attor-
ney with the Center for Constitutional Rights and a member
of the Board of Directors of the Center for Justice and Ac-
countability, Professor Stephens ha s represented plaintiffs in
human rights cases similar to K iobel.
PAGE 6
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MONDAY, OCTOBER 1, 2012
SAN FRANCISCO DAILY JOURNAL
PERSPECTIVE
