Tuesday, November 17, 2009

Of Course It's Because of the Oil

"Bribe takers" get a free pass under the FCPA as the statute only applies to "bribe givers."

However, in 2004, President Bush signed Proclamation 7750 "To Suspend Entry As Immigrants or Nonimmigrants of Persons Engaged In or Benefiting From Corruption" (see here). The Proclamation states:

"...that it is in the interests of the United States to take action to restrict the international travel and to suspend the entry into the United States, as immigrants or nonimmigrants, of certain persons who have committed, participated in, or are beneficiaries of corruption in the performance of public functions where that corruption has serious adverse effects on international activity of U.S. businesses, U.S. foreign assistance goals, the security of the United States against transnational crime and terrorism, or the stability of democratic institutions and nations."

Section 2 of the Proclamation says that its prohibitions "shall not apply with respect to any person otherwise covered [...] where entry of the person into the United States would not be contrary to the interests of the United States."

So what happens when the Forest and Agriculture Minister of Equatorial Guinea and the son of Equatorial Guinea's president shows up at the U.S. "doorstep" on his way to his $35 million Malibu estate?

To find out, here is the article from today's NY Times.

Short answer, he is let in. Despite the fact that federal law enforcement officials believe that "most if not all" of his wealth came from corruption related to oil and gas reserves in his home country. Despite the fact that the DOJ believes that he "may be receiving bribes or extortion payments" from oil companies operating in the country.

Why is he allowed in the U.S. in seeming contradiction to Proclamation 7750?

Well, at least according to the former U.S. ambassador to Equatorial Guinea it is "of course because of oil."

A former State Department official says that the State Department (which is responsible for enforcing the proclamation) "seem[s] to lack the backbone to use this prohibition."


Interesting side note - in contrast to the FCPA's "foreign official" definition, Proclamation 7750 applies to "public officials or former public officials."

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