Tuesday, April 5, 2011

A Blast From the Past

Proud to be a Butler Bulldog. It was a fun ride!


It is always enjoyable hearing from readers.

Richard Tarlton of California recently contacted me about an apparent bribery demand from the past .... the way past.

In the 1930's, Richard started a stamp collection. One of the stamps, given to him by his father, was still attached to an envelope received from Venezuela with the correspondence inside.

As you can see here, the January 6, 1911 letter is hard to read, but as Richard said, my occupation has been pharmacy, thus I am good at reading bad handwriting.

The context of the letter is as follows.

Richard's grandfather, P.E. Tarlton, was an inventor and very much into applications of electricty for new uses. In 1911, P.E. Tarlton owned the American Magnetic Firm Alarm Company in Ada, Ohio. P.E. Tarlton's first big invention was an electric fire alarm system that could be installed in a large city, and when someone turned on the fire alarm, it would indicate which fire area in the city was in need of help. P.E. Tarlton's first patent is here.

American Magnetic Fire Alarm Company, Richard explains, evidently advertised or was listed in a trade publication called the "Thomas Register of American Manufacturers and First Hands."

Apparently, Dr. C.A. Bosi of Caracas, Venezuela and a friend, Dr. Pensa, were studying, with the agreement of local authorities, the installation of a fire extinction service in Caracas and evidently saw the listing. Dr. Bosi, in the letter, is requesting a catalogue and pictures of the equipment.

In the letter, Dr. Bosi wants to know the conditions P.E. Tarlton would make to him if he were to get the order. Dr. Bosi emphatically states, "in this country, it is always necessary for succeeding in business to leave some benefit to the authorities who pass the order."

According to Richard, he has never seen any evidence that his grandfather secured the Caracas order.

Let's assume P.E. Tarlton and American Magnetic Firm Alarm did "leave some benefit to the authorities" in securing the order.

Assuming the FCPA was on the books in 1911, what issues would the company have faced?

Voluntary disclosure? Related civil litigation such as derivative suits? Would American Magnetic Fire Alarm Company been required to engage a compliance monitor? How much money would the company have spent on investigating the conduct at issue? Would the company have expanded its investigation and compliance review to other countries?

What about Dr. Bosi, would there be jurisdiction over him? What about the local Venezuelan authorities - any proceeds laundered through U.S. accounts?

Of course none of these were issues in 1911.

But they are some of the issues in 2011.

What will the issues be in 2111?

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