DOJ Allows Hiring of Foreign Official under the FCPA

On April 19, 2010, the United States Department of Justice ("DOJ") issued its first FCPA Opinion Procedure Release of 2010, and the first since August 2009.

The Release was requested by a U.S. company ("the Company") (a "domestic concern" within the meaning of the FCPA) which had entered into a contract with a U.S. government agency to design and build a facility in a foreign country. This contract required the Company to hire individuals to work at the facility as directed by the U.S. government agency.

Pursuant to the contract and at the request of the foreign country, the U.S. government agency directed the Company to hire a local individual as the Facility Director. However, this individual was simultaneously serving as a paid officer for an agency of the foreign country's government, and was therefore a "foreign official" under the FCPA.

DOJ opined that it would not pursue an enforcement action under these circumstances since the Company was contractually bound to hire and pay the foreign official, and only did so at the direction of the U.S. Government Agency. Notably, DOJ acknowledged that the individual's services as Facility Director were "separate and apart from" the services performed by the individual as a foreign official. In an apparent nod to the fact that the FCPA only prohibits payments that are made "corruptly," DOJ also noted that the Company would not gain any improper advantage by hiring the Facility Director since the individual did not have any role in matters affecting the Company vis-à-vis his government.

For the release, go to: http://www.justice.gov/criminal/fraud/fcpa/opinion/2010/1001.pdf