CALIFORNIA’S BRIBERY STATUTE
Most business executives and business owner’s think that the federal government is the only “Big brother” worry in the theater of corrupt business practices today. They are also under the mistaken opinion that such laws only affect activities with business officials.
Lately, the federal government has used the Foreign Corrupt Practices Act to pursue corrupt practices involving both public officials and private parties.
The United States Department of Justice usually has its eye on the big dogs – they usually, with few exceptions, refuse to go after cases worth less than “Seven Figures” but there is a case where it pursued an individual for embezzling mid six figures from the American Red Cross in California– but that is a different story.
Did you know, however that California has a bribery statute that affects private conduct between non government personnel in business. California Penal Code Section 641.3 states: that “Any employee who solicits, accepts, or agrees to accept money or anything of value from a person other than his or her employer, other than in trust for the employer, corruptly and without the knowledge or consent of the employer, in return for using or agreeing to use his or her position for the benefit of that other person, and any person who offers or gives an employee money or anything of value under those circumstances, is guilty of commercial bribery.” It does not apply where the amount of money or monetary worth of the thing of value is two hundred fifty dollars ($250) or less. It is
punishable by imprisonment in the county jail or in the state prison for 16 months, or two or three years if the amount of the bribe exceeds one thousand dollars.
So, if you are a subcontractor and take your buddy, without his boss, out to a strip joint and buy him $500.00 worth of lap dances ( Hey, trust me. It has happened!), you could be facing a short vacation in the county joint. Send he and his family to Hawaii without his boss knowing, you may have a serious problem.
You would think that it would take a significant amount of private investigation for a local district attorney investigator to find out about such activities – but not really. The rumor mills in any company, small or large are overwhelming. If a competing sales person gets wind of a violation and feels that the competition is unfair, you may have an informant.
The possible adverse scenarios are endless. Typically, whenever you have a smaller provider of goods or services with high paid sales staff and a large company who is
procuring the goods or services through a procurement manager or officer, the potential exists. This scenario is not the only danger zone. Out there, despite the economy, as wehave learned, a bad economy will do much to bring out the worst in business.
What can and will the government do? I have known them to set up businesses and owners with paid government informants who infiltrate the target company and become one of the target company’s employees – the fox in the hen house technique. I have known government to plant wires on people in the industry. And of course, there is always the old search warrant, which can be devastating. Government, both state and federal, has been known to take and keep entire computer systems for months while the investigation proceeds.
What can a business do?
First, know that it does exist.
Second, consult with a white collar crime criminal defense attorney that has experience with corrupt business practices that also is familiar with employment law to see if there is a potential for problems.
Third, if your business is potential target and you don’t have a policy governing corruption now, have your attorney develop one – and publish it. Inform your customers, your potential as well as existing employees of the policy.
Finally, if you are a victim, remember that a violation can be the basis for termination and a tort. While it may cost you money, filing suit against a violator will send a message to others of your willingness and insistence on practices that are legal and fair and will go a long way to help government out of your back yard.
Several years ago, I represented a small business owner in a case against the federal government for criminal violation of the Sherman Anti-trust act. It appeared that the conspiracy involved seven or eight local businesses where both government and private corruption was involved. The investigation found that local government was dirty. Although a dozen federal indictments were issued after a lengthy grand jury proceeding was undertaken, the government never proceeded because it would have made the federal government look terrible.
Government does not like to look bad – but where private industry alone is involved, they are the first ones “In the pool”. “Over filing” is rampant in many counties. Be careful out there and remember the an ounce of prevention is worth a pound of cure.
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