The Harvey Weinstein sexual harassment scandal may be one of the seminal events in this area; book-ending the national conversation which has been ongoing since the Anita Hill testimony at the Clarence Thomas confirmation hearings some 25 years ago. The questions surrounding who knew both what and how inside The Weinstein Co. will be debated if not litigated for years to come. Of course, the board of directors’ role will be front and center throughout this debate.
As you might expect from The Man From FCPA, there is even an FCPA angle in all of this. It seems that Weinstein had used company funds to purchase a $75,000 dress from his (now) estranged wife’s fashion line, Marchesa. This dress was then given to an un-named Qatari individual who was prepared to invest some $20,000,000 in an animation movie fund. Apparently, this animation movie fund was not approved by the Weinstein Co.’s board of directors and, when he was called out on it, Weinstein reimbursed the company for the expense. Apparently believing that the obvious and numerous conflicts of interests were resolved, there was no further action taken.
But what about the FCPA angle? If the $75,000 dress was given to a Qatari government official or one who was doling out money from the country’s sovereign wealth fund, there could easily be FCPA implications. Yet, even if the Qatari individual involved was not a government official, royal family member, or employee of the Qatari sovereign wealth fund, there could still be implications under the Travel Act, which incorporates state law for illegal acts that cross both state lines and international boundaries. In California, payment or something of value in excess of $1,000, can be considered an illegal commercial bribe, punishable under the California penal code. This has been used before by the Justice Department in the Control Components FCPA enforcement action.
There will be many avenues of fallout from the Harvey Weinstein scandal. It will certainly be interesting to see if an FCPA enforcement action is one of them.