Cecil the Lion was shot and killed in July. What does the death of this well-known and well-beloved lion in Zimbabwe have to do with the Foreign Corrupt Practices Act? More importantly, what are the lessons to be learned by any chief compliance officer or compliance professional from this event? Much more than you would first think, actually.
A U.S. citizen, Dr. Walter Palmer, a dentist who is a big game hunter aficionado, killed Cecil. As a U.S. citizen, he is subject to the FCPA anywhere outside the United States. Palmer employed third parties to assist him in obtaining a benefit, which in Palmer’s case was his hunt that ended in the death of Cecil the Lion. These third parties obtained various governmental permits from the Zimbabwean government to allow him to hunt in that country. These same third parties acted as hunting guides to Palmer and are alleged to have lured Cecil the Lion illegally off a protected game reserve through criminal conduct in violation of Zimbabwean law.
All of this conduct could be violations of the FCPA, and Palmer could face five years in jail for each FCPA violation.
How so? Mark Joseph Stern, writing in the online publication Slate, in an article titled “The Alleged Lion Killer Could Be Tried in the U.S.,” reported: “Palmer didn’t just stumble upon the lion: According to Zimbabwean authorities quoted in the Independent, he allegedly bribed wildlife guides $55,000 for the honor.”
The Telegraph newspaper of Britain reported, “Palmer was assisted by a professional hunter named Theo Bronkhorst who reported the incident to authorities. Bronkhorst is scheduled to appear in court alongside the owner of the land on which the lion (nicknamed “Cecil”) was killed after allegedly being lured out of the protected Hwange area.” The lion was drawn out using another dead animal as bait, and the wildlife refuge’s game wardens were bribed to ignore or even facilitate the guides’ actions.
Palmer admitted that he used these third parties to facilitate his hunt in a statement where he said, “I relied on the expertise of my local professional guides to ensure a legal hunt.” But in addition to the alleged bribes paid to hunt and kill Cecil the Lion, Palmer had a criminal record for poaching, having pled guilty to poaching charges for killing a black bear in 2008.
But before Palmer even got to the illegal hunting part of his FCPA journey, he may well have violated the FCPA. To obtain entry into Zimbabwe, a U.S. citizen is required to fill out a visa application. What are the chances that Palmer disclosed his criminal conviction for poaching when he applied to hunt in Zimbabwe? Further, additional permits are required for hunting, which include permits for the import of weapons to hunt with such as bows, rifles, pistols and ammunition. What if bribes were paid to obtain these permits?
Let’s say money was indeed exchanged to obtain such permits. (We don’t yet know either way.) Were they facilitation payments, and therefore exempt from the FCPA? That’s where that pesky prior conviction for poaching comes in. If, due to that conviction, Palmer was not allowed to obtain permits to hunt in Zimbabwe, no facilitation payment exemption is available because he would not be entitled to obtain the permits in the first place.
For the chief compliance officer, the lessons from the killing of Cecil the Lion is that you must do much more than simply know with whom you are doing business. You must actually do compliance and manage the relationship in such a way as to prevent your third parties from engaging in bribery and corruption on your behalf.
How about Palmer’s claim that he was relying on his guides to obtain the necessary permits and make sure the hunt was legal? Palmer’s claim is that he was relying on these third parties to perform these services in a legal manner. What due diligence do you think Palmer performed on these third parties?
Bronkhorst, the guide now under suspicion, was reported to be a member of the Zimbabwe Professional Hunters and Guides Association, whose motto on its website is Ethical Hunting. The association acknowledged in a statement on its Facebook page that Bronkhorst “had committed a “violation of the ethics of ZPHGA” and has been suspended from the group.” Palmer seems to misunderstand the basic premise of the FCPA, that you are responsible for third parties acting on your behalf.
Based on the foregoing, Palmer may have engaged in multiple violations of the FCPA just to get to the part where he illegally hunted Cecil the Lion. Unfortunately for Palmer, it only gets worse from there.
Apparently Palmer only wounded the lion; Cecil lived another two days before the hunting party tracked down his carcass. The hunters found Cecil with the tracking device on his collar, and immediately recognized they had killed a lion that came from a protected sanctuary: the Hwange wildlife park. They tried to disable the tracker and destroy the evidence. In other words, classic evidence of trying to cover up a crime.
Last is the Zimbabwean domestic crime involved—and while not exactly a FCPA violation, it may turn out to be the worst problem for Palmer.
First remember that no country in the world affirmatively makes legal the bribing of its government officials. In fact, it is affirmatively illegal in every country of which I am aware. This means that if you engage in any actions that violate the FCPA, you have violated some domestic anti-bribery and anti-corruption law, and you are subject to prosecution in the country where you violated the FCPA. (Remember, GlaxoSmithKline got into trouble in China and paid almost $500 million in fines for violation of Chinese domestic laws, not the FCPA or U.K. Bribery Act.)
Zimbabwe has already requested that Palmer be extradited to that country to stand trial. As the Slate article reported, “The United States has a generous extradition treaty with Zimbabwe, which contains a ‘dual criminality’ clause. Under the treaty, if an American commits an act in Zimbabwe that is illegal under both American and Zimbabwean law … America is ‘obligated’ to extradite him to Zimbabwe (and vice versa).” The article goes on to say Palmer violated the Travel Act here, punishable by five years in prison; and his bribery violations in Zimbabwe are punishable by “many years” in prison too. The dual criminality requirement is satisfied, so the United States must extradite Palmer if the Zimbabwe government wants him.
What do you think Palmer’s chances would be at a trial in Zimbabwe? More importantly, what do you think his survival chances would be in a Zimbabwean prison, where he might be the only U.S. citizen who killed one of the country’s most famous lions? What if countries where FCPA violations occur begin to demand extradition of U.S. citizens who engage in FCPA violations, or even are alleged to have engaged in FCPA violations?
For the chief compliance officer, the lessons from the killing of Cecil the Lion is that you must do much more than simply know with whom you are doing business. Performing due diligence on third parties is not enough. You must actually do compliance and manage the relationship in such a way as to prevent your third parties from engaging in bribery and corruption on your behalf.
Not only must you inform them of their obligations; you must provide anti-corruption training and monitor them going forward. Finally, if those parties do violate the FCPA on your behalf, you should certainly take more affirmative steps than Palmer did when he went into hiding.
I often say that the last place you want to be is in a Chinese jail convicted for bribery in that country. I think I can safely amend that statement to say the last place you want to be in is a Zimbabwean jail for bribery to engage in an illegal big game hunt.