Last week, Credit Suisse settled a Foreign Corrupt Practices Act enforcement action for approximately $77 million for illegally hiring family members and close personal friends of Chinese government employees and employees in Chinese state-owned enterprises. This case follows a straight line of enforcement actions involving Bank of New York Mellon, Qualcomm, and most recently JPMorgan.
Some commentators have claimed that the practice of hiring family members of customers is not only long and time honored but a standard business practice, across the globe and one employed here in the United States. What these commentators fail to understand, however, is that under the FCPA if the intent in the hiring of a family member or close personal friend is to influence a decision maker at a foreign government or state-owned enterprise to confer a benefit, then the FCPA has been impacted. That benefit can be a new contract, contract renewal, tax benefit, confidential inside information, or the wide variety of other conduct that constitutes a benefit under the FCPA.
