Analysis of Government Instrumentality Factors in FCPA Prosecution

Analysis Group supported two corporate governance experts, Nabil N. El Hage, a former associate dean of Harvard Business School, and E. Han Kim of the University of Michigan, working on behalf of a defendant accused of bribing employees of state owned enterprises (SOEs) of foreign countries in the Foreign Corrupt Practices Act prosecution, USA v. Carson et al. One of the issues was whether the SOEs could be considered government instrumentalities as defined by the FCPA. Mr. El-Hage and Professor Kim analyzed a range of factors that determine whether an entity is a government instrumentality, including those identified by the presiding judge, James V. Selna. Among these factors were the SOEs’ ownership and governance structure; the SOEs’ obligations and privileges under foreign law, including the status of employees; provisions for minority shareholder protection; and financial relationships between each SOE and its respective government. The case was resolved without a trial. The Analysis Group team was led by Managing Principal T. Christopher Borek, and Vice President James Rosberg.