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U.S. cracks down on firms that pay bribes to foreign officials

Federal authorities are now prosecuting businesses that try to win contracts by making payments to officials of government-owned businesses. Executives of an Azusa company are among those being tried.

March 11, 2011|By Stuart Pfeifer, Los Angeles Times

And in January, Maxwell Technologies Inc., a San Diego manufacturer of energy products, agreed to pay an $8-million penalty to resolve criminal charges that it bribed Chinese government officials to secure sales to state-owned utilities in China.

U.S. authorities are paying particular attention to cases involving China.

"What makes China such a big issue is it's an economic powerhouse that everyone wants to participate in," Murphy said. "And its industry is dominated by government.

"China Mobile, the world's largest mobile telephone company, is still majority-owned by the Chinese government, which means everybody that works there is a foreign official under the Foreign Corrupt Practices Act."

Government officials in some countries expect gratuities, so U.S. companies should train employees about how to avoid trouble, Murphy said.

"What's too much? How much is too much? There's really no clear-cut line," he said.

"If you're having a factory opening and an official shows up to cut the ribbon, certainly you can give him hats or shirts with your company logo on it," he said. "But if you say the guy is into golf and you want to fly him to the U.S. and take him to the Masters, that's probably too much."

Breuer, though, said the law is clear.

"There's no fuzzy line. The cases we're bringing, we're talking about bribery. Nobody is being prosecuted because they bought someone a tuna fish sandwich," Breuer said. "We are not pursuing gray areas. We're pursuing those who bribe officials."

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