Bribery Versus Business Courtesies


Bribery Versus Business Courtesies



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Full transcript available below:

Hello everyone and welcome to todays webinar, hosted by me Joe Boyhan and John Kearney of MyComplianceOffice and compliance expert Michael Volkov. 

Let's go on to the next, and take a look at what's legal versus illegal, in terms of the gifts, meals and entertainment. We all know, and today is by the way the five year anniversary of the SEC and DOJ resource guide, so happy birthday to you. I still contend it's the most valuable document that's out there in terms of guidance. What we're trying to do is distinguish between, and what the SEC and DOJ try to do, is distinguish between what are modest or reasonable expenses. Where as they call it, a small gift or token of esteem or gratitude, as a way to show respect for each other, and to build cordial relations. On the other hand, if the gift is, let's say excessive, and it's done in a way that indicates that it's done secretly, then it looks more and more like a bribe.


And so, one of the things that we look at to try to prove, I always say you want to act like you're not a criminal. How do people who are not criminals act? Well, they do things openly, transparently. They properly record in the books and records, the expense, and they make sure that this is done to reflect esteem or gratitude. Obviously it's got to be permitted under local law, but is not done to curry, what I would call improper favors. We have the prohibited bribes and the line that is drawn, and we have what are called cordial relations or effective and polite business courtesies.


Let me show you some examples. Let's go to the two cases of SciClone and Avon products. Now Avon products, there was a 2014 case, one of the most egregious cases in my mind. It really, in that case we had $8 million in gifts, cash and non-business meals, travel, entertainment. I love the play on Avon is calling, because Avon is calling with basically a basket of cash.


SciClone is an interesting case that occurred in 2016, and it gets sort of disparaged, or people talk about it where basically there was, not only was there sort of a gift giving onslaught to VIP clients, hospital presidents, doctors, but it extended beyond to just giving them, let's say beer at a beer festival and golf. It gets sort of bastardized into saying, "Oh, you can't give golf. You can't give beer. You can't give them a free round of golf." That's not true.


What was done here was it was done in the context of emails and also payments that were made to family members, family dinners. Treating them as VIP clients, which meant family vacations. Obviously there were evidence in the emails of exactly what their intent was, which was to increase sales to these specific state-owned hospitals. So don't get tricked by things that you might read about SciClone, it doesn't prohibit beer, and it doesn't prohibit golf. Believe me, you can't prohibit beer, because a lot of people would be in trouble then. 


This webinar was co-hosted with Michael Volkov of VolkovLaw.


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