Bribery to retain foreign business no barrel of laughs

I don't know whether Assistant Attorney General Lanny Breuer is known for his sense of humor, but he managed to get a laugh Tuesday.

The subject was serious: a scheme by military and law enforcement products industry executives to bribe foreign government officials that culminated in Monday's arrest of 21 business leaders in town to attend the Shooting, Hunting Outdoor Trade Show at the Sands Expo & Convention Center. Indictments were unsealed Tuesday in Washington outlining a 21/2-year FBI undercover sting operation that alleges 22 people participated in an attempt to bribe a person they believed to be a minister of defense for an African nation.

In this case, the minister was an undercover agent, and the Las Vegas backdrop was fortuitous but incidental to the investigation. I say fortuitous because 21 suspects gathered at SHOT Show 2010 to conduct their business and were as easy to catch as fish in a barrel.

Breuer generated a chuckle from reporters when he recalled a colleague saying, "This is one case where what happened in Vegas doesn't stay in Vegas."

Hey, I didn't say the guy was so funny he should quit his day job. Although, come to think of it, I'll bet right now a lot of formerly secure business officials hustling international contracts wish he would.

The defendants are accused of violating the Foreign Corrupt Practices Act (FCPA), which prohibits U.S. citizens and companies from bribing foreign officials for the purpose of obtaining or retaining business. (Oddly enough, the law allows for the bribery of foreign officials in an effort to get them to conduct routine business, such as the expediting of licensing and customs processing.)

The case marks the first time the FBI has used traditional undercover techniques, such as a sting operation, to pursue a foreign bribery investigation, Breuer told reporters in a news conference call.

"The fight to erase foreign bribery from the corporate playbook will not be won overnight, but these actions are a turning point," Breuer said. "From now on, would-be FCPA violators should stop and ponder whether the person they are trying to bribe might really be a federal agent."

Although the FCPA has been law since 1977, its application has increased dramatically in recent years. Breuer is at the forefront of its use by the Department of Justice. Penalties for violating the FCPA include fines and jail time.

"Bribery of foreign government officials is still a way of doing business for too many people," Breuer said.

The defendants are accused of using bribery to broker deals to sell military and law enforcement supplies ranging from bulletproof vests to armored vehicles.

On the list of defendants, the indictment of Patrick Caldwell might be the biggest disappointment to federal law enforcement. Caldwell is the chief executive officer of Florida-based Protective Products of America.

He will have difficulty pleading ignorance of the law in the investigation despite the fact he's only been with the company since January 2009. Caldwell spent 27 years in the U.S. Secret Service, rising to the rank of deputy assistant director of the Office of Protective Operations. The decorated Vietnam veteran was once in charge of the Vice Presidential Protective Division.

Caldwell and former company CEO Stephen Gerard Giordanella are alleged to have met with the FBI's undercover agent at the Mandarin Oriental Hotel in Miami to hammer out details of a two-phased contract calling for a total of 3,650 armored body plates. The contract would include a 20 percent "commission" for a man they believed was an African nation's defense minister.

Money changed hands, and in an October 2009 follow-up meeting at Clyde's, a Washington, D.C., restaurant, Caldwell was told the defense minister "was pleased" with the product. The ex-Secret Service agent swallowed the undercover sting hook, line and sinker, according to the indictment.

The FBI and Department of Justice couldn't have sent a clearer message that the bribing of foreign officials by American businessmen is no longer a laughing matter.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.