Foreign Corrupt Practices Act

AuthorInternational Law Group

In the Fall of 1994, Saybolt de Panama, S.A., a subsidiary of Saybolt International B.V. (a Dutch company), was looking to buy or lease property in Panama on which to build a laboratory and office complex. Saybolt is a world-wide company which specializes in testing bulk commodities such as oil and gasoline.

Saybolt International owned a U.S. subsidiary, Saybolt North America, Inc. (SNA), a Delaware corporation with its principal place of business in New Jersey. David Mead, the CEO of SNA and manager of its Panamanian operations, eventually found a suitable property in the Panama Canal Zone. To lease the property, however, would supposedly require a $50,000 bribe to a Panamanian government official.

Mead raised the bribe issue at an SNA board meeting in New Jersey in November 1995. Board member and Attorney, Philippe Schreiber of the firm of Walter, Conston, Alexander & Green, P.C., advised the board that SNA could not itself pay the bribe without incurring legal liability.

A few weeks later, Schreiber allegedly led Mead and others to believe that SNA could legally make the payoff by routing it through its Dutch affiliate. On this assumption, an SNA employee traveled to Panama in December 1995 and delivered the $50,000 to a go-between of the Panamanian official.

While U.S. officials were looking into possible environmental crimes by SNA in 1996, it searched SNA's New Jersey offices. The search turned up evidence of the Panama bribe.

The Foundation of the Shareholders' Committee Representing the Former Shareholders of Saybolt International, B.V., sued Philippe Schreiber, Esq. over the allegedly bad legal advice she had given about the legality of a bribe under the Foreign Corrupt Practices Act (FCPA) [15 U.S.C. Section 78dd-1].

The FCPA provides, in relevant part, that "[i]t shall be unlawful for any domestic concern ... to make use of the mails or any instrumentality of interstate commerce corruptly in furtherance of an offer, payment, [or] promise to pay ... to - (3) any person, while knowing that all or a portion of such money ... will be offered, given or promised, ... to any foreign official ... for purposes of (A)(I) influencing any act or decision of such foreign official ..."

SNA eventually pled guilty in Massachusetts federal court to FCPA violations. Later on, a New Jersey district court convicted its CEO after a trial.

In 1997, Core Laboratories, N.V. bought Saybolt International and its controlling interest in SNA. Under the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT