America’s Bribery Justice Punishes Men, Spares Corporations -By Fransiscus Nanga Roka

Just in, from Pennsylvania: a verdict by a federal jury that should shame any regulator who claims the Foreign Corrupt Practices Act is still doing and can do much to deter corporate crime. Former Corsa Coal Corp. vice president for international sales, Charles Hunter Hobson was found guilty of conspiring to bribe foreign officials as well as laundering money and speculation by a wire fraud in return for winning an approximately $143 million coal supply contract from the state owned Egyptian entity, Al Nasr Company for Coke and Chemicals (Al Nasr). This is a real victory for prosecutors. And it is a scathing critique of the arbitrariness with which American justice drops its hammer.

This is the arithmetic that should cause outrage from anyone paying attention: From 2016 to 2020, Corsa Coal paid around $4.8 million in bogus “commissions” through an Egyptian middleman and proceeded straight to the bank in full knowledge that kicks-backs would fatten Al Nasr officials’ wallets. The plan funneled washed cash through banks in America and the United Arab Emirates. Hobson siphoned off over $200,000 in kickbacks for himself personally again with some carried either as physical cash from Dubai to America, others cycled through shell companies and Western Union transfers. Corruption netted Corsa Coal a $32.7 million contract. And the company that made bank off those millions? It walked. Corsa Coal, given a self-disclosure narrative and allowed to pay off just $1.2 million in disgorgement, substantially less than their profit in exchange for corporate immunity, was shunned by the Department of Justice in March 2023. Think about it: a meager round off error in the amount of a fine is all that this entity pays for structuring, financing and profiting from an international bribery scheme, while its employee goes to jail. This is not accountability. It is a liability shield marketed discount as cooperation credit.

The DOJ refers to this as ‘individual accountability’ I refer to that as corporate cowardice made possible by prosecutorial convenience. It is easier (and politically safer) for them to go after a mid-level executive with WhatsApp messages and NexisNexis-coded emails than dismantle the institutional incentives that allow a publicly traded company to treat bribery like a line item. For four years Corsa Coal’s leaders let a $4.8 million slush fund escape their oversight or approval. Those invoices were signed by somebody higher up than Hobson. Those Egyptian and the UAE wires were processed by somebody in finance. Still, no one but the salesman is laid low.

More scrutiny is deserved for Egypt’s role and none has been made. Al Nasr is not a privately owned company; it is state-owned and, thus, the bribe to obtain a breach in a $143 million contract was allegedly collectively received by Egyptian officials, not simply businessmen. Where is Cairo’s investigation? What about the officials who lined their pockets in the first place? Where is their accountability for being the very reason this scheme existed? Understanding that American courts can only go after the U.S. side of a bribery deal creates a permanent structural blind spot, allowing foreign kleptocrats to operate with impunity even as their American executives do all of the risk-taking heavy lifting and serve as well-compensated scapegoats.

This was never a one-person job, of course: Frederick Cushmore Jr., another Corsa executive, pled guilty in 2021, so this was an organizational environment, not a lone wolf act; it was a top-to-bottom corporate culture of corruption that aggravated such offenses. Until the DOJ begins prosecuting boardrooms along with and rather than just individual salesmen, and until governments like Egypt’s prosecute their own entrepreneurs who fell into corruption (and then tell the world not to worry – we have covered it up), the FCPA will continue to be what far too much of it has become: an enforcement theater that punishes individuals for sins committed by institutions they were designed/paid/profited from. Hobson deserves his conviction. So does Corsa Coal. Only one of them got it.

Fransiscus Nanga Roka

Faculty of Law University 17 August 1945 Surabaya and Managing Partner Law Firm Victorious Indonesia