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BizJet’s “Sales Manager A”: A Profile of Corruption

We do not know much about “Sales Manager A,” the “bag man” for BizJet’s corruption scheme that led to an $11.8 million settlement with U.S. authorities for violations of the U.S. Foreign Corrupt Practices Act. From the settlement documents [1], however, we know something. And what we know might reveal a common profile of corruption.

A Corrupt Businessperson’s Typical Profile. Corrupt acts often start small. Maybe payments are small. Maybe the payer justifies the payments in his or her head as legitimate business expenses. The tricky thing about corruption is that, once you start paying officials, it is hard to stop. Their requests do not end. Instead, they often get bigger. Over time, payment schemes often become more blatant.

It also becomes easier to pay. The corrupt mind plays tricks on itself, especially when other interests are at stake. When a person’s job is to develop new business and reach aggressive sales targets, the person might blur ethical lines, ignore inconvenient facts, or rationalize certain activities. The person might actually think that they are paying “commissions,” “incentives,” or “referral fees.” They might say to themselves: “Well, if everyone else is doing it, it cannot be that bad.” The more that a person engages in this activity, the less they have to convince themselves that it is ok.

Sales Manager A. Sales Manager A worked for BizJet for about six years, starting in or around 2004. He had regional sales responsibility that covered Mexico and Panama. His job was to maintain and increase business with existing customers and to obtain business from new customers. He lived and worked just north of Santa Monica, CA, in a place called Van Nuys. He reported to BizJet headquarters in Tulsa, OK.

In international business, salespeople like this are on the front lines. When their work involves countries known for corruption risk, their jobs can be difficult. On one hand, they feel pressure from headquarters to make sales targets. On the other, it is not uncommon for government customers in foreign countries to make requests for special benefits in return for granting business.

As early as 2006, Sales Manager A made arrangements for payments to officials in Panama and Mexico related to business there. He discussed with a customer-relations employee at headquarters in Tulsa that he needed to give a cell phone and $10,000 to a chief mechanic at the Panamanian Aviation Authority to get the official’s assistance in securing a contract. He received approval for this payment from a senior business development executive at headquarters. In the e-mail, the executive copied a senior finance executive with responsibility for payment approvals of invoices and wire and check requests. A few months later, Sales Manager A told the same business development executive in an e-mail that a Colonel in the Mexican President’s Fleet was expecting a “commission.” Six weeks later, Sales Manager A said that that he needed $2,000 to pay a Captain in the Mexican President’s Fleet.

At this stage of his work with BizJet, did Sales Manager A know that he was doing something wrong? Probably so, but maybe not. Maybe he thought, wrongly, that the payments were legitimate “commissions.” Maybe the officials themselves described them that way? Maybe they said that these were standard types of payments in their countries? After all, Sales Manager A had the explicit approval of senior executives at headquarters to make them.

At some point in or before 2007, Sales Manager A set up a separate personal company and ran it from home. The purported purpose of the company was to provide maintenance, repair, and overhaul (MRO) services for aircrafts. Sales Manager A registered his name as the only officer, director, and employee.

Did Sales Manager A know by now that he was engaging in wrongful activity?

By October 2007, the nature of Sales Manager A’s activity took a dramatic shift. That month, executives at headquarters wired $30,000 to the account of the separate company that he had set up, what the U.S. Department of Justice calls a “shell company.” Sales Manager A then withdrew the money and took it with him, in the form of cash, on board a plane to Mexico. In Mexico, he transferred the cash to the Colonel of the Mexican President’s Fleet. After this, he continued making payments to various other officials throughout 2008 and 2009, using the shell company, and making payments by wire and check. Amounts ballooned to $176,000 and $210,000.

Sales Manager A had now become the official “bag man.” Traveling to Mexico with a bag of $30,000 in cash? This is not an activity that can easily be justified in anyone’s head. Instead, it is something about which Hollywood movies are made. By now, Sales Manager A must have known and accepted the fact that he was at the center of an extensive corruption scheme. Unfortunately, his story is a typical one – he had become a profile of corruption.

The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com [2].

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