Fraud and corruption reporting
The Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) operates the Resident Legal Advisor (RLA) program that is part of the Criminal Division of the United States Department of Justice in Washington. The information contained herein includes a program description and specific comments about corruption and fraud.
Pursuant to the RLA program an experienced resident federal prosecutor provides advice to the government of Romania and to the Embassy on reformation of Romanian criminal laws and procedures. Past and current RLA projects include the topics of money laundering, drugs, corruption, undercover operations, witness protection, forfeiture, speedy trial, guilty pleas, plea bargaining, cybercrimes, bank fraud, and ethics. In addition, the RLA serves as the chair of the mission-wide effort to battle corruption. The RLA is not available to serve as a lawyer for American or Romanian citizens for specific legal problems.
Corruption is a serious problem in Romania. The RLA offers the following general observations, but persons with specific concerns are strongly encouraged to consult with their own legal counsel.
American citizens seeking or doing business in Romania should be aware of the United States’ Foreign Corrupt Practices Act. (FCPA.) This law felonizes corrupt payments intended to induce the recipient to misuse his official position to wrongfully direct business to the payer or to those for whom the payer is acting. It includes acts by corporations, firms, officers, directors, corporate employees, agents, shareholders acting on behalf of covered firms and corporations, as well as acts by all foreign and domestic intermediaries on behalf of U.S. corporations. The penalties for FCPA violations include imprisonment for up to 5 years and various fines up to $2,000,000. The law also provides for alternate criminal fines up to twice the amount of gross gain to the defendant or gross loss to another, as well as various civil sanctions. The FCPA does not cover “grease” payments in for performance or expediting of routine governmental action.
Commercial bribery can also involve other illegal activity to cover up the source of the funds used to pay the bribes and the trace of those funds. FCPA violations can be accompanied by mail fraud, wire fraud, stock fraud and tax fraud. Beyond these laws are a host of other felony laws that punish individuals who knowingly assist or protect those who engage in illegal corrupt practices. Under U.S. law those who conspire with and those who knowingly assist (aid and abet) lawbreakers are criminally liable. The criminal law also reaches those who are accessories, even after the crime had been completed, those who intentionally conceal the felony crimes of others and those who launder proceeds of certain types of crimes.
On the Romanian side, receiving a bribe, giving a bribe, accepting undue benefits and influence trafficking are specifically prohibited by Romanian penal law. These laws are to varying degrees enforced. During the years 1994-1999 the Romanian government reports that 2,681 individuals were convicted for various acts of corruption. Of this number, the largest amount of convictions were obtained for accepting a bribe, 1359, just over 50%. In 2000 Romania amended its corruption laws by expanding the scope of the pre-existing laws, and increasing some penalties. These amendments are now in force. Under these amendments, private business managers are now exposed to the same penalties as public employees for accepting a bribe or influence trafficking.
Bribery is destructive and bribery is illegal. What are some options when faced with the problem? In this context it may be useful to discuss the beaten spouse syndrome. One of the dynamics of the beaten spouse syndrome is that the behavior in all likelihood will continue unless the victim is willing to complain to authorities. In the absence of a complaint, the victim should expect the beatings to continue. The same is true in the corruption arena – the victim must stand up against the practice or he will surely be hit up again for more money. While the “just say no” campaign was launched against drugs, it has application in the corruption arena.
Will there be adverse consequences? Perhaps, but there are ways of blunting those consequences. In some larger cities in Romania there are foreign business associations. The members in these associations all operate in the same environment. Such associations provide a natural forum to explore the corruption landscape and to select a joint course of action to clean up specific practices. Persons involved in a business should consider joining these associations and raising the possibility of complaining as a group about specific corrupt practices. Such action groups can include citizens of other countries who have also encountered similar problems.
To whom does one complain? There are several options. The agency involved may have a newly created “inspector general” section whose job it is to receive complaints. The Otopeni Airport at Bucharest now has posters that resulted from the reform efforts of the United States Custom’s Service that invite persons who have complaints about acts of VAMA (Romanian Customs Service) employees to send them to VAMA.
Another option is to report corrupt acts to the Parchetul (the Prosecutor General’s Office). Under Romanian law prosecutors (magistrates) are the lead investigators in corruption cases. The newly passed anti-corruption law calls for the creation of a special section within that office to deal with corruption investigations. This approach is based on the experience and advice of countries with more advanced economies, including the United States, that call for specialized units to deal with corruption. The Romania law mirrors this approach.
Yet another approach is to interest the media in the situation. This type of pressure is broader based than the filing of complaint. Romanian newspapers are not shy about reporting the wrongs of government employees. Such articles appear on a continual basis and serve as a pressure point for a cleaner, better government. Sunlight disinfects!
Options also exist that can involve the United States Department of Justice. Under the FCPA referred to earlier bribes paid outside of the United States to benefit a business operating in the United States are covered by the FCPA. If a covered company or domestic concern is directly or through intermediaries using bribery to obtain or sustain a business in Romania, it should be reported either to the FBI at post or to the Fraud Section of the Criminal Division of the United States Department of Justice in Washington. The contact person at the Department of Justice in Washington is Peter Clark, 202-514-0248.
American citizens are encouraged to pass on their experiences to the Embassy. This helps us stay abreast of developments in this area. They may contact either the RLA or Consular Services. Department of State procedures require that the Embassy notify the U.S. Department of Justice about matters involving FCPA violations.
It must be noted that the United States is no longer alone in its fight against foreign corruption. The Organization for Economic Cooperation and Development (OECD,) which consists of a number of the most economically developed countries in the world, has developed a treaty that requires signatories to outlaw foreign bribery in business transactions. Under this treaty the signatories must pass laws that criminalize such activity. The signatories have also agreed to monitor each other in the enforcement of these new provisions of domestic law.
Economic crime is a growing problem in Romania. Due to the high level of computer skills in this country cybercrimes [including internet fraud, credit card fraud, auction site fraud, and hacking/extortion schemes] are occurring on an increasing basis. American companies and citizens are very often the victims of this type of crime. If you have been victimized by this type of crime you may contact the US Secret Service Office at the US Embassy in Romania, the RLA at post or the FBI at post [for extortion schemes.]. It is important that you save any emails or documents that were generated as a result of the fraud. You should also notify the relevant credit card companies forthwith, and make immediate efforts to retrieve your goods or funds if they have not yet been delivered.
While in a foreign country, a U.S. citizen is subject to that country’s laws and regulations, which sometimes differ significantly from those in the United States and may not afford the protections available to the individual under U.S. law. Penalties for breaking the law can be more severe than in the United States for similar offenses. Persons violating Romanian laws, even unknowingly, may be expelled, arrested or imprisoned. Penalties for possession, use, or trafficking in illegal drugs in Romania are strict and convicted offenders can expect jail sentences and heavy fines.
Persons who participate in or photograph demonstrations risk arrest.
If you are arrested, you should ask the authorities to notify a US consul. Consuls cannot get you out of jail (when you are in a foreign country you are subject to its laws.) However, they can work to protect your legitimate interests and ensure you are not discriminated against. They can provide a list of local attorneys, visit you, inform you generally about local laws, and contact your family and friends. Consular officers can transfer money, food, and clothing to the prison authorities from your family or friends. They can try to get relief if you are held under inhumane or unhealthful conditions.