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Corporate executives and public officials are entrusted to make decisions and allocate resources on behalf of the individuals whose interests they represent. When an individual with entrusted power accepts anything of value in exchange for influencing a decision-making process, enabling fraud, or violating their lawful duty, we observe the corrupt act known as bribery.
What is Bribery
Bribery is a criminal and corrupt practice where an entity offers something of value to a corporate or public official in exchange for their cooperation in influencing a decision-making process, committing or allowing fraud against the official’s organization, or otherwise violating their official duties.
In the United States, bribing public officials is outlawed by the bribery act (18 U.S.C. § 201). There is no explicit prohibition or regulation against bribery in the private sector, but employees who engage in bribery may be prosecuted successfully under honest services fraud, a crime defined in the federal mail and wire fraud statute(18 U.S.C. § 1346). This statute covers fraudulent schemes that deprive another of honest services through bribes or kickbacks from a cooperating third party.
What is an Example of Bribery?
A recent high-profile case of bribery was the 2019 college admissions bribery scandal. It was found that 33 parents of college applicants paid $25 million to one man, William Rick Singer who:
- Falsely and fraudulently inflated the test scores of the applicants
- Bribed college officials to cooperate by recommending these applicants for athletic scholarships, including some who had never before participated in the sports for which they were recruited.
Singer was ultimately prosecuted under the honest services mail fraud act and charged with money laundering. More than 50 other participants were also charged.
What is the Difference Between Bribery and Corruption?
Bribery is a type of corruption.
Corruption includes any unlawful, unethical, or improper action or breach of trust undertaken for the purpose of personal, commercial, or financial gain. Corruption includes activities like:
- Antitrust Violations
- Influence Peddling
How Does the Bribery Act Work?
In the United States, 18 U.S.C. § 201 makes it illegal to bribe public officials.
Under the act, it is illegal for an individual to give or offer, or promise anything of value to a public official with intent to:
- Influence any official act.
- Influence the official to commit, aid in committing, collude in, or allow fraud against the United States.
- Contravene their lawful duty.
The bribery act also makes it illegal for public officials to demand, seek, receive, accept, or agree to accept anything of value in exchange for influencing an official act, participating in a fraud scheme against the government, or violating their lawful duties of office.
Penalties under the bribery act can include fines and a prison term of up to two years.
Active vs Passive Bribery – What’s the Difference?
Every act of bribery involves two parties: the person who pays the bribe and the person who receives it. These two parties correspond to the two kinds of bribery: active and passive.
An individual who offers, pays, agrees to pay, or attempts to pay a bribe is committing active bribery. An individual who requests, receives, agrees to receive, or attempts to receive a bribe is committing passive bribery.
These designations identify the role of each party in the exchange, either as the payer or the receiver. However, these roles do not necessarily indicate which party initiated the corrupt activity. An official who accepts a bribe is committing passive bribery regardless of whether he requested the bribe himself or it was offered by a corrupt contractor.