Business 8th Edition by Marianne Jennings

Exercise 19

Between January 1983 and June 1987, Richard H. Liebo was vice president in charge of the Aerospace Division of NAPCO International, Inc., of Hopkins, Minnesota. NAPCO's primary business consisted of selling military equipment and supplies throughout the world.
In early 1983, the Niger government contracted with a West German company, Dornier Reparaturwerft, to service two Lockheed C-130 cargo planes. After the Niger Ministry of Defense ran into financial troubles, Dornier sought an American parts supplier in order to qualify the Ministry of Defense for financing through the U.S. Foreign Military Sales program. The Foreign Military Sales program is supervised by the Defense Security Assistance Agency of the U.S. Department of Defense. Under the program, loans are provided to foreign governments for the purchase of military equipment and supplies from U.S. contractors.
In June 1983, representatives from Dornier met with officials of NAPCO and agreed that NAPCO would become the prime contractor on the C-130 maintenance contracts. Under this arrangement, NAPCO would supply parts to Niger and Dornier, and Dornier would perform the required maintenance at its facilities in Munich.
Once NAPCO and Dornier agreed to these terms, Mr. Liebo and Axel Kurth, a Dornier sales representative, flew to Niger to get the president of Niger's approval of the contract. In Niger, they met with Captain Ali Tiemogo, chief of maintenance for the Niger Air Force. Captain Tiemogo testified that during the trip, Mr. Liebo and Mr. Kurth told him that they would make "some gestures" to him if he helped get the contract approved. When asked whether this promise played a role in deciding to recommend approval of the contract, Captain Tiemogo stated, "I can't say 'no,' I cannot say 'yes,' at that time," but "it encouraged me." Following Captain Tiemogo's recommendation that the contract be approved, the president of Niger signed the contract.
Tahirou Barke, Captain Tiemogo's cousin and close friend, was the first consular for the Niger Embassy in Washington, D.C. Mr. Barke testified that he met Mr. Liebo in Washington sometime in 1983 or 1984. Mr. Barke stated that Mr. Liebo told him he wanted to make a "gesture" to Captain Tiemogo and asked Mr. Barke to set up a bank account in the United States. With Mr. Barke's assistance, Mr. Liebo opened a bank account in Minnesota in the name of "E. Dave," a variation of the name of Mr. Barke's then-girlfriend, Shirley Elaine Dave. NAPCO deposited about $30,000 in the account, and Mr. Barke used the money to pay bills and purchase personal items and also gave a portion of the money to Captain Tiemogo.
In August 1985, Mr. Barke returned to Niger to be married. After the wedding, he and his wife honeymooned in Paris, Stockholm, and London. Before leaving for Niger, he informed Mr. Liebo of his honeymoon plans, and Mr. Liebo offered to buy, as a gift, Mr. Barke's airline tickets for both Mr. Barke's return to Niger and his honeymoon trip. Mr. Liebo made the flight arrangements and paid for the tickets, which cost $2,028, by charging them to NAPCO's Diners Club account. Mr. Barke considered the tickets a personal "gift" from Mr. Liebo.
Over a two-and-a-half-year period beginning in May 1984, NAPCO made payments totaling $130,000 to three "commission agents." The practice of using agents and paying them commissions on international contracts was acknowledged as a proper, legal, and accepted business practice in third-world countries. NAPCO issued commission checks to three "agents" identified as Amadou Mailele, Captain Tiemogo's brother-in-law; Fatouma Boube, Captain Tiemogo's sister-in-law; and Miss E. Dave, Mr. Barke's girlfriend. At Captain Tiemogo's request, both Mr. Mailele and Ms. Boube set up bank accounts in Paris. Neither Mr. Mailele, Ms. Boube, nor Miss Dave, however, received the commission checks or acted as NAPCO's agent. These individuals were merely intermediaries through whom NAPCO made payments to Captain Tiemogo and Mr. Barke. NAPCO's corporate president, Henri Jacob, or another superior of Mr. Liebo's, approved these "commission payments." No one approved the payment for the honeymoon trip. Are there any violations of the FCPA? [ U.S. v Liebo, 923 F.2d 1308 (8th Cir. 1991)]