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The Anticorruption Blog

Second Circuit Confirms Conscious Avoidance Test

Posted in Foreign Corrupt Practices Act, UK Bribery Act

On Wednesday, the U.S. Court of Appeals for the Second Circuit upheld Frederic Bourke’s bribery conviction.

This decision is the culmination of investigations and court proceedings that began in 2000.  Mr. Bourke, who co-founded handbag maker Dooney & Bourke, was convicted in November 2009 for violations under the FCPA after his business partner Viktor Kozeny allegedly paid millions of dollars in bribes to get the government of Azerbaijan to privatise its state-owned oil company.  Prosecutors said that Bourke knew or “consciously avoided” learning that Kozeny had bribed the Azeri leaders when he invested.  Bourke was sentenced to one year and a day in prison.

In its 27-page Judgment, the Second Circuit ruled that “a rational juror could conclude that Bourke deliberately avoided confirming his suspicions” about the bribes and “this same evidence may also be used to infer that Bourke actually knew about the crimes.”

The Bourke decision reaffirms that a defendant may be convicted of a bribery offence even if it is concluded that he had no actual knowledge of the bribe but it is believed that he did not try hard enough to learn the truth, “conscious avoidance”. The Courts will consider all of the circumstantial evidence surrounding your knowledge of the specific conduct to infer that you knew about the bribe, for example, your knowledge of general corruption in the country and of the briber’s reputation for “shady dealings”.

Whilst under the FCPA it is necessary to prove actual knowledge or “conscious avoidance”, this is not so under the UK Bribery Act section 7 corporate offence of “failing to prevent bribery”.   Under this section a commercial organisation will be strictly liable for an offence if there is evidence to prove that a person associated with the organisation has committed an offence under the Act, whether with or without the knowledge of directors, management or others.  The only defence available is one of proving that the organisation had adequate procedures in place to prevent bribery.

The message is clear that companies and individuals cannot turn a blind eye and expect to escape liability.