Vessel operators and foreign corrupt practices

It can be easy to view corruption as just part of the cost of doing business. There is even a view that corruption is business friendly since it sometimes greases the wheels of obstructive bureaucracy.

In any event, a workboat operator who wants to operate in Third World countries should be aware of the endemic, pervasive, and tacitly accepted practice of demanding bribes in these countries. This should come as no shock to those in the workboat industry with close ties to Louisiana, a state where three former secretaries of state, a former governor, the former mayor of its biggest city, New Orleans, and a former U.S. congressman all have been convicted of taking bribes. Still, some advice to international operators may still be in order.

First, U.S. citizens and corporations must conform to the Foreign Corrupt Practices Act of 1977 (FCPA). I’m not going to engage in a dissertation on how to circumvent FCPA, which is so loose to begin with that very few successful prosecutions have ever been brought under it, but the easiest solution is to avoid paying bribes. For companies that operate vessels in the offshore oilfields of countries such as Colombia, Venezuela, Trinidad and Nigeria, this is a challenge. However, it is not insurmountable. The FCPA was designed to counter the Ugly American stereotype without interfering in any real way with U.S. freebooting, just as the Better Business Bureau actually exists to protect fee paying members from customers, not the other way around.

Almost any transaction can be structured so that it is either legal or illegal. This is not to say that an illegal thing can be done legally, but a thing is either legal or illegal, and its structure is integral to its thingness. For example, let’s say an operator is approached by a Nigerian port director demanding a bribe to allow the operator’s vessels into his port. Well, the FCPA allows payments to officials for “doing their jobs” and only officials are covered (payments to private individuals, even those with “close ties” to government officials, are allowed). Thus, you do have some options.

For the faint of heart, it is encouraging to remember that the only counts Louisiana Rep. William “Dollar Bill” Jefferson was not convicted of in his corruption trial were those that accused him of violating the FCPA. How he could have paid so many bribes to so many foreign (including Nigerian) officials without violating the FCPA is something lawyers who are cleverer than I will have to explain. But the situation is not going to change any time soon. I’ve been living and working in the aforementioned countries for 45 years and I’ve seen no change yet. Traffic policemen in those countries are expected to pad their token incomes with petty extortion, and are even expected to share their bribes with their superiors. The same is true, at a higher level, of judges in these countries.

Which reminds me of a maritime law joke (I only know two): A Venezuelan judge was paid $100,000 for the corrupt seizure of a U.S.-flagged ship. The shipowner paid him $150,000 to let it go. Facing a thorny moral dilemma, the judge did the only ethical thing: He returned $50,000 to the shipowner and ruled on the merits. 

About the author

Capt. Max Hardberger

Max Hardberger is a maritime attorney, flight instructor, writer, and maritime repo man. He has been a correspondent for WorkBoat since 1995. His memoir, Seized: A Sea Captain’s Adventures Battling Scoundrels and Pirates While Recovering Stolen Ships in the World’s Most Troubled Waters, was published by Broadway Books in 2010. He’s appeared on FOX, The Learning Channel, National Public Radio and the BBC, and has been the subject of articles in Fairplay Magazine, the Los Angeles Times, Men’s Journal, Esquire (UK), and the London Sunday Guardian.

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