It is the rare businessperson or lobbyist who takes a politician or bureaucrat they barely know to lunch just for the pleasure of their company. Lunch-buyers may enjoy the food (particularly if the money comes out a corporate pocket) and not all politicians and bureaucrats are self-centered bores. But face it: the main reason bureaucrats and politicians world-wide are wined and dined by people they hardly know is because they are in positions of power and the meal-buyers want to influence them — perhaps to persuade them to purchase the lunch-buyer’s product for their ministries, maybe to change their minds about pending legislation. Yet as obvious as the reason for picking up a lunch the tab is, in the Republic of Korea, and many American jurisdictions as well, on its face the law provides that if lunch-buyers admit why they paid for lunch, they and their luncheon companion go to jail.
That despite these laws Seoul’s upscale restaurants and their counterparts in many American state capitols continue to do a brisk lunchtime business suggests many lunch-buying businesspersons and lobbyists and their government guests regularly deny the obvious. It would be one thing if lawmakers had intended to turn this group into liars and hypocrites, but they did not. It is instead an unintended consequence of laws actually meant to permit public servants to take lunch with those having business with them.
The problem arises in both countries from their courts’ efforts to distinguish between innocent luncheons for public servants and unlawful bribes. The line is not an easy one to draw, for it requires divining what the giver had in mind when he or she picked up the check. As Professor Albert Alschuler described in a post on this blog, in several American jurisdictions courts instruct a jury that a defendant can be found guilty of bribery if he or she bought an official lunch with the “intent to influence” the official. In an August 11 post on the FCPA Blog, Soo-Mi Rhee, Keith Korenchuk, and Samuel Witten explain that under South Korean law a defendant who buys an official lunch is guilty of bribery if the lunch was bought “in connection with” the official’s duties.
Neither the “intent to influence” nor the “in connection with” test is realistic for both pretend that citizens buy bureaucrats and politicians for reasons besides wanting to influence them. Thus strict application of either produces the same result: turning virtually every free lunch into an illegal bribe.
This may be what those who believe public servants will trade their soul for a free lunch want, but American and South Korean courts have realized that it is not what policymakers in either country want, and both have found ways to draw back from strict application of their respective tests. In the United States, as Professor Alschuler explains, the Supreme Court has narrowed the reach of the “intent to influence” test in federal law; for a lunch-buyer to be guilty of bribery, the prosecution must show that he or she intend that the recipient provide something, a “quo” in return for the “quid” of a lunch in the Court’s terminology, for the lunch. So a lobbyist who wants to persuade a parliamentarian to support a piece of legislation or a businessman who wants to make a sales pitch to a procurement officer can take them to lunch so long as the lobbyist does not intend that in return the parliamentarian support the bill or the procurement officer agree to buy the product.
Although application of the “quid pro quo” test can make for evidentiary problems, it nonetheless offers a reasonably bright line for determining when picking up a lunch tab is legal and when it is not. Perhaps because outright bribery is a more salient problem in South Korea, its courts have not been willing to cabin their “in connection with” test. Instead, as Rhee, Korenchuk, and Witten explain, in deciding whether a gift was given “in connection with” a public official’s duties, the courts consider a long list of factors including the recipient’s duties, the reason for the gift, whether the giver and recipient knew one another before, the size of the gift, whether it is only one of many, and whether the gift gives the appearance of affecting the official’s impartiality. These factors give South Korean courts great leeway to decide whether one accepting a free lunch has taken a bribe, as a 1984 case where a Labor Ministry official accepted a dinner worth $61 shows. In ruling the dinner was in fact a bribe, the Court pointed out that the official had received two other “gifts” from the same source, one before the meal and one after and that the giver had specifically asked for a “favor” related to the official’s duties.
There would seem to be easier ways to distinguish a gift from a bribe. The simplest would appear to be to cap on the amount of a gift an official can receive from any one source, either at one time or throughout the year. Or lawmakers can simply ban gifts from those who have an interest in matters for which the official is responsible. But those who have struggled to develop a sensible gift policy know neither of these is foolproof either. Should gifts from close friends and family be limited? That would represent a significant infringement on an official’s personal life. On the other hand, what if the friend or family member is a lobbyist or does business with the government? Likewise, if gifts from those with an interest in the official’s duties are banned, who could give anything to a parliamentarian?
Whatever the solution to these issues, it often comes with a requirement the official publicly reveal each gift received, the donor, and the amount. While again this seems reasonable, it too is not without its drawbacks. Must officials tell the world what his or her spouse or children gave them at the holidays?
Policymakers in different countries will answer these questions differently. In the end, perhaps the only solution to the gift/bribe distinction is the one courts in South Korean and the United States have both come upon – to slowly muddle through until a rule or multifactor standard is found that fits the country’s circumstances.