___—_—__——--——_—_ under the guise of legitimate payments, such as commis- In the past, “corporate bribery has sions or consulting fees. oo In instances where all the elements of a violation of been concealed by the falsification of . - the anti-bribery provisions are not met—where, for exam- corporate books and records” and the ple, there was no use of interstate commerce—companies ; _ h nonetheless may be liable if the improper payments are inac- accounting provisions “remove[] this , gP U curately recorded. Consistent with the FCPA’s approach avenue of coverup.” to prohibiting payments of any value that are made with a corrupt purpose, there is no materiality threshold under the Senate Report No. 95-114, at 3 (1977) books and records provision. In combination with the inter- ——— nal controls provision, the requirement that issuers main- tain books and records that accurately and fairly reflect the corporation’s transactions “assure[s], among other things, What Is Covered by the Accounting that the assets of the issuer are used for proper corporate Provisions? purpose[s].?*? As with the anti-bribery provisions, DOJ’s and SEC’s enforcement of the books and records provision Books and Records Provision has typically involved misreporting of either large bribe pay- Bribes, both foreign and domestic, are often mischarac- ments or widespread inaccurate recording of smaller pay- terized in companies books and records. Section 13(b)(2)(A) of ments made as part of a systemic pattern of bribery. the Exchange Act (15 US.C. § 78m(b)(2)(A)), commonly called the “books and records” provision, requires issuers EE to “make and keep books, records, and accounts, which, in Bribes Have Been Mischaracterizad Ace reasonable detail, accurately and fairly reflect the transac- ; _ ; > « # Commissions or Royalties tions and dispositions of the assets of the issuer.””!® The “in reasonable detail” qualification was adopted by Congress * Consulting Fees “in light of the concern that such a s