On 27 June 2016, in a judgment which is likely to have a material impact upon future bribery cases involving public officials, the US Supreme Court overturned Virginia governor, Bob McDonnell’s conviction for bribery.

The Court rejected a broad interpretation of what might constitute “official acts” on the part of a public official in exchange for gifts and loans. Such a broad interpretation had formed part of trial court’s  instructions to the jury before they entered into deliberations, and for which the US authorities had argued on appeal.

In particular, the Supreme Court observed that the payment or benefit in question must be connected with: “[…] a decision or action on a ‘question, matter, cause, suit, proceeding or controversy’. That question or matter must involve a formal exercise of governmental power, and must also be something specific and focused that is “pending” or “may by law be brought” before a public official. To qualify as an “official act,” the public official must make a decision or take an action on that question or matter, or agree to do so.” The Court went on to conclude that: “Setting up a meeting, talking to another official, or organising an event—without more—does not fit that definition of “official act”…”

Whilst likely to be interpreted, in future cases, to be restricted to its facts this may deter prosecutions where the prosecutor can only establish that the payments or gifts made resulted in practical assistance of the sort that featured in Mr. McDonnell’s case. In many cases, however, there will be evidence, or at least a strong inference, that the conduct went beyond the mere facilitation of such meetings into actively seeking to influence one of the defined official acts.

Moreover, given the broader provisions within the FCPA, which expressly prohibit the acceptance of gifts in return for the use of the official’s influence to affect any acts or decisions a foreign government or instrumentality, the early indications are that this will not have a material impact upon FCPA enforcement actions. Accordingly, policies and procedures of multinational companies around the use of officials as facilitators and lobbyists are unlikely to change. Whether US domestic companies are encouraged to increase their use of McDonnell-style arrangements to indirectly influence decisions which affect their businesses remains to be seen. For the reasons set out above, some circumspection before taking such steps would be advisable.

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