Last year, one of the most interesting non-Foreign Corrupt Practices Act (FCPA) enforcement actions was announced by the Securities and Exchange Commission (SEC). It involved a clear quid pro quo benefit paid out by United Airlines to David Samson, the former Chairman of the Board of Directors of the Port Authority of New York and New Jersey, the public government entity which has authority over, among other things, United Airlines operations at the company’s huge east coast hub at Newark, NJ. See more +

Last year, one of the most interesting non-Foreign Corrupt Practices Act (FCPA) enforcement actions was announced by the Securities and Exchange Commission (SEC). It involved a clear quid pro quo benefit paid out by United Airlines to David Samson, the former Chairman of the Board of Directors of the Port Authority of New York and New Jersey, the public government entity which has authority over, among other things, United Airlines operations at the company’s huge east coast hub at Newark, NJ.

The reason that it is so interesting from an enforcement prospective is that it is not foreign corruption but domestic corruption, therefore not subject to the FCPA. However, the actions of United’s former Chief Executive Officer (CEO), Jeff Smisek, in personally approving the benefit granted to favor Samson violated the company’s internal controls around gifts to government officials. That sounds suspiciously like a books and records violation of the FCPA. The $2.4 million civil penalty levied on United was in addition to the Non-Prosecution Agreement (NPA) settlement with the Department of Justice (DOJ), which resulted in a penalty of $2.25 million. Chairman Samson has also pled guilty in July for putting pressure on United to reinstitute a flight service which was near his weekend residence.

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