The hiring of government officials may be appropriate under some circumstances. For example, many physicians in public healthcare systems outside the US would be considered by the DOJ and SEC to be foreign officials under the FCPA. The SFO may also consider such individuals to be public officials under the Bribery Act. A pharmaceutical or medical device company may want to engage such doctors to conduct legitimate research as to the efficacy of its products.
Given that hiring such individuals would involve the provision of money directly to a government official, companies should establish clear policies and procedures governing such engagements, including:
- applying the same, or no less strict, hiring policies and procedures as would apply to a non-government official applying for such a position;
- documenting the qualifications of the government official for the position, the reasons for the compensation that will be paid to the government official, and the hiring process used to identify and select the candidate;
- ensuring that the government official’s qualifications and compensation are reasonable and appropriate for the position and consistent with similarly situated individuals hired by the company; and
- following the same performance review procedures as would be followed for a comparable non-government official after the government official is engaged.
Companies must absolutely prohibit the hiring of government officials for jobs that do not require the individual’s presence at the work site, positions that require little to no work, and positions created for the purpose of compensating the government official.
Companies must also be cautious with respect to hiring the family and close friends of government officials. In recent years, the DOJ and SEC have investigated and settled several cases involving companies hiring such individuals. US enforcement authorities have viewed offers of employment to these individuals as things of value provided to the government officials. Although UK and French authorities have not yet brought an enforcement action based on a company’s hiring practices, the risk exists that UK and French authorities will follow a position similar to that of the US. In order to avoid enforcement actions based on hiring practices involving the relatives and friends of government officials, companies should follow the same policies and procedures as those in place for hiring a government official.