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836. Prosecutive Considerations in Bank Bribery Cases

The purpose of 18 U.S.C. § 215 is to deter the payment of bribes or gratuities to officials of financial institutions and thereby protect the integrity of such institutions and their transactions. See S.Rep. No. 98-225, at 375, 376 (1984). The bribery statute recognizes that officers and employees of Federally insured or regulated institutions owe a fiduciary duty of honest services to their employer.

The following should be considered in assessing whether there is a defense to a bribery or gratuity allegation or whether the conduct is at most insignificant and does not warrant prosecution:

  1. The Applicability of a Bank's Own Standard of Conduct

    Various banks on their own initiative have established, and may be expected to establish, certain guidelines or standards of conduct regarding their employees' receipt of benefits such as meals, entertainment, and gifts from bank customers. By adopting such standards a bank implicitly recognizes that a certain amount of entertainment does not amount to a corrupting influence on the bank's transactions. Consequently, a bank officer's compliance with reasonable standards of conduct of his/her own bank would constitute a formidable barrier to successful prosecution if the officer's conduct is ever challenged.

    Senior management, however, cannot avoid the bribery statute by simply adopting for itself loose and uninhibited standards of conduct even when full disclosure is made to the bank's board of directors. The issue is one of "reasonableness." A "reasonable" standard of conduct is one which permits an employee to receive the normal amenities that facilitate the discussion of bank business, such as a business luncheon, but which excludes the receipt of those benefits which serve no demonstrable business purposes, such as a weekend hunting or fishing expedition or the receipt of scarce or expensive tickets to athletic or theatrical events. Clearly, conduct that falls squarely within reasonable standards of behavior presents no corrupting threat and is inappropriate for prosecution.

  2. Social and Family Ties of the Banker

    It is not uncommon for bankers to have close social or family ties with some of those with whom they do business. Where these ties exist, gifts and entertainment may have more to do with social and family ties than with bank business. Accordingly, prosecutors should closely examine the relationship between the bank customer and bank officer. For an analogy regarding Federal employees and their social family ties, see 28 C.F.R. §  45.735-14(c)(1) to (4).

  3. Regulatory Guidelines

    The 1986 amendments provide that the bank supervisory agencies "shall. . .establish. . .guidelines. . .to assist" bank officials to comply with the statute. The bank supervisory agencies have completed work on a set of guidelines for the bank bribery statute. See Comptroller of the Currency guidelines, 52 Fed. Reg. 46046 (Dec. 3, 1987).

    The guidelines indicate that the agencies have encouraged banks to adopt their own codes of conduct which specify certain exceptions to the general prohibition that bank officials may not accept something of value in connection with bank business. The agency guidelines list specific instances where a bank official, without risk of corruption or breach of trust, may accept something of value, such as the business luncheon, from one doing or seeking to do business with the bank. In general, there is no threat of violation of the statute if the acceptance is based on a family or personal relationship existing independent of any business of the institution; if the benefit is available to the general public under the same conditions it is available to the bank official; or if the benefit would be paid for by another party.

    The guidelines developed by the agencies are not a substitute for the legal standards set forth in the statute. Nonetheless, in reaching prosecutive decisions under the bank bribery statute, the Department of Justice will take into account the bank supervisory agency's expertise and judgment in defining those activities or practices that the agency believes do not undermine an official's fiduciary duty to the financial institution.

    Obviously, evidence that a bank official complies with the bank's own code of conduct supports the argument that there has been no breach of trust. Moreover, when a bank official operates on the basis of full disclosure, this too dispels that notion of corrupt intent. But a bank official's full disclosure to management evidences good faith only when such disclosure is made in the context of properly exercised supervision and control. Thus, the prohibitions of the bribery statute cannot be avoided by simply reporting to management the acceptance of various gifts or business opportunities received from bank customers unless management reviews the disclosures and determines that what is accepted is reasonable and does not pose a threat to the bank's integrity.

[cited in JM 9-40.000]

Updated January 21, 2020