I was at a Bribery Act seminar the other day hosted by a foreign Chamber of Commerce at which a member of the hospitality industry asked the lawyer panellists (including a senior member of the Serious Fraud Office) how companies like hers, tasked with selling very expensive corporate hospitality packages at events such as the London 2012 Olympics, should deal with the new Bribery Act (something that my colleague, Patrick Gilfillan, commented on in an earlier post).
Regrettably, the answer given by the panellist was very woolly and was not enlightening, to me at least. Reference was made to so-called “gold standard” British companies which are said to have robust and transparent expenses and entertainment policies, ones that the rest of us should apparently aspire to. Sadly, these gold standard companies were not actually identified by the speaker, much less were their so-called gold standard policies handed out to the audience, which might have been really helpful.
The Evening Standard newspaper reported on 7 March 2011 that seats for the opening and closing ceremonies are selling for £4,500 each and that its only possible to buy them in blocks of ten. Further, companies buying seats for the opening and closing ceremonies are also obliged to buy seats for the sporting events themselves, so that the total financial commitment is £270,000. By anyone’s standards, this is a huge sum to spend on client entertainment, whether as a whole or when broken down on a per person basis.
Whilst we understand that the prosecutors would be looking at whether the expenditure was reasonable and proportionate in the context of the individuals being entertained, and whether it might influence their decision making, at this sort of price, you would have to be worth £100s of millions not to feel somewhat indebted to the donor for having been offered very expensive and hard to obtain seats at the historic opening and closing ceremonies of the 2012 London Olympics. I think most jurors would decide that this was lavish entertainment which was intended to influence your decision-making.
So we continue to await the much postponed government guidance. It is hoped by many to spell out what is right and what is not in terms of entertainment expenditure levels. Many of us doubt that it is going to give a let-out clause for the London Olympics! Has the government shot itself in the foot?
In the meantime, the lady selling highly expensive seats at the Olympics to corporates has to try to do her best to navigate the woolly advice being handed out by senior government lawyers and hope that companies are willing, nevertheless, to take the risk of buying and offering as gifts these very expensive and possibly criminally priced hospitality packages.