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[Prelude]

The following post was originally from a facebook discussion, initiated by Mr. Clement Yow Mulalap on October 22, 2012, regarding the legal status of the current situation after Governor’s delivery, and ETG’s official recipience of the written notice concerning ETG’s investment. On November 1, 2012, Mr. Eric Lirow asked a question concerning whether the proposed “Distributing Gaming Fees” in ETG’s brochure would constitute bribery according to the Yap State Laws. Mr. Clement Yow Mulalap replied as follows.We re-post it from the facebook page, Yap’s Development.

Original Link: http://www.facebook.com/groups/404462399564440/permalink/502166176460728/

[Discussion]

Eric Lirow

Yow, Siro, another question….lol. By now you are sick of my questions.


Concerning the ETG brochure: “Distribute Gaming Fees”:

“If ETG is issued a gaming license, ETG upon receiving its license, will rovide a predetermined payment to the people of Yap including outer islands and Yap Government. ETG proposed an initial payment of $200 per year per Yap citizen residing in Yap state and will provide the government with a $600,000 annual gaming tax…..etc”

The legal definition of bribery that I know:

“Bribery in criminal law refers to the improper acceptance by a public official, juror, or someone bound by a duty to act impartially, of any gain or advantage to the beneficiary, including any gain or advantage to a third person by the desire or consent of the beneficiary. A gain or advantage may be a pecuniary benefit in the form of money, property, commercial interests or anything else the primary significance of which is economic gain.”

Is ETG’s offer considered a bribe or not? Yap state government is an official branch bound by duty to act impartially, right? Or is this a grey area?
Much thanks.

Clement Yow Mulalap

Siro.

Thank you to Eric for the questions. No worries. I welcome this discussion. Again, the comments I make are my personal opinions (albeit ones that, I think, are fairly well-grounded, professionally speaking).

The pertinent law regarding what constitutes a bribe in Yap is found in Title 11, Section 502 (hereinafter “Section 502”) of the Yap State Code. According to that Section:

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“Every person who shall voluntarily offer or receive any benefit as consideration to influence an official act to be done or not done, shall be guilty of bribery, and upon conviction thereof shall be imprisoned for a period of not more than three years, and fined three times the value of the benefit offered or received, or both. If the value of the benefit cannot be determined in dollars, the fine shall be not more than $5,000.00.”

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(A cautionary note: I am fairly certain that I have accurately quoted this provision. There is a small chance that this provision may have been updated since the publication of the source that I am quoting this provision from, in which case, I welcome any corrections from members of this group. In the meantime, I will proceed with this discussion with the understanding that the provision above is accurate and current.)

In my opinion, Section 502’s definition of “bribery” can very well cover the sort of payouts that ETG proposes in its brochure to make to Yapese citizens and the Yap State Government.

Now, there are several issues. First, would ETG’s promise of a payout to Yapese citizens who are not Yap State Government officials qualify as a bribe? In my opinion, this is likely so according to Section 502. Section 502 deals with the influencing of an “official act to be done or not done,” but the Section does not specifically restrict the crime of bribery to offers made to government officials who may receive bribes to influence their official acts. Given the way that Section 502 is worded, as long as any person who receives a “benefit as consideration” is in a position “to influence an official act to be done or not done,” then the voluntary offer of such a “benefit” to that person for the purpose of getting that person to influence an official act constitutes a bribe under Section 502. An enterprising lawyer can argue that ETG’s promise of a payout to non-government-official Yapese citizens is intended to get those Yapese citizens to influence the Yap State Government to, among other things, repeal Yap’s anti-gambling laws and allow for ETG to carry out casino operations in Yap. In that scenario, then, ETG’s promise of a payout arguably constitutes a bribe under Section 502.

The second issue is whether ETG’s promise of an “annual gaming tax” to the Yap State Government constitutes a bribe under Section 502 of the Yap State Code. Of course, if a license fee or tax is legitimate and provided-for under relevant state/national laws and regulations, then the payment (or the promised payment) of such a fee/tax should not be considered a bribe. Section 502 accounts for this sort of possibility by limiting bribes to offers that are made “voluntarily.” This means that if ETG is required by law to furnish some sort of tax or fee, then ETG’s furnishing of that tax or fee is not “voluntar[y],” and so ETG’s payment (or promised payment) of that tax or fee should not be deemed a bribe.

However, in this particular case, I believe that Yap State Law does not allow for any sort of “gaming tax.” Indeed, as far as I know, there are a limited number of taxes and fees that are paid to the State of Yap—including excise tax, hotel occupancy tax, motor vehicle tax, and so forth—and none of those items include a “gaming tax.” There are also no provisions under the FSM Code for a “gaming tax”—the FSM primarily collects taxes/fees on wages and salaries, on gross revenues, and on fishing licenses, and although one may argue that a “gaming tax” is similar to a “gross revenue tax,” they are not, in my opinion, the same tax. (For one thing, a gross revenue tax is broader than a limited “gaming tax.” For another, tax codes are notoriously very keen on specificity in language, and if a tax code has no specific mention of a special provision for a “gaming tax,” then the common practice in tax law is to not recognize such a provision.) Even if the FSM Tax Code contains a provision for a “gaming tax,” that still should not matter, because ETG’s brochure proposes that a “gaming tax” shall be paid to the Yap State Government, not the FSM National Government.

In light of the foregoing discussion, it is my opinion that ETG’s promise of an “annual gaming tax” to the Yap State Government is, in essence, a “voluntar[y] offer” according to Section 502 of the Yap State Code. If we are to assume that ETG makes such an offer “as consideration to influence an official act to be done,” e.g., to get the Yap State Government to legally support ETG’s proposed Project in Yap, then that may constitute bribery under Section 502.

I hope that this answers your questions, Eric.

Kam’magar, ma siro.

Original Link: http://www.facebook.com/groups/404462399564440/permalink/502166176460728/

References: Yap State Code, Title 11, Chap 5, Section 502

Bill No.8-82: Prohibition on Gambling and the Penalties

*Note: According to Yap State News (2012/10/10), Council of Tamol did not disapprove Bill No.8-82.

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One thought on “Legal Analysis: On Bribery

  1. Pingback: A Reader’s Comments on WSJ Report, | For Yap State Citizens

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