FCPA and Anti-Corruption

On August 14, 2014, Joel Esquenazi and Carlos Rodriguez filed a Petition for a writ of certiorari in the U.S. Supreme Court seeking clarification of a key term in the Foreign Corrupt Practices Act.  Among other arguments, Esquenazi and Rodriguez (the “Petitioners”) state that the FCPA “leaves open the pivotal question of who qualifies as a ‘foreign official’” because the law does not define what it means to be an “instrumentality” of a foreign government.  The Department of Justice has waived its right to respond to the Petition, possibly signaling that the government believes the issue does not warrant the Court’s review.  Last week, the Washington Legal Foundation and the Independence Institute, a pro-business policy group and think-tank respectively, filed a friend-of-the-court brief in support of the Petition, arguing that the case is of exceptional importance to the business community.
Continue Reading Who’s a “Foreign Official”? Supreme Court Could Clarify Key FCPA Term

A red sky at morning is the traditional harbinger of ill weather. From our vantage point in Brussels, we’ve scanned the horizon for signs of the future of anti-bribery enforcement activity in Europe. We’ve identified four factors that are starting small, but may build into heavy seas.

In particular, there are signs that companies that sell to governments in Europe may be well advised to shore up compliance procedures so they can remain dry if a wave of anti-corruption sentiment breaks over the public procurement sector.Continue Reading Shelter from the Coming Storm: Anti-Corruption Compliance in European Public Procurement

April 24 marked another day of progress in holding kleptocrats accountable for their corruption.

On that day, the U.S. Department of Justice (“DOJ”) filed a civil forfeiture complaint to seize more than $700,000 in allegedly illicit funds from former South Korean President Chun Doo-hwan. The corrupt proceeds came from the sale of a Newport Beach house, purchased in 2005 by Chun’s son, Chun Jae Yong, who used funds that the former President had wrongfully obtained.  According to the DOJ, the United States is collaborating in this matter with the Republic of Korea’s Supreme Prosecutor’s Office, Korea’s Ministry of Justice, and the Seoul Central District Prosecutor’s Office.Continue Reading Beach Houses and Bribes: DOJ Seeks Over $700,000 From Former South Korean President

On March 5, 2014, the U.S. Department of Justice announced that it had frozen over $458 million of ill-gotten assets that former Nigerian dictator Sani Abacha and his co-conspirators had stashed in bank accounts across the globe.  The DOJ is seeking to recover almost $100 million more.  The largest-ever kleptocracy forfeiture action brought in the United States, this case is a victory for the Kleptocracy Asset Recovery Initiative, a program launched by the DOJ Criminal Division’s Asset Forfeiture and Money Laundering Section in 2010.  We wrote about the Initiative’s first-ever action here, brought in 2012, when the DOJ executed a forfeiture order of just over $400,000 against a former Nigerian governor.  And while the DOJ has seen great success in its actions against bribe-payers through the enforcement of the Foreign Corrupt Practices Act, initiatives to bring bribe-takers to justice have faced bumps in the road, probably because of the politically fraught and complex nature of such cases.
Continue Reading It Doesn’t Pay to Steal: In Largest Ever Kleptocracy Forfeiture Action, DOJ Seizes $458 Million

1.      Background

The early 1990’s in Brazil were marked by a combination of extremely high inflation, poor quality services and goods (which were mostly manufactured locally), onerous bureaucracy, and persistent corruption.  An elected president, who followed a military government which had lasted for decades, was seen to be looting most Brazilians’ savings.  He was in turn removed from office and then impeached amid a corruption scandal.  No wonder distrust in Brazilian public officials has been so high.Continue Reading The Brazilian Anti-Corruption Act of 2013 (Act # 12846)

Vacation is great, but it can involve a great deal of planning.  And, paradoxically, leisure travel can involve more planning than traveling for business.  That travel-related work stands out as a centerpiece of the October 22, 2013 Diebold, Inc. (Diebold) Foreign Corrupt Practices Act (“FCPA”) settlement with the U.S. Securities and Exchange Commission (SEC) and Deferred Prosecution Agreement with the U.S. Department of Justice (DOJ).  The $48 million in penalties, disgorgement, and interest, and the 18-month compliance monitor imposed on Diebold under the settlement, serve to demonstrate the strong emphasis that the DOJ and SEC place on appropriate compliance planning, and the significant steps that will be taken against companies seen to be lacking an internal compliance compass.
Continue Reading Tryin’ to Make a Dollar out of Fifteen Cents: The Diebold FCPA Settlement Explains What Officials Did on Their Vacation

The U.S. District Court for the Southern District of New York has held that the whistleblower protection provisions of the Dodd-Frank Act do not apply outside the United States, even where the employee alleged he was terminated for raising compliance concerns under U.S. international law. Specifically, the court found that Dodd-Frank did not protect an employee of Siemens in China who alleged he was terminated in retaliation for raising compliance concerns under the U.S. Foreign Corrupt Practices Act (FCPA). The decision will strike many observers as remarkable, since the extraterritorial provisions of the FCPA itself have been construed so broadly. The opinion in the case, Liu v. Siemens AG, Civ. No. 13 Civ. 317 (WHP) Slip Op. (S.D.N.Y. Oct. 21, 2013), may be viewed online here.
Continue Reading Dodd-Frank Whistleblower Protection: For America Only

By: Thad McBride, Mark Jensen, and Cheryl Palmeri

In early August, the New York Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating JPMorgan Chase related to alleged violations of the Foreign Corrupt Practices Act (FCPA) in China.  According to the article, the press had not previously reported on the investigation, and the Times knowledge of it was based on a “confidential United States government document.”  The article generated a number of similar news reports.
Continue Reading The FCPA in the News: Big Scoops, Real Fallout

By: James Zimmerman and Cheryl Palmeri

The recent enforcement of Chinese anti-bribery laws against British pharmaceutical company GlaxoSmithKline (GSK) highlights the compliance challenges faced by foreign companies operating in China.

GSK’s Chinese subsidiary is accused of funneling almost $500 million in bribes to doctors and hospitals in China exchange for purchasing or prescribing the company’s products.  The alleged bribes included sexual favors, cash, and invitations to join high-end academic conferences.  GSK employees also allegedly accepted kickbacks and improper commission fees, issued fake invoices, and wrote special bills related to the value-added tax.



Continue Reading Lessons Learned from the GlaxoSmithKline Bribery Investigation

By: Scott Maberry and Mark Jensen

One FCPA compliance topic we are often asked about by clients is how government investigations start. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have developed a number of mechanisms largely within their control (including whistleblowers and cross-industry investigations) to learn about bribery allegations.  There are also mechanisms outside of government control, such as investigative journalism, that can identify bribery allegations and effectively force the government’s hand into investigating them.  Recent events surrounding FCPA allegations against International Business Machines Corporation (“IBM”) suggest a new actor that can force the broadening or deepening of existing FCPA investigations: the U.S. courts.
Continue Reading A Rising Voice on FCPA Compliance: The Court