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$16 Million Settlement Comes as Report Predicts Uptick in FCPA Actions | Law.com

July 20, 2011 By Leave a Comment

After years of explosive growth in the number of Foreign Corrupt Practices Act enforcement actions, the pace looks to have fallen off in the first half of 2011. But don’t expect the slowdown to last.

The Department of Justice on Wednesday announced a non-prosecution agreement with Florida-based Armor Holdings Inc. in which the company admitted to funneling bribes to a United Nations official to secure contracts to supply body armor to U.N. peacekeepers. As part of the agreement, Armor will pay more than $10 million in fines to the DOJ and $5.7 million in disgorgement and penalties to the SEC. A former Armor Holdings employee, Richard Bistrong, pleaded guilty in 2009 to related charges.

The bribery scheme predates Armor Holding’s 2007 sale to London-based BAE Systems Plc. BAE Systems faced its own bribery scandal, paying almost $450 million in fines and penalties to British and U.S. regulators in 2010 to resolve foreign bribery allegations spanning the Atlantic.

Counsel for Armor Holdings, Wilmer Cutler Pickering Hale and Dorr partner Roger Witten, declined to comment. A spokesperson for BAE Systems did not return a call seeking comment.

Also on Wednesday, the DOJ indicted a different Florida company, Cinergy Telecommunications, and three of its employees, in an ongoing bribery case against Miami-based telecom companies charged with making $1 million in illegal payments to Haitian government officials. Two defendants in a related case are scheduled to be tried this week in Miami federal court.

The announcements suggest this year’s lull in new enforcement actions is coming to an end. As of June 30, the DOJ brought just 8 actions and the SEC brought just 9, compared to 48 and 26, respectively, in all of 2010, according to Gibson Dunn & Crutcher’s newly released midyear FCPA update. (Read the report here.)

via $16 Million Settlement Comes as Report Predicts Uptick in FCPA Actions.

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British hacking scandal could gain U.S. legal scrutiny – CNN.com

July 12, 2011 By Leave a Comment

The hacking scandal embroiling Rupert Murdoch’s News International has already shut down a popular British newspaper and summoned a former prime minister to court. Will it now cross the Atlantic?

Legally, it could. Under American anti-bribery laws, the company could potentially face prosecution in Washington.

But the reality, said legal experts, is that unless bribery allegations go beyond London police officers and is found to be widespread, the case will likely remain on British soil.

News of the World, Britain’s 168-year-old newspaper, printed its last edition Sunday after accusations that its reporters illegally eavesdropped on the phone messages of murder and terrorist victims, politicians and celebrities. Police have identified almost 4,000 potential targets of phone-hacking.

There were also claims that reporters may have bribed police officers.

The potential liability flows from journalists at News of the World to its parent, News International, to its parent, News Corporation, which is a publicly held company in the United States.

The police bribes could be a violation of the Foreign Corrupt Practices Act (FCPA), which prohibits companies and its employees from giving money or anything of value to a foreign official in order to obtain or retain business, said Mike Koehler, a professor of business law at Butler University in Indianapolis.

“So, there does seem to be a basis for a U.S. investigation at this point,” he said.

If anyone at News Corporation participated in payments to police officers or authorized such payments or even knew about them and failed to stop them, the case could wind up at the U.S. Department of Justice.

via British hacking scandal could gain U.S. legal scrutiny – CNN.com.

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J&J Pays $70M To Settle Bribery Allegations – WSJ.com

April 9, 2011 By Leave a Comment

Johnson & Johnson (JNJ) agreed to pay $70 million to settle U.S. and U.K. allegations that it paid bribes to doctors in three European countries, as well as kickbacks to Iraq to illegally obtain business under former leader Saddam Hussein.

The health-care giant also agreed to enhance its compliance with U.S. antiforeign bribery laws and other requirements. If it meets these enhanced standards for three years, it may avoid criminal charges.

The news is the latest black eye for J&J, which has been grappling with a series of product recalls because of manufacturing-quality lapses, as well as government investigations of its U.S. marketing practices. J&J recently agreed to heightened government oversight of manufacturing in its McNeil Consumer Healthcare unit, the source of recalls of millions of bottles of over-the-counter medicines including Tylenol since 2009.

The settlement, which resulted from a known multiyear investigation, also highlights U.S. authorities’ stepped-up enforcement of the Foreign Corrupt Practices Act, or FCPA, which bars U.S. companies from bribing foreign officials. Other U.S.-based drug makers, including Eli Lilly & Co. (LLY) and Merck & Co. (MRK), have received inquiries from the government in recent years regarding their activities in foreign countries.

via 4th UPDATE: J&J Pays $70M To Settle Bribery Allegations – WSJ.com.

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Corruption Currents: Trends To Look For In 2011 – Corruption Currents – WSJ

December 31, 2010 By Leave a Comment

The anti-corruption world crackled with activity in 2010, with the U.S. (again) setting Foreign Corrupt Practices Act enforcement records, the Group of 20 turning its gaze toward the United Nations Convention against Corruption and the World Bank amping up its fraud and corruption investigations unit, to name a few major developments.

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But now it’s time to peer into the future, to what promises to be another groundbreaking year on several anti-corruption fronts. We’ve listed below 10 trends we expect to see in 2011. But don’t take our word for it — please, write us with your own forecasts.

More anti-corruption enforcement by foreign nations: The anti-graft group Transparency International found that seven parties to the OECD anti-bribery convention actively enforced it in 2010, up from four in 2009. The U.K. Bribery Act, which takes effect in April, has the potential to reach corruption anywhere on the globe, and U.K. investigators are eager to grab some of the market share from their counterparts in the U.S. Nigeria, meanwhile, has capitalized on U.S. anti-bribery cases, opening its own probes into Halliburton Co., Panalpina Group and others. Earlier this week, authorities in Malaysia and Honduras announced investigations that piggyback on the U.S. probe of French telecommunications company Alcatel-Lucent SA, which agreed to pay $137 million to resolve bribery allegations. And the U.S. now routinely includes language in settlement agreements requiring companies to cooperate with foreign authorities and multilateral development banks.

via Corruption Currents: Trends To Look For In 2011 – Corruption Currents – WSJ.

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Business Pays for Bribery Act – WSJ.com

August 4, 2010 By Leave a Comment

Bribery should not be condoned. Few business people would dare take issue with this statement, hence the dearth of voices being raised against the U.K. Bribery Act 2010, which is now on the statute book and due to come into force in April next year. Taking issue with a piece of legislation which is intended to toughen up the existing law against bribery does not look like good corporate citizenship.

Nevertheless, plenty of reservations about the Act are being aired privately and with good reason. This is a piece of legislation with huge implications for the conduct of businesses and not just those that are British. The territorial ambitions of the Act are so far reaching that any company with operations in the U.K. could fall foul of it, wherever in the world the alleged offence may be committed. And so extreme is the Act in its attempt to wipe out corrupt practices that it does not even allow the exception for ‘facilitation’ payments that exists under the United States Foreign Corrupt Practices Act.

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BAE Systems paid heavy fines over bribery allegations.

That sensible exception ensures that in countries where officials demand and expect a payment for doing their jobs, such as processing customs forms or issuing visas, it is possible for US companies to operate without falling foul of the FCPA. The Bribery Act makes no such concession.

via Business Pays for Bribery Act – WSJ.com.

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