The FCPA repeat offender list may substantially grow as Reuters reports that “the U.S. FBI is investigating corporate giants Johnson & Johnson, Siemens AG, General Electric Co and Philips for allegedly paying kickbacks as part of a scheme involving medical equipment sales in Brazil.”
As highlighted in this prior post, there are several companies in the FCPA repeat offender club.
As first highlighted in this 2017 post and rebooted here in connection with new information, ABB (a Swiss-based power and automation technology company) may become a three-time FCPA violator.
First, some relevant background.
As highlighted here, in 2010 tobacco company Alliance One International resolved an approximate $19.5 million Foreign Corrupt Practices Act enforcement action concerning conduct in Kyrgyzstan, Thailand, China, Greece, and Indonesia. In resolving the SEC matter Alliance One consented to the entry of final judgment permanently enjoining it from violating the FCPA including the books and records and internal controls provisions.
Last week, Alliance One (now known as Pyxus International, Inc.) became a repeat offender of the FCPA’s books and records and internal controls provisions in a so-called non-FCPA FCPA enforcement action (i.e. the books and records and internal controls violations did not involve foreign bribery).
As highlighted in this post, 13 companies have resolved FCPA enforcement actions – not once – but twice. Four of these instances have occurred in just the past approximate 1.5 years.
Note: this post uses the term repeat offender to mean a business organization that has resolved more than one FCPA enforcement action regardless of which agency (the DOJ or SEC) brought the enforcement action; regardless of the form of resolution (plea agreement, NPA, DPA, administrative order, etc.) and regardless of whether the charges or findings were anti-bribery violations vs. books and records and internal controls violations in connection with foreign bribery issues).
This previous post highlighted the SEC’s recent $7.8 million enforcement action against medical device company Stryker.
This post continues the analysis by highlighting additional issues to consider.
Two Ways to Look at Repeat Offenders
As highlighted in the prior post, Stryker is now in the FCPA repeat offender club. There are two ways to look at certain of the companies on the list.
On the one hand, one could view these companies as corrupt companies without a commitment to compliance who did not learn any lesson from the first time the company resolved an FCPA enforcement action.