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Big, Bold, and Bizarre

Many words could be used to describe Foreign Corrupt Practices Act enforcement in 2010.

The words I selected in this Year in Review piece recently published by BNA’s White Collar Crime Report are big, bold, and bizarre.

The article provides an overview of the year that was and describes the big, bold, and bizarre year in FCPA enforcement; the increased scrutiny of the FCPA and FCPA enforcement; and events related to the FCPA as well as other anti-corruption laws and initiatives.

DOJ Enforcement of the FCPA – Year in Review

A few weeks ago I ran a SEC FCPA enforcement year in review (here).

Today I highlight facts and figures from the DOJ’s FCPA enforcement program in 2010.

And what it year it had.

As noted in this recent DOJ release, “the Criminal Division’s Foreign Corrupt Practices Act (FCPA) enforcement involved imposition of $1 billion in penalties in FY 2010, the largest in the history of FCPA enforcement.”

In comparison, in 2000 the DOJ did not bring one FCPA enforcement action. The past decade has thus witnessed a remarkable transformation – not as to the FCPA itself (the statute has not changed since 1998), but as to FCPA enforcement and theories of prosecution both at the DOJ and the SEC.

As the DOJ’s former Assistant Chief for FCPA enforcement candidly stated (here), “the government sees a profitable program, and it’s going to ride that horse until it can’t ride it anymore.”

This post highlights the 16 DOJ corporate FCPA enforcement actions from 2010. Not included are BAE (an enforcement action (see here) in which the DOJ did not even charge FCPA offenses) or Lindsey Manufacturing (see here) given that the company was indicted and thus the enforcement action remains open.

Of the 16 enforcement actions, 6 of the actions were in Panalpina related actions; 2 were the related Bonny Island, Nigeria actions; and 2 were the related Alliance One and Universal actions. Thus, if one looks at unique enforcement actions (the best way to analyze FCPA facts and figures in my opinion), the DOJ broght 9 unique corporate FCPA enforcement actions in 2010.

In the 16 corporate FCPA enforcement actions from 2010, the DOJ brought in $870 million in criminal fines – thrown in the $400 million BAE enforcement action if you insist and the number is $1.27 billion.

Tack on the SEC’s recovery (both civil penalties and disgorgement) in 2010 corporate FCPA enforcement actions of approximately $530 million and one finds $1.8 billion in corporate FCPA fines, penalties and disgorgement in 2010.

DOJ FCPA enforcement in 2010 was both large ($240 million in criminal fines against both Technip and Snamprogetti, $93.6 million in criminal fines against Daimler) and small ($32,000 against Mercator Corporation in the bizarre James Giffen related case involving two snowmobiles, and $1.7 million against RAE Systems).

The numbers present some interesting results.

Despite aggressive DOJ rhetoric and despite the DOJ seeking a sentencing guidelines enhancement applicable to FCPA offenses (see here) in 10 of 12 FCPA enforcement actions where an analysis was possible, the DOJ agreed to a criminal fine below the minimum range suggested by the sentencing guidelines.

In these 10 cases, the average was approximately 25% below the minimum guidelines range and the distribution range was 55% below the minimum guidelines range (Pride International) and 5% below the minimum guidelines range (Panalpina).

The only two corporate FCPA enforcement actions from 2010 where the company paid a criminal fine within the guidelines range were Alliance One (the company voluntarily disclosed and receive a non-prosecution agreement) and Alcatel-Lucent.

[Note – why are only 12 of the 16 enforcement actions included in the above analysis? I excluded Innospec because the company’s claimed inability to pay (but see here) resulted in an invalid fine to guidelines analysis; I excluded Mercator Corp. because the DOJ and the company could not even agree on what guidelines to use; and I excluded Noble Corp. and RAE Systems (both enforcement actions resolved via an NPA) because the DOJ never set forth a guidelines range in the agreement or related documents].

During the November 2010 Senate FCPA hearing (see here) an issue discussed was the general lack of individual DOJ FCPA prosecutions.

How many corporate FCPA enforcement actions involved related individual prosecutions of company employees (not talking agents here such as in Innospec) by the DOJ (recognizing that such prosecutions may be forthcoming in the future)?

Of the 17 corporate DOJ enforcement actions or indictments (Lindsey Manufacturing is back in the mix here) 12 of the 17 enforcement actions (70%) have not involved (at least thus far) DOJ prosecutions of company employees. Included in the 12 enforcement actions are the top 3 from 2010 from a criminal fine perspective: Technip, Snamprogetti, and Daimler.

What about non-prosecution and deferred prosecutions vs. old fashioned law enforcement (i.e., if a company committed a crime the DOJ charged it and if the company did not commit a crime the DOJ did not charge it)?

2010 saw 15 such resolution vehicles (4 NPAs) and (11 DPAs).

As Gibson Dunn highlighted in this recent report, FCPA enforcement actions comprised approximately 50% of all DOJ NPA or DPA agreements.

Among the criticisms noted in the Gibson Dunn report is that “by continually entering DPAs and NPAs, the DOJ can shield its expansive interpretation of important statutes from judicial review.” As to the FCPA the report states, “because FCPA allegations against corporations rarely, if ever, go to trial, and DPAs and NPAs are subject to only minimal judicial scrutiny, the DOJ’s sometimes expansive interpretations of the FCPA is never truly tested.”

Spot on!

As evident from the material below, a typical way for DOJ to resolve corporate FCPA enforcement actions in 2010 was for the parent company to enter into an NPA or DPA and for a subsidiary (usually a foreign subsidiary) to plea to a criminal charge. Daimler, Alliance One, Universal, ABB, Panalpina, Pride International, Royal Dutch Shell, and Alcatel-Lucent all involved such hybrid resolution vehicles.

In the SEC year in review piece, I noted that 97% of the $529,967,294 collected in SEC FCPA enforcement actions in 2010 appears to be in enforcement actions that were voluntarily or otherwise publicly disclosed and not the result of original investigation by either the SEC or DOJ.

What does this number look like for DOJ FCPA enforcement actions in 2010 – recognizing that by disclosure I am talking about voluntary disclosure in the traditional sense (i.e. the company disclosing the conduct at issue to the enforcement agencies) as well as other forms of public disclosure (such as identification in the U.N. Oil for Food Report, the result of a whistleblower complaint to U.S. authorities, the result of prior foreign law enforcement agency investigations, or based on disclosures by other companies)?

Of the $870 million in criminal fines collected by the DOJ in FCPA enforcement actions, 97% would appear to fit this description as well.

Thus, much like the SEC, the DOJ also appears to be a reactive agency when it comes to corporate FCPA enforcement.

Set forth below are facts and figures from each 2010 DOJ corporate FCPA enforcement action.

Innospec (March 2010)

See here for the prior analysis and principal allegations.

Charges: Conspiracy to commit wire fraud and to violate the FCPA’s anti-bribery and books and records provisions; wire fraud; and FCPA anti-bribery and books and records violations.

Resolution Vehicle: Plea.

Guidelines Range: $101.5 – $203 million.

Penalty: $14.1 million (based on claimed inability to pay).

Disclosure: Yes.

Monitor: Yes – three years.

Individuals Charged by DOJ: No.

Daimler (March 2010)

See here for the prior analysis and principal allegations.

Charges: Daimler AG (conspiracy to violate the FCPA’s books and records provisions and violating the FCPA’s books and records provisions); DaimlerChrysler China Ltd. (conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions); DaimlerChrysler Automotive Russia SAO (conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions); Daimler Export and Trade Finance GmbH (conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions).

Resolution Vehicle: Daimler AG (deferred prosecution agreement); DaimlerChrysler China Ltd. (deferred prosecution agreement); DaimlerChrysler Automotive Russia SAO (plea); Daimler Export and Trade Finance GmbH (plea).

Guidelines Range: $116 – $232 million.

Penalty: $93.6 million (20% below the minimum guidelines range).

Disclosure: Yes.

Monitor: Yes – three years.

Individuals Charged by DOJ: No.

Technip (June 2010)

See here for the prior analysis and principal allegations.

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions.

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $318.4 – $636.8 Million

Penalty: $240 million (25% below the minimum guidelines range).

Disclosure: Yes.

Monitor: Yes – two years.

Individuals Charged by DOJ: No.

Snamprogetti (July 2010)

See here for the prior analysis and principal allegations.

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and aiding and abetting FCPA anti-bribery violations.

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $300 Million – $600 Million

Penalty: $240 million (20% below the minimum guidelines range)

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Alliance One (August 2010)

See here for the prior analysis and principal allegations.

Charges: Alliance One International AG (conspiracy to violate the FCPA, violations of the FCPA’s anti-bribery provisions, and violations of the FCPA’s books and records provisions); Alliance One Tobacco Osh LLC (conspiracy to violate the FCPA, violations of the FCPA’s anti-bribery provisions and books and records provisions).

Resolution Vehicle: Alliance One International Inc. (non-prosecution agreement); Alliance One International AG (plea); Alliance One Tobacco Osh LLC (plea).

Guidelines Range: $8.4 – $16.8 million.

Penalty: $9.45 million.

Disclosure: Yes.

Monitor: Yes – three years.

Individuals Charged by DOJ: Yes.

Universal Corp. (August 2010)

See here for the prior analysis and principal allegations.

Charges: Universal Leaf Tabacos Ltd. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions and violating the FCPA’s anti-bribery provisions).

Resolution Vehicle: Universal Corporation (non-prosecution agreement); Universal Leaf Tabacos Ltd. (plea).

Guidelines Range: $6.3 – $12.6 million

Penalty: $4.4 million (30% below the minimum guidelines range).

Disclosure: Yes.

Monitor: Yes – three years.

Individuals Charged by DOJ: No.

Mercator Corp. (August 2010)

See here for the prior analysis and principal allegations.

Charges: FCPA anti-bribery violations.

Resolution Vehicle: Plea.

Guidelines Range: The parties disagreed as to whether the 2009 or 2008 guidelines applied. If 2009, $650,000 – $1.3 million; If 2008, $30,000 to $60,000.

Penalty: $32,000.

Disclosure: Unclear.

Monitor: No.

Individuals Charged by DOJ: Yes (but Giffen pleaded to a misdemeanor tax violation).

ABB Ltd. (September 2010)

See here for the prior analysis and principal allegations.

Charges: ABB Inc. (conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions); ABB Ltd. – Jordan (conspiracy to commit wire fraud and to violate the FCPA’s books and records provisions).

Resolution Vehicle: ABB Ltd. (deferred prosecution agreement); ABB Inc. (plea); ABB Ltd. – Jordan (plea).

Guidelines Range: $30.42 – $60.2 million.

Penalty: $19 million (approximately 38% below the minimum guidelines range).

Disclosure: Yes.

Monitor: Company agreed to follow the recommendations of an independent compliance consultant.

Individuals Charged by DOJ: Yes.

Lindsey Manuf. (October 2010)

See here for the prior analysis and principal allegations.

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s anti-bribery provisions.

Resolution Vehicle: N/A

Guidelines Range: N/A

Penalty: N/A

Disclosure: Unclear.

Monitor: N/A

Individuals Charged by DOJ: Yes.

Panalpina (November 2010)

See here for the prior analysis and principal allegations.

Charges: Panalpina World Transport (Holding) Ltd. (conspiracy to violate and violating the FCPA’s anti-bribery provisions) ; Panalpina Inc. (conspiracy to violate the FCPA’s books and records provisions and aiding and abetting certain customers in violating the FCPA books and records provisions).

Resolution Vehicle: Panalpina World (deferred prosecution agreement); Panalpina Inc. (plea).

Guidelines Range: 72.8 million to $145.6 million.

Penalty: 70.6 million (approximately 5% below the minimum guidelines range).

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Pride International (November 2010)

See here for the prior analysis and principal allegations.

Charges: Pride International Inc. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions and violating the FCPA’s anti-bribery and books and records provisions); Pride Forasol S.A.S. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions, violating the FCPA’s anti-bribery provisions, and aiding and abetting violations of the FCPA’s books and records provisions).

Resolution Vehicle: Pride International Inc. (deferred prosecution agreement); Pride Forasol (plea).

Guidelines Range: $72.5 – $145 million.

Penalty: $32.6 million (approximately 55% below the minimum guideline range).

Voluntary Disclosure: Yes.

Monitor: No.

Individuals Charged: No.

Tidewater (November 2010)

See here for the prior analysis and principal allegations.

Charges: Tidewater Marine International Inc. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions and violating the FCPA’s books and records provisions).

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $10.5 – $21 million.

Penalty: $7.4 million (30% below the minimum guidelines range).

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Transocean (November 2010)

See here for the prior analysis and principal allegations.

Charges: Transocean Inc. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions; violating the FCPA’s anti-bribery provisions; and aiding and abetting FCPA books and record violations).

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $16.8 – $33.6 million.

Penalty: $13.4 million (20% below the minimum guidelines range).

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Noble Corp. (November 2010)

See here for the prior analysis and principal allegations.

Charges: N/A

Resolution Vehicle: Non-prosecution agreement.

Guidelines Range: Not addressed.

Penalty: $2.6 million.

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Royal Dutch Shell (November 2010)

See here for the prior analysis and principal allegations.

Charges: Shell Nigeria Exploration and Production Company Ltd. (conspiracy to violate the FCPA’s anti-bribery and books and records provisions; aiding and abetting FCPA books and records violations).

Resolution Vehicle: Deferred prosecution agreement.

Guidelines Range: $34.2 – $68.4 million.

Penalty: $30 million (approximately 15% below the minimum guidelines range).

Disclosure: No.

Monitor: No.

Individuals Charged by DOJ: No.

RAE Systems (December 2010)

See here for the prior analysis and principal allegations.

Charges: Although a non-prosecution agreement, the agreements states “knowing violations of the FCPA’s books and records and internal controls provisions.”

Resolution Vehicle: Non-prosecution agreement.

Guidelines Range: Not addressed.

Penalty: $1.7 million.

Disclosure: Yes.

Monitor: No.

Individuals Charged by DOJ: No.

Alcatel-Lucent (December 2010)

See here for the prior analysis and principal allegations.

Charges: Alcatel-Lucent S.A. (FCPA books and records and internal control provisions); Alcatel-Lucent France S.A., Alcatel-Lucent Trade International A.G., and Alcatel Centroamerica S.A. (conspiracy to violate the FCPA’s anti-bribery, books and records, and internal control provisions).

Resolution Vehicle: Alcatel-Lucent S.A. (deferred prosecution agreement); Alcatel-Lucent France S.A., Alcatel-Lucent Trade International A.G., and Alcatel Centroamerica S.A. pleas.

Guidelines Range: $86.58 – $173.16 million.

Penalty: $92 million.

Disclosure: Yes.

Monitor: Yes – three years.

Individuals Charged by DOJ: Yes.

The Akim Of Nookat, Lots Of Nigerian Customs Officials, The Congo Merchant Marine, And Lots Of Telecom Employees – The “Foreign Officials” Of 2010

A “foreign official”.

Without one, there can be no FCPA anti-bribery violation (civil or criminal).

Besides the fake Gabonese “foreign official” in the Africa Sting cases, who where the “foreign officials” of 2010?

This post describes the categories of “foreign officials” from 2010 corporate FCPA enforcement actions.

By my count, there were 21 corporate FCPA enforcement actions in 2010 (DOJ and SEC). (See here for my SEC FCPA Enforcement Year in Review – stay tuned for a similar DOJ FCPA Enforcement Year in Review).

I excluded from the tally, the General Electric SEC enforcement action as it related only to Iraqi Oil for Food conduct (and alleged kickback payments to the Iraqi government – not to any specific “foreign official) and thus resulted in FCPA books and records and internal controls charges only. There were other Iraqi Oil for Food cases in 2010, including Innospec, Daimler, and ABB, but these enforcement actions stayed on the list because the allegations related to other conduct as well.

In addition to the GE action, there were two additional FCPA books and records and internal controls only cases in 2010 – Natco Group and Veraz Networks. However, these enforcement actions stayed on the list because, let’s face it, if an employee from either of these companies consistently entertained their brother-in-law in the corporate suite and sought reimbursement for “client entertainment” you wouldn’t be reading about it – even if such conduct would nevertheless likely constitute an FCPA books and records and internal control violation. In other words, Natco Group and Veraz Networks, even if only FCPA books and records and internal controls cases, remain very much about the “foreign officials” in those cases.

Of the 20 corporate enforcement actions, 12 enforcement actions (60%) involved (in whole or in part) employees of alleged state-owned or state-controlled enterprises (“SOE”). In these cases, the enforcement agencies generally allege that such enterprises are “instrumentalities” of a foreign government and that such employees are therefore “foreign officials” under the FCPA. However, as I noted in my prepared Senate testimony (here) this central feature of FCPA enforcement contradicts the intent of Congress in enacting the FCPA.

The 60% figure from 2010 FCPA enforcement is similar to the 66% figure I calculated from 2009 FCPA enforcement (see here pages 410-414). As in 2009, the impact of this dubious “foreign official” interpretation extends beyond corporate FCPA enforcement actions as this interpretation is also at the core of several individual FCPA prosecutions – most notably in 2010, the many individual prosecutions (Lindsey, Lee, Aguilars, O’Shea, and Basurto) involving officials of Comision Federal de Electricidad – an alleged Mexican SOE.

Not only did SOE employees comprise the bulk of “foreign officials” in 2010, but so too did individuals with apparent ministerial or clerical duties.

Of the 20 corporate enforcement actions, 10 enforcement actions (50%) – including most notably all the Panlapina-related enforcement actions – involved (in whole or in part) officials with apparent ministerial or clerical duties such as customs, immigration and tax matters

Why is this noteworthy?

The FCPA’s original definition of “foreign official” was as follows. “… any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or any person acting in an official capacity for or on behalf of such government or department, agency or instrumentality. Such terms does not include any employee of a foreign government or any department, agency, or instrumentality thereof whose duties are essentially ministerial or clerical.”

This last sentence was the FCPA’s original (albeit indirect) facilitating payment or grease exception. The relevant House Report states in pertinent part as follows: “… a gratuity paid to a customs official to speed the processing of a customs document would not be reached by this bill. Nor would it reach payments made to secure permits, licenses, or the expeditious performance of similar duties of an essentially ministerial or clerical nature which must be performed in any event.”

When Congress amended the FCPA in 1988 it, among other things, amended the definition of foreign official by removing this indirect facilitating payment exception from the “foreign official” definition by creating a stand-alone facilitating payment exception currently found in the statute.

The relevant House Report indicates that Congress did not seek to disturb Congress’s original intent. “The policy adopted by Congress in 1977 remains valid, in terms of both U.S. law enforcement and foreign relations considerations. Any prohibition under U.S. law against this type of petty corruption would be exceedingly difficult to enforce, not only by U.S. prosecutors but by company officials themselves. Thus while such payments should not be condoned, they may appropriately be excluded from the reach of the FCPA. U.S. enforcement resources should be devoted to activities have much greater impact on foreign policy.”

The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2010. As apparent from the descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity; in other instances with virtually no specificity.

Natco Group

Kazakhstan immigration authorities; employees of the Kazakh Ministry of Labor

Innospec

Iraqi Ministry of Oil and its component oil refineries (MoO) officials;

Official X of the Indonesian Ministry of Energy and Mineral Resources who later became a senior official at BP Migas, an Indonesian state owned oil and gas company; officials at Pertamina, another state owned oil company related to BP Migas.

Daimler

Russian government officials employed at Russian government customers (Russian Ministry of Internal Affairs, the Russian military, the City of Moscow, the City of Ufa, and the City of Novi Urengoi); Machinoimport and Dorinvest, both Russian government purchasing agents for the City of Moscow; Russian government officials employed by state-owned customers; Russian military officials; official with the Department of Communal Economy and Town Improvements for the City of Ufa, a Russian municipal government official; a senior municipal government official with the city of Novi Urengoi.

Chinese government customers – including principally the Bureau of Geophysical Prospecting, a division of the China National Petroleum Corporation, a Chinese state-owned oil company and Sinopec, a Chinese state owned energy company; Changqing Petroleum – a Chinese state-owned or controlled entity in the energy sector.

Saigon Passenger Transport Company a government entity in Vietnam; government official with the government owned Saigon High Tech Park; officials of a Vietnamese government office associated with import licensing; Ministry of Public Security official.

High-level executive official of Turkmenistan’s government; various officials of the Turkmenistan government.

Nigerian government officials; Nigerian officials to secure a State House (Nigerian Presidential Complex) contract; high-level executive branch official of Nigeria; chief buyer for the State House contract; Savannah Sugar Company Ltd – a Nigerian sugar company that was then majority owned by the Nigerian government; Nigerian police force; government official with the Ministry of Industry and an employee of the Ministry; Comite d’ Organisation de Jeux Africains – a state controlled agency organization committee for the All-Africa games; a senior Nigerian diplomat in Brazil.

Government officials at customers in the Ivory Coast and elsewhere in West Africa.

Ghanaian army officials.

Senior executive branch official in Liberia.

Members of the Riga City Council; members of the political party in control of the Riga City council; members of a different political party that was in control of the Riga City Council.

Volanbusz – a state owned regional public transport company in Budapest.

An executive of Mangyong Trading Corporation, an instrumentality of the North Korean government.

E.S.H.O.T. – a public transport agency for the municipality of Izmir in Turkey; Turkish police through the Ministry of Interior.

Perum Damri – an Indonesian state-owned bus company; tax officials in Indonesia.

Croatian government officials; Croatian Ministry of the Interior official; IM Metal – a Croatian government controlled and partially owned former weapons manufacturer and an instrumentality of the Croatian government.

Technip

“The Nigerian National Petroleum Corporation (“NNPC”) was a
Nigerian government-owned company charged with development of Nigeria’s oil and gas wealth and regulation of the country’s oil and gas industry. NNPC was a shareholder in certain joint ventures with multinational oil companies. NNPC was an entity and instrumentality of the Government of Nigeria and officers and employees of NNPC were “foreign officials” within the meaning of the FCPA.” “Nigeria LNG Limited (‘NLNG’) was created by the Nigerian government to develop the Bonny Island Project and was the entity that awarded the related EPC contracts. The largest shareholder of NLNG was NNPC, which owned 49% of NLNG. The other owners of NLNG were multinational oil companies. Through the NLNG board members appointed by NNPC, among other means, the Nigerian government exercised control over NLNG, including but not limited to the ability to block the award of EPC contracts. NLNG was an entity and instrumentality of the Government of Nigeria and its officers and employees were “foreign officials.”

Nigerian government officials, including officials of the executive branch of the government of Nigeria; a political party in Nigeria; a senior official of the Ministry of Petroleum.

Eni / Snamprogetti

Same as Technip described above.

Veraz Networks

Employees of government-controlled telecommunications companies in China and Vietnam

Alliance One

“… The government of Kyrgyzstan established the Kyrgyz Tamekisi an agency and instrumentality of the government, to manage and control the government-owned share of the tobacco processing facilities throughout Kyrgyzstan. Kyrgyz Official A served as the General Director of the Tamekisi and as such was a foreign official within the meaning of the FCPA.” “In Kyrgyzstan, each municipal, district or provincial government unit was headed by a public official known as an “akim” who was appointed to the post by the President of Kyrgyzastan on the advice of the Prime Minister. Accordingly, the Akims were ‘foreign officials’ within the meaning of the FCPA. Each Akim could exercise authority over the sale of tobacco by the growers within the local geographical area.”

The following Akims are referenced: the Akim of Nookat; the Akim of Alabuka; the Akim of Alafuko; and the Akim of Chilik. Kyrgyz tax inspection police foreign officials.

“The government of Thailand established the Thailand Tobacco Monopoly as an agency and instrumentality of the government, to manage and control the government-owned tobacco industry in Thailand. The TTM supervised the cultivation of domestic tobacco crops, purchased imported tobacco and manufactured cigarettes and other tobacco products in Thailand. The TTM was headed by a managing director appointed by the Finance Ministry, who reported through a board of directors directly to the Minster of Finance of Thailand and, as such, was a ‘foreign official’ within the meaning of the FCPA.”

Universal

Same TTM officials as Alliance One.

Five Mozambiquen government officials and/or their family members; wife of an official in the Mozambique Ministry of Agriculture and Fisheries; brother of an official in Ministry of Agriculture and Fisheries; Governor in Mozambique.

High-ranking Malawian government officials; political opposition leader.

ABB

“Comision Federal de Electricidad was an electric utlility company owned by the United Mexican states and responsible for supplying electricity to all of Mexico other than Mexico City. CFE officials N, J, C, and G held official positions a CFE and had influence over decisions concerning ABB’s contracts with CFE. CFE officials N,J,C and G, were “foreign officials” as that term is defined in the FCPA.”

Panalpina

“Officials of the Nigerian Customs Service [NCS], a Nigieran government agency within the Ministry of Finance of the Federal Republic of Nigeria. The NCS was responsible for assessing and collecting duties and tariffs on goods imported into Nigeria. The NCS was an agency and instrumentality of the government of Nigiera and its employees were foreign officials within the meaning of the FCPA”; Nigerian government officials, most of the payments were paid to NCS officials; Nigeria Port Authority officials; Maritime Authority officials, police officials, Department of Peteroleum officials, immigration authority officials, and National Authority for Food and Drug Control officials;

“Nigerian National Petroleum Investment Management Services [NAPIMS] officials. NAPIMS is a component of Nigeria National Petroleum Corporation [NNPC], a Nigerian government owned oil company, that supervises and manages Nigeria’s investment in the oil and gas industry. NNPC was an agency and instrumentality of the government of Nigiera and its employees were foreign officials within the meaning of the FCPA. As part of its oversight authority, NAPIMS officials had the authority to approve or disapprove logistics contracts awarded for joint venture projets. NAPIMS employees were foreign officials.”

Angolan government officials responsible for customs and immigration matters; Angolan government officials responsible for Angolan oil and gas operations; customs officials, Economic Police, Port Authority officials, and other Angolan officials; Angolan immigration and/or Ministry of Petroleum officials; Angolan military officials.

Azeri government officials responsible for assessing and collecting duties and tariffs on imported goods; Azeri tax officials.

Brazilian government officials responsible for assessing and collecting duties and tariffs on imported goods.

Kazakh government officials, including officials responsible for assessing and collecting duties and tariffs on imported goods and officials responsible for administering and enforcing Kazakh tax policy.

Russian government officials responsible for assessing and collecting duties on imported goods.

Turkmen government officials responsible for assessing and collecting duties and tariffs on imported goods to expedite the release of shipments and undocumented shipments and to cirucumvent the official Turkmen customs and immigration regulations; Turkmen government officials responsible for auditing, assessing, and collecting taxes on economic activity in Turkmenistan; and Turkmen government officials responsible for enforcing Turkmenistan labor, health, and safety laws.

Pride International

Same NCS officials as described above.

“Petroleos de Venezuela S.A. [PDVSA] was a Venezuelan state-owned oil company. In 1975, the government of Venezuela established PDVSA, an agency and instrumentality of the government, to manage and control the exploration, production, refinement, and transport of oil as well as the exploration and production of natural gas in Venezuela. Officals and members of the board of directors of PDVSA were foreign officials within the meaning of the FCPA.”

“The customs, excise and gold appellate tribunal [CEGAT] in India was an administrative judicial tribunal. Judges who were members of the CEGAT were ‘foreign officials’ within the meaning of the FCPA.”

“The Mexico customs official was a customs administrator operations assistant for the Mexican Customs Service. The Mexico customs official was a foreign official within the meaning of the FCPA.”

Kazakh customs officials; Kazakh tax officials; Nigerian tax officials; Saudi customs officials; Congo Merchant Marine official; officials of Libya’s social security agency, INAS.

Tidewater

Same NCS officials as described above.

“The general state tax inspection office within the Ministry of Finance for the Republic of Azerbaijian (later renamed the Ministry of Taxes for the Republic of Azerbaijan – collectively referred to as the Azeri Tax Authority) was responsible for administering and collecting tax assessments and duties for the Republic of Azerbaijan. The Azeri Tax authority was an agency and instrumentality of the Republic of Azerbaijan and its employees, including tax inspectors, were foreign officials.

Transocean

Same NCS officials as described above.

GlobalSantaFe

Same NCS officials as described above.

“Government officials in Gabon, Angola, and Equitorial Guinea.”

Noble

Same NCS officials as described above.

Royal Dutch Shell

Same NCS officials as described above.

RAE Systems

“A significant number of RAE-KLH’s and RAE Fushun’s customers were [China] government departments and bureaus and large state-owned agencies and instrumentalities.”

“The Lanzhou City Honggu Mining Safety Bureau, for example, was a government customer. Other government clients included regional fire departments, emergency response departments, and entities under the supervision of the provincial environmental agency.”

“officials of a state-owned enterprise doing business in the Dagang Oil Field.”

“Deputy Director of a state-owned chemical plant.”

Alcatel Lucent

“Instituto Costarricense de Electricidad S.A. was a wholly state-owned telecommunications authority in Costa Rica responsible for awarding and administering public tenders for telecommunications contracts. ICE was governed by a seven member board of directors that evaluated and approved, on behalf of the government of Costa Rica, all bid proposals submitted by telecommunications companies. The board of directors was led by an executive president, who was appointed by the President of Costa Rica. The other members of the board of directors were appointed by the President of Costa Rica and the Costa Rican cabinet. Accordingly, officers, directors and employees of ICE were foreign officials.”

“High ranking official in the Costa Rican executive branch. Legislator in the legislative assembly.”

“Empresa Hondurena de Telecomunicaciones [Hondutel] a wholly state-owned telecommunications authority in Honduras, established under Honduran law, and it was responsible for providing telecommunications services in Honduras which until late 2002, included evaluating and awarding telecommunications contracts on behalf of the government of Honduras. Several senior government officials sat on Hondutel’s board of directors. Hondutel’s operations were overseen by another Honduran government entity, Comision Nacional de Telecomunicaciones. Profits earned by Hondutel belonged to the government of Honduras, though part of the profit was permitted to be used by Hondutel for its operations. Accordingly, employees of Hondutel were “foreign officials.”

“Comision Nacional de Telecomunicaciones [Contal] was the Honduran government agency that regulated the telecommunications sector in Honduras. Contal was part of the Honduran executive branch under the Secretariat of Finance. Conatel’s commissioners were appointed by the President of Honduras. Accordingly, officers, commissions and employees were foreign officials.”

“High ranking government officials in the Honduran executive branch.”

“Telekom Malaysia Berhad (‘Telekom Malaysia’) was a state-owned and controlled telecommunications provider in Malaysia. Telekom Malaysia was responsible for awarding telecommunications contracts during the relevant time period. The Malaysian Ministry of Finance owned approximately 43% of Telekom Malaysia’s shares, had veto power over all major expenditures, and made important operational decisions. The government owned its interest in Telekom Malaysia through the Minister of Finance, who had the status of a ‘special shareholder.’ Most senior Telekom Malaysia officers were political appointees, including the Chairman and Director, the Chairman of the Board of the Tender Committee, and the Executive Director. Accordingly, officers, directors and employees of Telekom Malaysia were ‘foreign officials’ within the meaning of the FCPA.”

“Taiwan Railway Administration was the wholly state-owned authority in Taiwan responsible for managing, maintaining and running passenger freight service on Taiwan’s railroad lines. It was responsible for awarding and administering all public tenders in connection with Taiwan’s railroad lines, including contracts to design, manufacture, and install an axle counting system to control rail traffic. TRA was an agency of Taiwan’s Ministry of Transportation and Communications, a cabinet level governmental body responsible for the regulation of transportation and communications networks and operations. Accordingly, officers and employees of TRA were foreign officials.”

“Members of the Legislative Yuan, the unicameral legislative assembly of the Republic of China.”

“Kenyan government officials who had played a role in awarding the original contract to French telecom.”

Government officials in Nigeria including the Nigerian police, a former Nigerian Ambassador to the United Nations to arrange a meeting with Nigerian Senior Government Official 1 – a high-ranking official in the Nigerian executive branch, and People Democratic Party officials.

“Bangladesh Telegraph and Telephone Board” – the state-controlled telecommunications services provider.

“Andinatel, Pacifictel, and Empressa Muncipal de Telecomunicaciones, Agua Potable, Alcantarillados y Saneamiento – all state-owned telecommunications companies.”

Empresa Nicaraguense de Telecomunicaciones S.A., state owned during the relevant time period

Angolan telecommunications company with close ties to Angolan senior government official – a high-ranking Angolan executive branch official.

An Ivory Coast company – registered in the Ivory Coast with ooperations in Ivory Coast and Burkina Faso. Company was owned by an Ivory Coast government official. Government official ran Ivory Coast Company’s operations from his government office and was a close advisor to a high-ranking official in the Ivory Coast excecutive branch.

Uganda company registered in Uganada with operations in that country. One of the owners was a close friend of an advisor to a high-ranking official in the Uganadan executive.

Senior executive of the state controlled celluar telephone company in Mali.

Lindsey Manufacturing

“Comision Federal de Electricidad [CFE] was an electric utlity company owned by the government of Mexico. During the time period relevant to this indictment, CFE was responsible for supplying electricity to all of Mexico other than Mexico City.”

“Official 1 was a Mexican citizen who held a senior level position at CFE. Official 1 became the sub-director of generation for CFE in 2002 and the Director of operations in 2007. Officials 1’s position at CFE made him a foreign official.”

“Official 2 was a Mexican citizen who also held a senior level position at CFE. Official 2 was the Director of Operations at CFE until that position was taken over by Offical 1 in 2007. Officials 2’s position at CFE made him a foreign official.”

Mercator Corp.

“three senior officials of the Kazakh Government”

This and That

Year in Review Perspectives

In this prior post, I shared some “Year in Review” perspectives of others.

I also recommend the following reads as well.

See here for Gibson Dunn’s “2010 Year-End FCPA Update.”

See here for Markus Funk’s (Perkins Coie) Bloomberg piece, “Another Landmark Year: 2010 FCPA Year-In-Review and Enforcement Trends for 2011.”

See here for the FCPA Blog’s “2010 FCPA Enforcement Index.”

Bribery Act News

Vivian Robinson QC (General Counsel to the UK’s Serious Fraud Office) will be one of the participant’s in Securities Docket’s January 13th webcast – “100 Days and Counting: The Impact of the U.K. Bribery Act on U.S. Companies.” See here to register.

Speaking of the Bribery Act, the U.K. Telegraph recently ran two articles (see here and here) featuring Lord Goldsmith, the former U.K. Attorney General now at Debevoise & Plimpton (here).

Although one of the articles is titled, “Bribery Act: Lord Goldsmith Says Look to the U.S.”, his comments in the article demonstrate why the U.K. should not look to the U.S. when it comes to enforcing and implementing its new law. Lord Goldsmith says, “You can’t have a system where you can avoid the court at least sanctioning what has been done.” Elsewhere, Lord Goldsmith says “over a period of time it [the Bribery Act’s provisions] will become clearer, but that is the problem; it becomes clearer as a result of cases taking place – that means someone has been rung through the mangle first.”

No trend in FCPA enforcement has been more troubling during this era of the FCPA’s resurgence than the use of non-prosecution and deferred prosecution agreements – resolution vehicles that completely, or for all practical purposes, bypass judicial scrutiny. See here for the December 2009 GAO report on NPAs and DPAs and the lack of judicial scrutiny. One of the many troubling results of the frequent use of NPAs and DPAs in the FCPA context is that issues do not become more clear over time. If anything the issues have become more cloudy.

Nearly, thirty-five years since enactment of the FCPA, we are still left to wonder as to many basic FCPA elements – we know what the enforcement agencies’ interpretations are – but that is about it.

The other Telegraph articles states as follows. “The Serious Fraud Office is believed to have several potential cases lined up to test out the new legislation from April, although the Ministry of Justice anticipates it bringing just one major case a year.”

One of my “bold” predictions for 2011 (see here) is that enforcement of the U.K. Bribery Act will be disciplined and measured.

Finally, yesterday Gibson Dunn released (here) an informative summary of its recent meeting with Richard Alderman (Director of the U.K. Serious Fraud Office). Among the U.K. Bribery Act topics covered are gifts and hospitality, facilitating payments, jurisdiction, the unique judicial review of SFO decisions (query whether such mechanisms should be implemented in the U.S. – at least as to FCPA cases) and reporting issues.

Director Alderman and others at the SFO deserve “two thumbs up” for their policy of active engagement as the U.K. nears implementation of the Bribery Act. I spent a useful and informative afternoon at the SFO’s London offices and my Q&A exchange with Director Alderman can be found here.

The SFO’s active engagement policy is one that ought to be modeled by other enforcement agencies.

SEC Enforcement of the FCPA – 2010 Year in Review

FCPA enforcement, it is not just about the DOJ. Granted, its sticks are less sharp than the DOJ’s, but the SEC also claims a significant piece of the FCPA enforcement pie (query whether it should – but that is a subject for another day). For an enforcement agency that, for a long time, did not want any part in enforcing the FCPA’s anti-bribery provisions (more on that in the future as well), the SEC in 2010 brought in $529,967,294 in corporate FCPA settlements. [Note this figure does not include the approximate $50 million the SEC assessed but waived against Innospec based on its claimed inability to pay].

This $529,967,294 breaks down as follows.

$20,182,000 in civil penalties (ABB’s $16.5 million civil penalty makes up approximately 82% of this figure).

$509,785,294 in disgorgement and prejudgment interest.

Thus, 96% of SEC FCPA enforcement settlement amounts in 2010 consisted of disgorgement and prejudgment interest.

Of the disgorgement and prejudgment interest amount, approximately 44% was in the two Bonny Island, Nigeria enforcement actions of 2010 (Technip and ENI/Snamprogetti). For a current Bonny Island bribery scorecard see here.

If one tries to analyze why some SEC FCPA enforcement actions include a civil penalty, disgorgement and prejudgment interest (such as General Electric, ABB, and Tidewater), whereas other enforcement actions include only disgorgement and prejudgment interest (such as Technip, Pride International, Transocean, Noble, Royal Dutch Shell, and RAE Systems), whereas other enforcement actions include only disgorgement and a civil penalty (GlobalSantaFe), whereas other enforcement actions include only disgorgement (such as Innospec, ENI/Snamprogetti, Daimler, Alliance One, Universal, Panalpina, and Alcate-Lucent), whereas other enforcement actions include only a civil penalty (such as NATCO and Veraz Networks), good luck and please enlighten us all with your insight.

It also remains a mystery as to how the SEC goes about its resolving decisions. For instance, in the Panalpina-related enforcement actions, an enforcement action generally alleging the same core conduct against numerous companies, all companies except Royal Dutch Shell were charged in a civil complaint. Royal Dutch Shell resolved its enforcement action via an SEC administrative cease and desist proceeding.

Based on publicly available information, the SEC appears to be a reactive, “me-too” enforcement agency when it comes to FCPA enforcement.

Of the $529,967,294 collected in SEC FCPA enforcement actions in 2010, 97% appears to be in enforcement actions that were voluntarily or otherwise publicly disclosed and not the result of original investigation by either the SEC or DOJ. The only SEC FCPA enforcement action of 2010 apparently not in this category is Royal Dutch Shell on the basis that its SEC’s filings indicate that it was contacted by the DOJ regarding Shell’s use of Panalpina. All other SEC FCPA enforcement actions of 2010 appear to have been voluntarily disclosed in the traditional sense (i.e. the company disclosing the conduct at issue to the enforcement agencies) or the result of some other public disclosure (i.e. the U.N. Oil for Food Report, the result of a whistleblower complaint to U.S. authorities, the result of prior foreign law enforcement agency investigations, or based on disclosures by other companies).

During the November 2010 Senate hearing (see here for complete coverage), it was noted that the DOJ’s FCPA enforcement program is largely corporate-focused, and that individual charges are often lacking in many DOJ FCPA enforcement actions, including the most egregious actions.

The same criticism can also be made of the SEC’s FCPA enforcement program. The SEC, at a minimum, has jurisdiction over the employees of companies settling an FCPA enforcement actio and can, as demonstrated by certain FCPA enforcement actions, pursue civil FCPA anti-bribery charges, civil FCPA books and records and internal control charges, as well as other related civil charges. However, in just 3 SEC FCPA enforcement actions in 2010 (Innospec, Alliance One, and Pride International) did the SEC charge individuals despite allegations that employees, including senior management, were engaged in the improper conduct at issue.

Like the DOJ, the SEC bases much of its FCPA enforcement on untested and dubious legal theories that have never been subjected to any meaningful judicial scrutiny. In the SEC context, FCPA defendants can settle enforcement actions “without admitting or denying” the SEC’s allegations. Thus, most companies find it easier, more cost efficient, and more certain to resolve disputes with its primary government regulator than to engage in long protracted litigation. Even the SEC recently acknowledged that settlement of an SEC enforcement action does “not necessarily reflect the triumph of one party’s position over the other.” (See here at page 949).

Thus, the facade of FCPA enforcement is present in SEC FCPA enforcement, not just DOJ enforcement, and 2010 highlighted this troubling trend.

For instance, many of the SEC’s enforcement actions (ABB and RAE Systems for example) hinge on employees of state-owned or state-controlled enterprises being “foreign officials” under the FCPA. Other enforcement actions, notably the Panalpina related enforcement actions, concern payments made to secure foreign licenses or permits. Another legal theory subject to controversy is successor liability such as in the Alliance One enforcement action where the company’s entire FCPA exposure was based, not on anything it did, but rather successor liability theories (same too as to the bulk of GE’s exposure).

This post provides an overview of SEC FCPA enforcement in 2010.

According to my figures, the SEC brought 19 corporate enforcement actions. As demonstrated below, 7 of the actions were in Panalpina related actions; 2 were the related Bonny Island, Nigeria actions, and 2 were the related Alliance One and Universal actions.

Thus, if one looks at unique enforcement actions (the best way to analyze FCPA facts and figures in my opinion), the SEC brought 11 unique corporate FCPA enforcement actions in 2010. 3 of these enforcement actions (Innospec, GE, and ABB) involved, in whole or in part, Iraqi Oil for Food conduct.

SEC FCPA enforcement in 2010 was both small (Natco – $65,000; Veraz Networks – $300,000) and large (ENI/Snamprogetti – $125 million; Technip – $98 million; Daimler – $91.4 million).

[Note as to the below information – “Voluntary Disclosure” means traditional voluntary disclosure as well as other public disclosure as discussed above. “Individuals Charged” means individuals (employed by the entity resolving the enforcement action) charged by the SEC.]

Natco (Jan. 2010)

See here for the prior analysis.

Principle Allegations: TEST Automation & Controls, Inc., a wholly-owned subsidiary of NATCO Group, “created and accepted false documents while paying extorted immigration fines and obtaining immigration visas in the Republic of Kazakhstan.” According to the complaint, “NATCO’s system of internal accounting controls failed to ensure that TEST recorded the true purpose of the payments, and NATCO’s consolidated books and records did not accurately reflect these payments.”

Charges: FCPA books and records and internal controls violations.

Settlement: $65,000 civil penalty; also administrative cease and desist order.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Of Note: According to the SEC, improperly characterizing even extorted payments is an independent violation of the law. The SEC order states that NATCO “expanded its investigation to examine TEST’s other worldwide operations, including Nigeria, Angola, and China, geographic locations with historic FCPA concerns.” However, the SEC order notes that “NATCO’s expanded internal investigation of TEST uncovered no wrongdoing.” This enforcement action (like several others in 2010) once again demonstrates that companies which voluntarily disclose conduct to the enforcement agencies, will likely be asked the “where else” question – even if no concrete evidence exists to suggest FCPA violations elsewhere. Answering this “where else” question significantly increases the costs of an FCPA disclosure and significantly expands the time frame to resolve the disclosed conduct.

Innospec (March 2010)

See here for the prior analysis.

Principle Allegations: “[f]rom 2000 to 2007, Innospec violated the anti-bribery, books and records and internal control provisions of the FCPA when it routinely paid bribes in order to sell Tetra Ethyl Lead (“TEL”) … to government owned refineries and oil companies in Iraq and Indonesia.” According to the SEC, “Innospec’s former management did nothing to stop the bribery activity, and in fact authorized and encouraged it.” The SEC alleges that “Innospec’s internal controls failed to detect the illicit conduct, which continued for nearly a decade.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $60,071,613 in disgorgement, but because of Innospec’s “sworn Statement of Financial Condition” all but $11,200,000 of that disgorgement will be waived.

Voluntary Disclosure: Yes.

Individuals Charged: Yes. See here and here for the SEC enforcement action against Ousama Naaman (Innospec’s agent in Iraq) and David Turner, (the Business Director of Innospec’s TEL Group).

Related DOJ Enforcement Action: Yes (as well as an enforcement action by the U.K. Serious Fraud Office).

Of Note: Despite getting a pass on paying approxmately $50 million in disgorgement, since the March 2010 enforcement action, Innospec has consistently reported positive financial results. See here. It is believed that the $877,000 the SEC will recover from Naaman is the largest SEC recovery against an individual FCPA defendant.

Daimler (April 2010)

See here and here for the prior analysis.

Principle Allegations: “From at least 1998 through 2008, Daimler AG, formerly known as DaimlerChrysler AG (“Daimler”), and certain of its subsidiaries and affiliates, violated the anti-bribery, books and records and internal controls provisions of the Foreign Corrupt Practices Act (the “FCPA”) by making illicit payments, directly or indirectly, to foreign government officials in order to secure and maintain business worldwide. During this time period, Daimler paid bribes to government officials to further government sales in Asia, Africa, Eastern Europe and the Middle East. In connection with at least 51 transactions, Daimler violated the anti-bribery provision of the FCPA by paying tens of millions of dollars in corrupt payments to foreign government officials to secure business in Russia, China, Vietnam, Nigeria, Hungary, Latvia, Croatia and Bosnia. These corrupt payments were made through the use of U.S. mails or the means or instrumentality of U.S. interstate commerce. Daimler also violated the FCPA’s books and records and internal controls provisions in connection with the 51 transactions and at least an additional 154 transactions, in which it made improper payments totaling at least $56 million to secure business in 22 countries, including, among others, Russia, China, Nigeria, Vietnam, Egypt, Greece, Hungary, North Korea, and Indonesia.

Charges: FCPA anti-bribery violations; FCPA books and records and internal control violations.

Settlement: $91.4 million in disgorgement.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Technip and Eni/Snamprogetti (June / July 2010)

Technip

See here and here for the prior analysis.

Principal Allegations: “Between at least 1995 and 2004, senior executives at Technip, among others, devised and implemented a scheme to bribe Nigerian government officials to assist in obtaining multiple contracts worth over $6 billion to build liquefied natural gas (“LNG”) production facilities on Bonny Island, Nigeria. A four-company joint venture called “TSKJ,” of which Technip was a member, won the contracts. To conceal the illicit payments, Technip and others, through the joint venture, entered into sham “consulting” or “services” agreements with intermediaries who would then funnel their purportedly legitimate fees to Nigerian officials. Specifically, Technip, through the joint venture, implemented this scheme by using a Gibraltar shell company controlled by a solicitor based in the United Kingdom (“the UK Agent”) and a Japanese trading company (“the Japanese Agent”) as conduits for the bribes.” “As a result of the scheme, numerous books and records of Technip contained false information relating to, among other things, the UK Agent and the Japanese Agent, and the payments made to them.” As to Technip’s internal controls violations, the SEC alleges as follows. “Technip conducted due diligence on the UK Agent that was not adequate to detect, deter or prevent the UK Agent from paying bribes, and Technip conducted no due diligence on the Japanese Agent.” “The due diligence procedures adopted by Technip only required that potential agents respond to a written questionnaire, seeking minimal background information about the agent. No additional due diligence was required, such as an interview of the agent, or a background check, or obtaining information beyond that provided by the answers to the questionnaire. A senior executive of Technip admitted that the due diligence procedures adopted by Technip were a perfunctory exercise, conducted so that Technip would have some documentation in its files of purported due diligence. In fact, Technip executives knew that the purpose of the agreements with the UK Agent was to funnel bribes to Nigerian officials, and therefore certain answers by the UK Agent to the questionnaire were false.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal control violations.

Settlement: $98 million in disgorgement and prejudgment interest.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Eni/Snamprogetti

See here and here for prior analysis.

Principal Allegations: “Between at least 1995 and 2004, senior executives at Snamprogetti, among others, devised and implemented a scheme to bribe Nigerian government officials to assist in obtaining multiple contracts worth over $6 billion to build liquefied natural gas production facilities on Bonny Island, Nigeria” that a four-company JV, of which Snamprogetti was a member, won the contracts to build. According to the SEC, “as a result of the scheme, numerous books and records of Snamprogetti and ENI contained false information relating to, among other things” Tesler and the Japanese Agent “and the payments made to them.” Specifically, the SEC alleged that “Snamprogetti’s business records […] contained the contracts with [Tesler] and the Japanese Agent, which falsely described the purpose of the contracts in order to make it appear that the agents would perform legitimate services.” According to the SEC, “these documents were part of Snamprogetti’s business records and supported Snampogetti’s financial statements, which were consolidated into ENI’s financial statements.” The SEC alleges that “Snamprogetti did not conduct due diligence” on Tesler or the Japanese Agent and “ENI failed to ensure that Snamprogetti complied with ENI’s policies regarding the use of agents.” Specifically, the SEC alleged that “ENI’s policies and procedures governed Snamprogetti’s use of agents” but that “ENI failed to ensure that Snamprogetti conducted due diligence on agents hired through JV’s in which Snamprogetti participated.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $125 million in disgorgement.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: The SEC charged Snamprogetti, a non-issuer, as “an agent of a U.S. issuer” with violating the FCPA’s antibribery provisions and knowingly falsifying books and records that supported the financial statements of ENI and knowingly circumventing ENI’s internal accounting controls. The SEC charged ENI with violating the FCPA’s books and records and internal control provisions. According to the SEC, “ENI exercised control and supervision of […] Snamprogetti during the relevant time and on certain of its business decisions, such as Snamprogetti’s entry into the JV.”

Veraz Networks (June 2010)

See here for the prior analysis.

Principle Allegations: “From 2007 to 2008, Veraz resellers, consultants, and employees made and offered payments to employees of government-controlled telecommunications companies in China and Vietnam with the purpose and effect of improperly influencing these foreign officials to award or continue to do business with Veraz.” “Veraz failed to accurately record these improper payments on the Company’s books and records, and failed to implement or maintain a system of effective internal accounting controls to prevent them in violation of the FCPA […] and to put in place internal controls that are reasonably designed to ensure that their books and records are accurate.”

Charges: FCPA books and records and internal control violations.

Settlement: $300,000 civil penalty.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Of Note: Although the complaint does not charge FCPA anti-bribery violations, the alleged “foreign officials” were employees of alleged state-owned or state-controlled telecommunications companies (China and Vietnam). Former SEC FCPA enforcement attorney Richard Grime criticized various aspects of the SEC’s enforcement action (see here).

General Electric (July 2010)

See here for the prior analysis.

Principal Allegations: “Two GE subsidiaries – along with two other subsidiaries of public companies that have since been acquired by GE – made illegal kickback payments in the form of cash, computer equipment, medical supplies, and services to the Iraqi Health Ministry or the Iraqi Oil Ministry in order to obtain valuable contracts under the U.N. Oil for Food Program.”

Charges: FCPA books and records and internal control violations.

Settlement: $23.4 million ($1 million penalty, $18.4 million in disgorgement, 4,080,665 in prejudgment interest)

Voluntary Dislcosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Of Note: Unlike other Iraqi Oil-For-Food cases, the GE enforcement action did not involve a related DOJ enforcement action. Also, unlike most public companies facing FCPA exposure, GE apparently did not previously disclose the SEC’s investigation. Also, according to GE’s release: “The SEC has identified 18 contracts under the Oil-for-Food Program that it alleges were not accounted for or controlled properly. Fourteen of these transactions involve businesses that were not owned by GE at the time of the transactions.”

Alliance One and Universal (Aug. 2010)

See here for the prior analysis.

Alliance One

Principal Allegations: “During the period from 1996 through 2004, Dimon, Incorporated (“Dimon”) made multiple improper payments to foreign officials in Kyrgyzstan and Thailand in violation of the Foreign Corrupt Practices Act (“FCPA”). During the period from 2001 through 2004, Standard Commercial Corporation (“Standard”) made multiple improper payments to foreign officials in Thailand in violation of the FCPA. “Despite their extensive international operations, Dimon and Standard lacked sufficient internal controls designed to prevent or detect violations of the FCPA. During the 2000-2004 period, Dimon and Standard each had a policy manual prohibiting bribery, but the training and guidance provided to their employees regarding compliance with the FCPA were not adequate or effective. Dimon and Standard each also failed to establish a program to monitor compliance with the FCPA by its employees, agents, and subsidiaries.” The SEC’s complaint also contains allegations about other unrelated payments in China, Thailand, Greece and Indonesia. In May 2005, Dimon and Standard merged to form Alliance One International, Inc. (“Alliance One”).

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $10 million in disgorgement.

Voluntary Dislcosure: Yes.

Individuals Charged: Yes. See here for the SEC enforcement action against Bobby Elkin (Dimon’s former Country Manager Kyrgyzstan), Baxter Myers (Dimon’s former Regional Financial Director), Thomas Reynolds (Dimon’s former Corporate Controller), and Tommy Williams (Dimon’s former Senior Vice President of Sales).

Related DOJ Enforcement Action: Yes.

Of Note: Alliance One’s entire exposure was based, not on anything it did, but rather successor liability theories.

Universal

Principal Allegations: “From 2000 through 2007, Universal Corporation violated the Foreign Corrupt Practices Act (the “FCPA”) by paying, through its subsidiaries, over $900,000 to govemment officials in Thailand and Mozambique to influence acts and decisions by those foreign officials to obtain or retain business for Universal. Those payments were directed by employees at multiple levels of the company, including management in its corporate offices and at its wholly-or majority-owned and controlled foreign subsidiaries. The Company had inadequate internal controls to prevent or detect any of these improper payments, and improperly recorded the payments in its books and records.” “Between 2000 and 2004, Universal subsidiaries paid approximately $800,000 to bribe officials of the government-owned Thailand Tobacco Monopoly (“TTM”) in exchange for securing approximately $11.5 million in sales contracts for its subsidiaries in Brazil and Europe. From 2004 through 2007, Universal subsidiaries made a series of payments in excess of $165,000 to government officials in Mozambique, through corporate subsidiaries in Belgium and Africa. Among other things, the payments were made to secure an exclusive right to purchase tobacco from regional growers and to procure legislation beneficial to the Company’s business.” “In addition, between 2002 and 2003, Universal, subsidiaries paid $850,000 to high ranking Malawian government officials. Those payments were authorized by, among others, two successive regional heads for Universal’s African operations. Universal did not accurately record these payments in its books and records.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $4.6 million in disgorgement.

Voluntary Dislcosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: The Alliance One / Universal enforcement action is believed to be the first time the enforcement agencies consolidated an enforcement action against two unrelated companies in such a fashion – likely due to the fact that a significant part of the improper conduct at both companies involved the same entity – The Thailand Tobacco Monopoly (“TTM”) – an alleged agency and instrumentality of the Thai government.

ABB (Sept. 2010)

Principal Allegations: “From 1999 to 2004, ABB, through a U.S. subsidiary and six foreign-based subsidiaries, offered and paid bribes to government officials in Mexico to obtain and retain business with government owned power companies, and paid kickbacks to Iraq to obtain contracts under the United Nations Oil for Food Program. In all, ABB’s subsidiaries made at least $2.7 million in illicit payments in these schemes to obtain contracts that generated more than $100 million in revenues for ABB.” “As evidenced by the extent and duration of the illicit payments to foreign officials, the large number of ABB subsidiaries involved in these bribery and kickback schemes, ABB’s knowledge from the prior Commission action of illicit payments by other ABB subsidiaries, the improper recording of millions of dollars of illicit payments in ABB’s books and records, ABB’s failure to detect these irregularities, and ABB’s failure to conduct sufficient due diligence on local agents and others, ABB failed to devise and maintain an effective system of internal controls to prevent or detect these anti-bribery and books and records violations.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $39.3 million ($17.1 milion in disgorgement, $5.7 million in prejudgment interest, and a $16.5 million civil penalty).

Voluntary Dislcosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: In 2004, ABB Ltd. resolved a separate SEC FCPA enforcement action (see here) involving conduct in Nigeria, Angola and Kazakhstan.

Panalpina Related Settlements (Nov. 2010)

Panalpina

See here for the prior analysis.

Principal Allegations: “Between 2002 and continuing until 2007, Panalpina, Inc. engaged in a series of transactions whereby it directed business to affiliated companies within the Panalpina Group, which then used part of the revenues generated from this business to pay a significant number of bribes to government officials in countries including Nigeria, Angola, Brazil, Russia, and Kazakhstan. These bribes were paid by the Panalpina Group companies in order to assist Panalpina, Inc.’ s issuer customers in obtaining preferential customs, duties, and import treatment in connection with international freight shipments. The practice of Panalpina Group companies making these payments was known to certain Panalpina, Inc. employees, including some members of Panalpina, Inc.’s management.” “The affiliated Panalpina Group companies generally invoiced the issuer customers for the bribes, along with other legitimate fees, either directly or through an affiliated billing entity. These invoices, which contained both legitimate and illegitimate costs incurred by the Panalpina Group companies, inaccurately referred to the payments as ‘local processing,’ ‘special intervention,’ ‘special handling,’ and other seemingly legitimate fees. In reality, these payments were bribes to local government officials in order to secure improper benefits for the issuer customers.”

Charges: FCPA’s anti-bribery violations; aiding and abetting FCPA books and records and internal control violations.

Settlement: $11.3 million in disgorgement.

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: The SEC specifically stated that Panalpina was not an issuer for purposes of the FCPA, but nevertheless charged Panalpina “while acting as an agent of its issuer customers” with violating the FCPA’s anti-bribery provisions and aiding and abetting its issuer customers’ violations of the FCPA’s anti-bribery provisions and books and records and internal control provisions.

Pride International

See here for the prior analysis.

Principal Allegations: “From in or about 2003 to in or about 2005, employees and/or agents of Pride authorized and/or made payments to third parties while aware of a high probability that all or a portion of such payments would be offered, given, or promised to foreign officials in Venezuela, India, and Mexico in violation of the U.S. Foreign Corrupt Practices Act.” “From approximately 2003 to 2005, Joe Summers, the country manager of the Venezuelan branch of a French subsidiary of Pride, and/or certain other managers authorized payments totaling approximately $384,000 to third-party companies believing that all or a portion of the funds would be given to an an official of Venezuela’s state-owned oil company in order to secure extensions of three drilling contracts. In addition, Summers authorized the payment of approximately $30,000 to a third party believing that all or a portion of the funds would be given to an employee of Venezuela’s state-owned oil company in order to secure an improper advantage in obtaining the payment of certain receivables.” “In or about 2003, a French subsidiary of Pride made three payments totaling approximately $500,000 to third-party companies, believing that all or a portion of the funds would be offered or given by the third-party companies to an administrative judge to favorably influence ongoing customs litigation relating to the importation of a rig into India. Pride’s U.S.-based Eastern Hemisphere finance manager had knowledge of the payments at the time they were made.” “In or about late 2004, Bobby Benton, Pride’s Vice President, Western Hemisphere Operations, authorized the payment of $10,000 to a third party, believing that all or a portion of the funds would be given by the third party to a Mexican customs official in return for favorable treatment by the official regarding certain customs deficiencies identified during a customs inspection of a Pride supply boat.” The SEC’s complaint also describes certain other “transactions entered into by wholly or majority owned Pride subsidiaries operating in Mexico, Kazakhstan, Nigeria, Saudi Arabia, the Republic of Congo, and Libya [that] were not correctly recorded in those subsidiaries’ books.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal control violations.

Settlement: $23.5 million ($19,341,870 in disgorgement, $4,187,848 in prejudgment interest).

Voluntary Disclosure: Yes.

Individuals Charged: Yes. See here for the SEC enforcement action against Joe Summers (former Venezuela Country Manager), here for the SEC enforcement action against Bobby Benton (former Vice President Western Hemisphere Operations).

Related DOJ Enforcement Action: Yes.

Of Note: Numerous of the allegations relate to employees of a state-owned or controlled enterprises being “foreign officials;” payments made to secure legitimate receivables; and/or payments made to secure licenses or permits.

Tidewater

Principal Allegations: “Between August 2001 and November 2005, Tidewater Inc. […] directly or through its subsidiaries, affiliates, employees and agents, violated [the FCPA’s anti-bribery and books and records and internal control provisions] by paying $160,000 in bribes to foreign government officials in Azerbaijan through a third party disguised as legitimate services to influence acts and decisions by these officials to resolve local Azeri tax audits in a Company subsidiary’s favor.” According to the SEC, “these improper payments were authorized by senior employees at Tidewater and its subsidiaries while knowing, or ignoring red flags which indicated a high probability, such payments would be passed to government officials, inaccurately recorded in the Company’s or its affiliates’ books and records, and Tidewater failed to maintain sufficient internal controls to prevent such payments.” As to Nigeria conduct, the SEC complaint alleges, in summary fashion, that “from in or about January 2002 through March 2007, Tidewater, through its subsidiaries and agents, also authorized the reimbursement of approximately $1.6 million to its customs broker in Nigeria used, in whole or in part, to make improper payments to Nigerian Customs Services (“NCS”) employees to induce them to disregard certain regulatory requirements in Nigeria relating to the temporary importation of the Company’s vessels into Nigerian waters.” According to the SEC, both the Azeri and Nigerian payments: “[w]ere improperly recorded as legitimate expenses in the Company’s books and records and all of them, with the exception of the 2003 Azerbaijan payments, were consolidated into Tidewater’s financial statements. Tidewater’s internal controls, including at least two internal audits, failed to detect numerous red flags which should have alerted its management that the Azerbaijan agent and Nigerian customs broker were likely using funds provided by Tidewater, in whole or in part, to make improper payments to government officials.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal control provisions.

Settlement: $8.3 million ($7,223,216 in disgorgement, $881,146 in prejudgment interest and a $217,000 civil penalty).

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Transocean

See here for the prior analysis.

Principal Allegations: “From at least 2002 through 2007, Transocean made illicit payments through its customs agents to Nigerian government officials to extend the temporary importation status of its drilling rigs, to obtain false paperwork associated with its drilling rigs, and obtain inward clearance authorizations for its rigs and a bond registration.” “Transocean made illicit payments through Panalpina World Transport Holding Ltd.’s Pancourier express courier service to Nigerian government officials to expedite the import of various goods, equipment and materials into Nigeria. In most instances, customs duties for these items were not paid by either Panalpina or Transocean. In addition, Transocean made illicit payments through Panalpina to Nigerian government officials to expedite the delivery of medicine and other materials into Nigeria.” As to the company’s internal controls, the SEC complaint simply states as follows. “… [a]s evidenced by the extent and duration of the improper payments to Nigerian officials, the improper recording of these payments in Transocean’s books and records, the failure of Transocean’s management to detect these irregularities, and the actual involvement of certain members of senior management, Transocean failed to devise and maintain an effective system ofinternal controls to prevent or detect these violations.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls.

Settlement: $7.2 million ($5,981,693 in disgorgement, $1,283,387 in prejudgment interest).

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: The enforcement action is largely based, as were other Panalpina related cases, on customs payments and expedited courier service payments.

GlobalSantaFe

See here for the prior analyis.

Principal Allegations: “From approximately January 2002 through July 2007,GlobalSantaFe Corp. (“GSF”) violated the anti-bribery, books and records, and internal controls provisions ofthe Foreign Corrupt Practices Act (the “FCPA”) when GSF made illegal payments through customs brokers to officials of the Nigerian Customs Service (“NCS”) in order to obtain preferential treatment during the customs process for the purpose of assisting GSF in retaining business in Nigeria. Instead of moving its oil drilling rigs out of Nigerian waters when GSF’s permit to temporarily import the rigs into Nigeria had expired, GSF, through its customs brokers, made payments to NCS officials in order to obtain documentation reflecting that the rigs had moved out of Nigerian waters, when in fact, the rigs had not moved at all.” “In addition, GSF, through its customs brokers, made payments to government officials in Gabon, Angola, and Equatorial Guinea in order to obtain preferential treatment during the customs process. These payments were described on invoices as for example, “customs vacation,” “customs escort,” “costs extra to police to obtain visa,” “official dues,” and “authorities fees.”

Charges: FCPA anti-bribery charges; FCPA books and records and internal controls.

Settlement: $5.85 million (approximately 3.75 million in disgorgement and a $2.1 million penalty).

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Of Note: This was the only Panalpina-related enforcement action that did not involve a DOJ component.

Noble

See here for the prior analysis.

Principal Allegations: “From January 2003 through May 2007, Noble authorized, and its Nigerian subsidiary made, payments to its customs agent in Nigeria, a portion of which certain Noble’s officers and other employees believed would be passed on to Nigerian government offcials. These payments to the customs agent were authorized and made to obtain temporary importation permits (“TIPs”) and extensions of TIPs for drilling rigs, including certain TIPs that were based on false paperwork.” As to the FCPA’s books and records charge, the SEC alleges that “Noble Nigeria recorded the portion of the payments it made to its customs agent that certain Noble personnel believed were being passed on to Nigerian government officials in Noble’s ‘facilitating payment’ account and in some cases to other operating expense accounts…” However, without elaborating the SEC states, “because these payments were not qualifying facilitating payments under the FCPA or otherwise legitimate expenses, Noble created false books and records by recording the payments as such.” As to the internal controls charges, the SEC alleges that “although Noble had an FCPA policy in place, Noble lacked sufficient FCPA procedures, training, and internal controls to prevent the use of the paper process and making of payments to Nigerian government officials to obtain TIPs and TIP extensions.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $5,576,998 ($4,294,933 in disgorgement and $1,282,065 in prejudgment interest).

Voluntary Disclosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: Recording an apparent facilitating payment as a “facilitating payment” is a violation of the FCPA’s books and records provisions if the SEC does not agree that the payment was a facilitating payment.

Royal Dutch Shell

See here for the prior analysis.

Principal Allegations: “From September 2002 through November 2005, SIEP, on behalf of Shell, authorized the reimbursement or continued use of services provided by a company acting as a customs broker that involved suspicious payments of approximately $3.5 million to officials of the Nigerian Customs Service in order to obtain preferential treatment during the customs process for the purpose of assisting Shell in obtaining or retaining business in Nigeria on Shell’s Bonga Project. As a result of these payments, Shell profited in the amount of approximately $14 million. None of the improper payments was accurately reflected in Shell’s books and records, nor was Shell’s system of internal accounting controls adequate at the time to detect and prevent these suspicious payments.”

Charges: None, action was resolved via an SEC administrative order finding violations of the FCPA’s anti-bribery provisions and books and records and internal control provisions.

Settlement: $18.1 million ($14,153,536 in disgorgement and $3,995,923 in prejudgment interest).

Voluntary Disclosure: Shell’s anual report states as follows. “In July 2007, Shell’s US subsidiary, Shell Oil, was contacted by the US Department of Justice regarding Shell’s use of the freight forwarding firm Panalpina, Inc and potential violations of the US Foreign Corrupt Practices Act (FCPA) as a result of such use. Shell has an ongoing internal investigation and is co-operating with the US Department of Justice and the US Securities and Exchange Commission investigations.”

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: Shell was the only company in the Panalpina related enforcement actions note to be charged via an SEC complaint.

RAE (Dec. 2010)

See here for the prior analysis.

Principal Allegations: “From 2004 through 2008” RAE Systems violated the FCPA “by paying, through two of its joint venture entities in China, approximately $400,000 to third party agents and government officials in China to influence acts or decisions by foreign officials to obtain or retain business for RAE Systems.” The payments “were made primarily by the direct sales force utilized by RAE Systems” at its two Chinese joint-venture entities: RAE-KLH and RAE-Fushun. “While the payments were made exclusively in China and were conducted by Chinese employees of RAE-KLH and RAE-Fushun, RAE Systems was aware of significant indications of ongoing bribery at RAE-KLH. At the time, RAE Systems failed to effectively investigate these indications, or red flags, and to stop the bribery from continuing. RAE System’s failure to act on these significant red flags allowed, at least in part, bribery to continue at RAE-KLH.” RAE Systems was held liable for RAE-KLH’s improper payments even though “RAE Systems Instruct[ed] KLH Personnel to Stop Bribery Practices.” According to the SEC, “while RAE Systems communicated these instructions to RAE-KLH personnel, RAE Systems did not impose sufficient internal controls or make any changes to the practice of sales personnel obtaining cash advances.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal control violations.

Settlement: $1.25 million ($1,147,800 in disgorgement; $109,212 in prejudgment interest).

Voluntary Dislcosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: According to the enforcement agencies, the standard of liability for payments made by joint venture partners appears to be something close to strict liability. Also the alleged “foreign officials” were primarily employees of alleged state-owned or state-controlled enterprises (China).

Alcatel-Lucent (Dec. 2010)

See here for the prior analysis.

Principal Allegations: “From December 2001 through June 2006, Alcatel, S.A., now called Alcatel-Lucent, S.A. (“Alcatel”), through its subsidiaries and agents, violated the Foreign Corrupt Practices Act (“FCPA”) by paying more than $8 million in bribes to foreign government officials. Alcatel made these payments to influence acts and decisions by these foreign government officials to obtain or retain business, with the knowledge and approval of certain management level personnel of the relevant Alcatel subsidiaries. Alcatel lacked sufficient internal controls to prevent or detect such improper payments, and improperly recorded the payments in its books and records.” “All of these payments were undocumented or improperly recorded as consulting fees in the books of Alcatel’s subsidiaries, and then consolidated into Alcatel’s financial statements. A lax corporate control environment aided Alcatel’s improper conduct. Alcatel failed to detect or investigate numerous red flags suggesting that its business consultants were likely making illicit payments and gifts to government officials in these countries at the direction of certain Alcatel employees. The respective heads of several Alcatel subsidiaries and geographical regions, some of whom reported directly to Alcatel’s executive committee, authorized extremely high commission payments under circumstances in which they failed to determine whether such payments were, in part, to be funneled to government officials in violation of the FCPA. These high-level employees therefore knew, or were severely reckless in not knowing, that Alcatel paid bribes to foreign government officials.”

Charges: FCPA anti-bribery violations; FCPA books and records and internal controls violations.

Settlement: $45.372 million in disgorgement.

Voluntary Dislcosure: Yes.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Of Note: In 2007, Lucent Technologies Inc. settled a separate SEC FCPA enforcement action (see here).

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