A Rare Peek Into FCPA Settlement Amount Negotiations
A typical Foreign Corrupt Practices Act enforcement action resolution vehicle is negotiated between the company and the DOJ/SEC.
Conduct at issue and how it is framed, charges, settlement amount, post-enforcement action obligations can all be the subject of negotiation.
Rarely though is the back and forth of negotiations – including as to settlement amount – in the public domain.
This recent post discussed how Clear Channel generally prevailed in an FCPA-related insurance coverage dispute.
The judicial decision by a Delaware Superior Court judge also highlights the back and forth negotiations between Clear Channel and the SEC ultimately resulting in the September 2023 $26.1 million enforcement action (disgorgement of $16,355,567, prejudgment interest of $3,760,920, and a civil monetary penalty in the amount of $6,000,000).
Clear Channel Generally Prevails In FCPA-Related Insurance Coverage Dispute
In 2023, Clear Channel Outdoor Holdings (a public subsidiary of iHeartMedia and one of the world’s largest outdoor advertising corporations) resolved a $26.1 million FCPA enforcement action.
The SEC stated: “This matter concerns violations of the anti-bribery, recordkeeping, and internal accounting controls provisions of the FCPA by Clear Channel in connection with the actions of its agent, a former indirect, majority-owned Chinese subsidiary, Clear Media Limited. From at least 2012 through 2017, Clear Media bribed Chinese government officials, both directly and through third parties, to obtain concession contracts required to sell advertising services to public and private sector clients for display on public bus shelters, street furniture, and billboards. In addition, Clear Media used sham intermediaries and false invoices to generate cash for off-book consultants engaged to win advertising business from government and private customers. From at least 2012 through 2019, Clear Channel failed to ensure that sufficient internal accounting controls were in place at Clear Media. Clear Channel received approximately $16.4 million in benefits as a result of Clear Media’s improper payments, which were inaccurately recorded as legitimate business expenses in Clear Channel’s consolidated books and records.”
Issues To Consider From The Clear Channel Outdoors Enforcement Action
This recent post highlighted the $26.1 million enforcement action against Clear Channel Outdoors based on the conduct of a former indirect, majority-owned Chinese subsidiary (Clear Media Limited).
This post highlights additional issues to consider from the enforcement action.
Timeline
As highlighted here, in April 2018 disclosed FCPA scrutiny.
Thus, from start to finish, Clear Channel’s FCPA scrutiny lasted an unconscionable 5.5 years.
Billboard Worthy: Clear Channel Outdoor Resolves $26.1 Million Enforcement Action
Approximately 5.5 years ago (see here for the prior post), Clear Channel Outdoor Holdings (a public subsidiary of iHeartMedia and one of the world’s largest outdoor advertising corporations) disclosed FCPA scrutiny based on the conduct of “several employees of Clear Media Limited, an indirect, non-wholly-owned subsidiary of the Company whose ordinary shares are listed …. on the Hong Kong Stock Exchange.”
Today, the SEC (an enforcement agency whose officials have previously stated that it “should focus on bringing matters to resolution swiftly”) announced a $26.1 million FCPA enforcement action against the company.
In summary fashion, this administrative order finds:
Friday Roundup
Funny, scrutiny alerts and updates, and for the reading stack. It’s all here in the Friday roundup.
Funny
According to the FCPA Blog, there is “nothing too complicated or expensive” about FCPA compliance.
That’s funny because on a daily basis FCPA Blog content is flanked by approximately 20 blinking and flashing ads from FCPA Inc. participants.