Friday Roundup
Guilty plea, scrutiny alerts and updates, SEC Director of Enforcement to leave, sound analysis of the JPMorgan enforcement action, and for the reading stack.
It’s all here in the Friday roundup.
Mebiame Guilty Plea
As highlighted in this previous post, in August 2016 the DOJ unsealed a criminal complaint charging Samuel Mebiame, a Gabonese national connected to Och-Ziff, with conspiracy to violate the FCPA’s anti-bribery provisions. In pertinent part, the complaint alleged that Mebiame, on behalf of Och-Ziff and related entities, routinely paid bribes to foreign government officials in at least each Niger, Guinea and Chad.”
Today, the DOJ announced that Mebiame pleaded guilty.
Embraer Bribery Schemes Result In Net $187 Million FCPA Enforcement Action
Yesterday, the DOJ and SEC announced resolution of a Foreign Corrupt Practices Act enforcement action against Embraer, a Brazil-based aircraft manufacturer with American Depositary Shares listed on the New York Stock Exchange.
According to the DOJ and SEC, Embraer engaged in bribery schemes between 2008 through 2011 in the Dominican Republic, Saudi Arabia, and Mozambique in which the company approved bribe payments, through various third-parties, to various alleged “foreign officials.” According to the DOJ and SEC, Embraer’s wholly-owned U.S. subsidiary was active in the bribery schemes including by making payments from its New York based bank account. In addition, the enforcement action also involved improper conduct in India between 2005 and 2009. In total, the government alleges that Embraer made approximately $84 million as a result of the improper conduct.
The enforcement action involved a DOJ component in which the company agreed to pay a criminal penalty of approximately $107.3 million and an SEC component in which the company agreed to pay $83.8 million in disgorgement and $14.4 million in prejudgment interest. The SEC agreed to credit a disgorgement amount that Embraer agreed to pay to Brazilian authorities and this filing suggests that disgorgement amount is approximately $18.6 million. Thus, the net FCPA settlement amount was approximately $187 million.
This post goes in-depth into the enforcement action by summarizing the approximate 115 pages of resolution documents.
On National Drink Beer Day, AB InBev Agrees To Pay $6 Million To Resolve FCPA (And Related) Enforcement Action
Yesterday was National Drink Beer Day.
Fitting then that yesterday the SEC announced this administrative cease and desist order against Anheuser-Busch InBev, a Belgium brewer with American Depository Receipts traded on the New York Stock Exchange. The conduct at issue involved improper payments by an Indian joint venture “to Indian government officials to obtain beer orders and to increase brewery hours.” AB InBev held a minority interest in the joint venture which marketed and distributed the beer of AB InBev’s wholly-owned Indian subsidiary.
The SEC found that AB InBev violated the FCPA’s books and records and internal controls provisions. Without admitting or denying the SEC’s findings, AB InBev agreed to pay approximately $6 million to resolve the matter. As highlighted below, the SEC also found that AB InBev entered into a separation agreement with a former employee that violated an SEC Rule implementing Dodd-Frank’s whistleblower provisions.
Louis Berger International And Two Former Employees Resolve Enforcement Action
Last Friday, the DOJ announced the second corporate Foreign Corrupt Practices Act enforcement action of 2015.
It was against Louis Berger International Inc. (LBI, a New Jersey-based infrastructure and development company) and focused on the conduct of two former employees (one located in the Philippines, the other located in India) that allegedly occurred approximately 5 – 17 years ago in connection with projects in Indonesia, Vietnam, India and Kuwait.
The former employees are described as:
- Richard Hirsch was a high-level executive at the Company, located in the Philippines, who at times oversaw the Company’s overseas operations in, inter alia, Indonesia and Vietnam.
- James McClung was a high-level executive at the Company, located in India, who at times oversaw the Company’s overseas operations in Vietnam and India.
According to the DOJ, LBI directly and indirectly made payments totaling approximately $3.9 million to foreign government officials in India, Indonesia, Kuwait, Vietnam and elsewhere. To resolve the enforcement action, LBI agreed to pay $17.1 million pursuant to a deferred prosecution agreement and to engage a compliance monitor for a three year period.
Criminal Complaint
The criminal complaint charges LBI with conspiracy to violate the FCPA’s anti-bribery provisions.
According to the criminal compliant, the purpose of the conspiracy “was to make and conceal corrupt payments to foreign officials in India, Indonesia, Kuwait, Vietnam and elsewhere in order to obtain and retain contracts with government entities in those countries and, thus, to enrich the Company and the co-conspirators with the full economic benefits anticipated from such contracts.” In addition, the criminal complaint alleges that “terms like ‘commitment fee,’ ‘counterpart per diem,’ ‘marketing fee,’ and ‘field operation expenses’ [were used] as code words to conceal the true nature of the bribe payments” and that “cash disbursement forms and invoices [were utilized] which did not truthfully describe the services provided or the purpose of the payment.” Moreover, the complaint alleges that members of the conspiracy created “ostensibly legitimate but ultimately illicit accounts, or “slush funds,” for the payment of bribes through third parties.”
Deferred Prosecution Agreement
The criminal charges were resolved via a deferred prosecution agreement.
The Statement of Facts in the DPA state, under the heading “Overview of the Bribery Scheme” as follows.
“From in or about 1998 until in or about 2010, the Company, through its employees and agents, engaged in a scheme to pay bribes to various foreign officials in Indonesia, Vietnam, India and Kuwait to secure contracts with government agencies and instrumentalities in those countries on behalf of the Company and its subsidiaries and affiliates. The Company, through its employees and agents, together with others, discussed making the bribe payments to the foreign officials and the ways in which they intended to conceal the corrupt payments. For example, the Company, through its employees and agents, together with others, used terms like ‘commitment fee,’ ‘counterpart per diem,’ ‘marketing fee’ and ‘field operation expenses’ as code words to conceal the true nature of the bribe payments and utilized cash disbursement forms and invoices which did not truthfully describe the services provided or the purpose of the payment.
In order to effectuate the payments, the Company, through its employees and agents, utilized various methods. In many instances, employees and agents of the Company submitted inflated and fictitious invoices to generate cash that was then used later for the payment of bribes through intermediaries. The Company, through its employees and agents, would then wire certain funds from bank accounts of the Company in New Jersey to bank accounts in various other countries for the purpose of making payments to foreign officials. In Vietnam, the Company, through its employees and agents, used the Foundation – which was in part a local labor pool – as a conduit for the payment of bribes to foreign government officials in Vietnam to conceal the bribe payments.
In total, the Company, through its employees and agents, together with others, made payments directly and indirectly to foreign officials, including in Indonesia, Vietnam, India and Kuwait, totaling approximately $3,934,431.”
Under the heading “Corrupt Conduct in Indonesia,” the DPA states that “beginning in approximately 2005, the Company sought contracts with the Indonesian government as a subcontractor by interposing a one-man consulting company as the prime contractor in order to avoid directly paying bribes to foreign officials even though the Company was well aware that the prime contractor was paying bribes.” According to the DPA, in 2008 “when the law firm handling the Company’s internal review directed scrutiny [at a citizen and national of Indonesia employed by the Company in Jakarta] Richard Hirsch and others attempted to discourage [the employee] from speaking with the Company’s review team.” According to the DPA, Hirsch also communicated with co-conspirators on his personal e-mail account to avoid detection by the company.
Under the heading “Corrupt Conduct in Vietnam,” the DPA states that “the Company began its operations in Vietnam during the early 1990s and secured numerous public contracts across the county. In order to obtain and maintain these contracts, the Company through its employees and agents paid bribes to Vietnamese officials through the Foundation [a non-governmental organization which the Company engaged as a local sponsor, and which served as a key source for local labor and operational support in Vietnam.] Sometimes the bribe money was disguised as ‘donations’ to the Foundation paid from the Company’s bank accounts in New Jersey to a bank account jointly held by the Company and the Foundation in Vietnam. On other occasions the bribe money was masked by invoices from the Foundation that were paid from the Company’s New Jersey account to a joint account.” The DPA further states that beginning in “approximately 2005, when James McClung assumed responsibility for the Company’s Vietnam operations, the Company through its employees and agents generated bribe money by paying vendors for services that had never actually been rendered; those vendors would then serve as conduits for the payment of bribe money to foreign officials.”
Under the heading “Corrupt Conduct in India,” the DPA states: “Along with several consortium partners, the Company won two water development projects in Goa and Guwhati. The Company paid bribes to win both of those contracts. The bribe money was disguised as payments to vendors for services that had never actually been rendered. The Company through its employees and agents and its consortium partner kept track of the bribe payments by circulating a spreadsheet amongst themselves showing the proportionate share of each bribe that they had paid to the foreign officials overseeing their work on the Goa and Guwhati projects.”
Under the heading “Corrupt Conduct in Kuwait,” the DPA states: “In approximately 2005, the Company won a $66 million road construction project with the Kuwait Ministry of Public Works. In order to secure that contract, the Company through its employees and agents and its joint venture partner made a series of corrupt payments [totaling approximately $71,000) to an official with the Ministry of Public Works. Some of the payments were made upfront under the guise of ‘proposal’ costs. Other payments were made through a purported contract for ‘business development’ with another firm.”
In the 3-year DPA, LBI admitted, accepted and acknowledged responsibility for the conduct as described above.
Under the heading “relevant considerations,” the DPA states:
“[The DOJ enters] into this Agreement based on the individual facts and circumstances presented by this case and by LBI … Among the factors considered were the following: (a) after the government had made LBI … aware of a False Claim Act investigation, [the Company] conducted an internal investigation, discovered potential FCPA violations, and voluntarily self-reported to the [DOJ] the misconduct …; (b) [the Company’s] cooperation, including conducting an extensive internal investigation, voluntarily making U.S. and foreign employees available for interviews, collecting analyzing, and organizing voluminous evidence and information for [the DOJ] and providing updates to the [DOJ] as the conduct and results of the internal investigation; (c) [the Company] has engaged in extensive remediation, including terminating the employment of officers and employees responsible for the corrupt payments, enhancing its due diligence protocol for third-party agents and consultants, and instituting heightened review of proposals and other transactional documents for all Company contracts; (d) [the Company’s] improvements to date to its compliance program and internal controls, as well as its commitment to continue to enhance its compliance program and internal controls, including ensuring that its compliance program satisfies the minimum elements [set forth in the DPA]; (e) the nature and scope of the offense conduct; and (f) [the Company’s] agreement to continue to cooperate [with the DOJ] in any ongoing investigation.”
The Sentencing Guidelines calculation in the DPA sets forth an advisory fine range of $17.1 million – $34.2 million. The DPA states that the ultimate $17.1 million fine “is appropriate given the facts and circumstances of this case, including the cooperation in this matter and the nature and scope of the offense conduct.” As indicated in the DPA, $7.1 million of the fine amount is payable immediately with the remaining amount payable within 12 months.
Pursuant to the DPA, LBI is required to retain an independent compliance monitor for a three year period.
Typical of most corporate FCPA enforcement actions, the DPA contains a “muzzle clause” in which LBI agreed that it shall not directly or indirectly make any public statement contradicting the information set forth in the DPA.
As noted in the DOJ’s release, Hirsch (61, of Makaati, Philippines) and McClung (59, of Dubai, United Arab Emirates) each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA. The sentencing hearings for Hirsch and McClung are scheduled for Nov. 5, 2015.
Louis Berger issued this release which states:
“Louis Berger International, has agreed to a three-year deferred prosecution agreement and $17.1 million fine with the U.S. Department of Justice for self-reported improper business activities principally conducted overseas by former managers between 1998 and 2010. All of the managers associated with these improper business activities were separated from the company following the early findings of Louis Berger’s internal investigations.
“The DOJ has acknowledged the extensive global reforms undertaken at Louis Berger since 2010,” said Nicholas J. Masucci, Louis Berger chairman. “2010 was a pivotal year in our company’s history. It marked a clear departure from the past as we assumed new management, new processes and comprehensive system reforms that are the core of our global operations today. Today’s settlement is the critical final milestone in our reform, as it was important for us to take responsibility for the historic actions of former managers and close the chapter on the company’s pre-2010 era.”
Prior to Louis Berger’s 2010 settlement with the U.S. Department of Justice for improper billing on U.S. government overhead accounts, the company undertook a thorough review of past practices of former managers, including improper overseas business activities. The company self-discovered and self-reported potential Foreign Corrupt Practices Act infractions to the U.S. government starting in 2010 and has been working with the government to resolve these issues since that time. In total, the company self-identified and self-reported findings of misconduct in Vietnam, Indonesia, India and Kuwait between 1998 and 2010 totaling $3.9 million in bribes.
Since 2010, Louis Berger has undergone a massive $25+ million reform effort that resulted in new internal controls, new policies and procedures, and comprehensive systems investments, including a new global accounting system.
The company has actively supported the government in its investigation of the culpable individuals and their activities. In addition to separating these former managers from the company, the firm also has added new managers to key positions, including chief financial officer and controller, and regional management teams throughout Asia and the Middle East. Additionally, the company implemented a new corporate operational model to ensure greater centralized oversight and control of overseas business activities. Moreover, the company has reformed its ownership structure by implementing an Employee Stock Ownership Program.
The company established an independent compliance and ethics department under the oversight of an independent audit committee, introduced a global helpline through which employees can report potentially non-compliant activities, and implemented a global code of business conduct. Investments also have funded annual worldwide compliance, ethics and anti-corruption training for all employees.
Under the terms of the deferred prosecution agreement, the company will work with a government-appointed monitor to test and report on its internal processes and controls as well as its compliance and ethics policies and training for three years.
“Transparency and accountability are the hallmarks of a sustainable business, and we are a much more efficient, responsible and transparent company today than we were five years ago,” said Masucci. “We will continue to monitor and improve our existing compliance system while delivering quality work to our clients with a level of integrity they expect.”
Brian Whisler (Baker & McKenzie) and Michael Himmel (Lowenstein Sandler) represented LBI.
Friday Roundup
Exasperated, skittish, checking in, scrutiny alerts and updates, and for the reading stack. It’s all here in the Friday roundup.
Exasperated
This recent post highlighted Assistant Attorney General Leslie Caldwell’s recent speech in which she stated – in reference to FCPA internal investigations – “we do not except companies to aimlessly boil the oil.”
This recent Law360 article notes that some attorneys are exasperated by Caldwell’s remarks. The article states:
“[D]efense attorneys have balked at the idea that they’re spending too much time or money on investigations they’re conducting in large part for the government’s sake, saying they’re not willfully adding unnecessary work to an FCPA probe.
Many companies still feel like they’re being forced to walk the fine line between investigating problems thoroughly enough to satisfy the government without making it seem like they’re holding something back or impeding an investigation, according to Day Pitney LLP partner Bob Appleton.
“On the one hand they’re saying, ‘Be fast and don’t do an over-thorough job,’ but on the other hand, they’re saying, ‘If you only partially disclose you’ll get in trouble,’” said Appleton, a former assistant U.S. attorney.
And the costs of an investigation aren’t just limited to what a company self-reports, since the government will often then ask how the company can be sure the problem isn’t popping up anywhere else, according to Colleen P. Mahoney, partner at Skadden Arps Slate Meagher & Flom LLP.
“One of the biggest challenges is the expense after it starts,” Mahoney said about FCPA investigations at a Practicing Law Institute event Friday.
At the PLI event, SEC enforcement chief Andrew Ceresney said it was up to a company to decide what law firm to retain and how deep to investigate a potential bribery matter.
“We’re not micromanaging your internal investigation,” he said.”
Numerous posts on FCPA Professor have highlighted the staggering amount of pre-enforcement action professional fees and expenses (see also “FCPA Ripples“).
Speaking of which, Key Energy Services disclosed yesterday $18 million in expenses – for the first quarter of 2015 -“related to the previously disclosed Foreign Corrupt Practices Act (“FCPA”) investigations.”
I’ve had several conversations with FCPA practitioners about this issue. For what it is worth, the common response is something along the following lines: FCPA practitioner agrees that pre-enforcement action professional fees and expenses have spun out of control in many instances, but FCPA practitioner insists that his/her firm is not part of the problem.
Other practitioners are also pushing back as to other aspects of Caldwell’s recent speech – namely “what cooperation looks like”. In this recent post on the FCPA Blog an anonymous contributor states:
“When client companies and I have opted to cooperate early on and open up all information and records to the DOJ investigative units, I have seen the FCPA investigative team to be less interested in whether facts or evidence show violations or point to evidence raising red flags, as to how the client (and lawyer also) is bowing and mewling in anguish and sorrow before the government.
Provided the client is willing to genuflect and cry out mea culpa and beg for mercy (all three are required) there can be a happy and acceptable outcome in correcting corporate deficiencies and reaching an early valid resolution.
Executives who have somewhat less capacity to grovel underfoot are punished with the promise of crippling expansions of the process including raids and countless subpoenas to uninvolved officers, employees, consultants and accountants.
My experience is that this is not based on early findings of probable cause, but rather a haughty outrage that there was insufficient willingness to self-immolate.”
Skittish
Much has been written about whether the FCPA and its enforcement deters foreign investment. (See here for instance).
Companies obviously make foreign investment decisions based on a host of legal and non-legal risks and thus empirically separating and measuring the impact of FCPA enforcement on foreign investment decisions is difficult. Moreover, despite the general rise in FCPA enforcement concerning conduct in certain high risk jurisdictions such as China, India, and Brazil, there continues to be vast amounts of foreign direct investment in those countries by companies subject to the FCPA prohibitions.
Any “evidence” that the FCPA and its enforcement deters foreign investment thus tends to be anecdotal.
Following up on this prior post regarding Cambodia, the Phnom Penh Post reports:
“Despite high-profile US companies like Coca-Cola announcing plans to expand their footprint in the Kingdom, foreign investment from the US remains low compared to regional heavyweights. Large US businesses appear reluctant in setting up in the Kingdom due to corruption concerns, an unpredictable regulatory environment, and a lack of economic attractiveness that allows US interests to thrive.
[…]
Corruption remains one of the major factors keeping US companies away. According to an American Chamber of Commerce survey for 2015, 82 per cent of American businesses in Cambodia were dissatisfied with corruption – the second highest in the region after Laos.”
Checking In
Way back in 2010, Steven Jacobs, the former President of Macau Operations for Las Vegas Sands Corp., filed a civil lawsuit against Las Vegas Sands (LVS) in which Jacobs alleged various improprieties at LVS including in the FCPA context.
As noted in this Bloomberg article, Sheldon Adelson, the billionaire founder and chairman of LVS, recently testified in open court about the case and stated, among other things, that “after four years of investigating, they [the DOJ and SEC] haven’t found a shred of evidence yet.”
Scrutiny Alerts and Updates
CSC / ServiceMesh
CSC is a Virginia-based IT company and in October 2013 it acquired acquire ServiceMesh, a cloud management company. Various reports note that Eric Pulier, the former CEO of ServiceMesh, and head of the ServiceMesh division within CSC since ServiceMesh was acquired by that company, has left the company.
CSC sent the following statement to media about Pulier’s departure:
“On March 26, 2015 Eric Pulier was notified that his actions involving payments from the ACE Foundation—an organization founded by Mr. Pulier and not related to CSC—to former IT executives of Commonwealth Bank of Australia, a CSC client, violated CSC’s code of conduct related to conflicts of interests and appearance of improprieties. Mr. Pulier was further notified that these violations were grounds for termination of his employment.”
PTC
In this release, PTC stated:
“We have, since making a voluntary disclosure to the U.S. Securities and Exchange Commission and the Department of Justice, been cooperating to provide information to those agencies concerning expenditures by certain of our business partners in China and by our China business, including for travel and entertainment, that apparently benefitted employees of customers regarded as state owned enterprises in China. This matter involves issues regarding compliance with laws, including the U.S. Foreign Corrupt Practices Act. Negotiations with the SEC to reach a resolution of its investigation have begun but have not been concluded. We expect to begin negotiations with the Department of Justice to resolve its investigation in the near future. Resolution of this matter is likely to include fines and penalties. Given the uncertainty regarding whether settlements can be reached and, if reached, on what terms, we are not able to estimate a range of reasonably possible loss with regard to any such settlements and have not recorded any liability in connection with this matter. If settlements are reached, we believe that the associated financial liability could be material to our results of operations for the fiscal period in which the liability is recorded. Further, any settlement or other resolution of this matter could have collateral effects on our business in China, the United States and elsewhere.”
Braskem SA
Brazil-based Braskem recently disclosed in an SEC filing:
“In the context of anti-corruption allegations against certain individuals and entities in Brazil, including Petrobras, we were mentioned in allegations of improper payments made in order to receive favorable treatment in connection with certain contracts that we are party to with Petrobras. We have not received notice of any proceeding or investigation involving us that has been commenced in Brazil or the United States in connection with these allegations.
Although we have certain procedures in place, we have implemented additional procedures and controls to monitor our compliance with applicable anti-corruption laws and as a result of the recent allegations against us, have engaged Brazilian and U.S. legal counsel to conduct a voluntary internal investigation of this matter. If any of these allegations prove to be true, or if we or any of our subsidiaries, or joint venture partners fails to comply with any of these laws, we could be subject to applicable civil or criminal penalties, which could adversely affect our overall performance.”
[…]
In early March 2015, declarations made by defendants in lawsuits filed against third parties were made public, in which Braskem and two of its former executive officers were cited in allegations of supposed improper payments between 2006 and 2012 to benefit the Company in raw-material supply agreements entered into with Petrobras. As of April 24, 2015, to the knowledge of the management, Braskem has not received any notification of the filing of any proceeding or investigation by Brazilian or U.S. authorities.
In light of such facts, the Company’s Management and Board of Directors approved in April the internal plan for investigation into the allegations (“Investigation”) to be carried out by law firms experienced in similar cases in the United States and in Brazil. The law firms will work under the coordination of an ad hoc committee formed by members of its Board of Directors, specially created for this purpose.
In addition, the following measures have already been taken:
i) Voluntary announcement about the Investigation and periodical updates sent to regulatory agencies of capital markets in Brazil (Securities and Exchange Commission of Brazil – CVM) and the United States (Securities and Exchange Commission – SEC, and the Department of Justice – DOJ);
ii) Publication of two Material Fact notices and one Notice to the Market to clarify the news reports and to keep shareholders and the market informed of actions taken by the Company;
iii) Updating the Audit Board and external auditors about the progress of the Investigation and of the actions already taken.
Braskem and its subsidiaries are subject to a series of anticorruption and anti-bribery laws in the countries where they operate. To reduce the likelihood of infringement of such laws, a series of procedures and controls were implemented and are continuously being improved.
On the other hand, if any of the allegations proves to be true, the Company may be subject to material penalties envisaged in law. At this moment, the Company Management believes that it is not possible to estimate the duration or outcome of the Investigation and, consequently, whether it will have any impact on future financial statements.
The Management is committed to taking all the necessary measures to clarify the facts and will keep the market informed of any progress on this matter.”
United Technologies
Recently, the company disclosed:
“As previously disclosed, in December 2013 and January 2014, UTC made voluntary disclosures to the United States Department of Justice (DOJ), the Securities and Exchange Commission (SEC) Division of Enforcement and the United Kingdom’s Serious Fraud Office to report the status of its internal investigation regarding a non-employee sales representative retained by United Technologies International Operations, Inc. (UTIO) and IAE for the sale of Pratt & Whitney and IAE engines and aftermarket services, respectively, in China. On April 7, 2014, the SEC notified UTC that it was conducting a formal investigation and issued a subpoena to UTC. UTC continues to cooperate fully with the investigations and has responded to requests for documents and information. The DOJ and SEC also continue to request information, and the SEC issued a second subpoena on March 9, 2015 seeking documents related to internal allegations of alleged violations of anti-bribery laws from UTC’s aerospace and commercial businesses, including but not limited to Otis businesses in China. Because the investigations are ongoing, we cannot predict the outcome or the consequences thereof at this time.”
For the Reading Stack
The NY Times goes in depth regarding the U.S’s attempt to extradite Dmitry Firtash, a Ukrainian national criminally indicted in April 2014 along with others (see here for the prior post). According to the article:
“An Austrian judge will issue a crucial ruling in the case on Thursday at an extradition hearing here, where Mr. Firtash’s lawyers will argue that his arrest — on charges of bribing officials in India to secure a titanium mining deal that never materialized — was really an effort by the United States to remove him from public life in Ukraine, where he controls major business interests and still holds considerable clout. The Justice Department has repeatedly declined to discuss the case because it is an active prosecution, but the United States attorney’s office in Chicago, which led the investigation, has flatly denied any political motivations.
[…]
Andras Knopp, a Hungarian businessman and longtime associate of Mr. Firtash’s who is also charged in the case, said that the United States authorities had made no effort to extradite him, or even to talk to him about the case, even though he was at the center of the Indian titanium deal …”.
*****
The most recent edition of the always informative Debevoise & Plimpton FCPA Update is here. Among the topics discussed are developments in India including potential amendments to the Prevention of Corruption Act providing for liability for a commercial organizations whose employees bribe but also creating a defense for a commercial organization commercial organization if it can prove it had “adequate procedures” in place to prevent bribery.
*****
This Bloomberg article (“The Dinner Proposal That Led United Into Corruption Probe”) begins:
“United Airlines Inc. was seeking hundreds of millions of dollars in public investment for the airport in Newark when its chief executive dined with New Jersey Governor Chris Christie’s top Port Authority official in September 2011.
Jeffery Smisek, United’s chief executive officer, wanted funding for several projects, including an estimated $600 million extension of the PATH train from downtown Newark to the airport, as the airline worked through its merger with Continental Airlines.
Halfway through dinner at Novita, an Italian restaurant in Manhattan, Port Authority Chairman David Samson surprised the group with a request of his own. He complained that he and his wife had grown weary of the trip to their weekend home in Aiken, South Carolina, because the best flight out of Newark was to Charlotte, North Carolina, 150 miles away. Until 2009, Continental had run direct service from Newark to Columbia, South Carolina, 100 miles closer.
In a tone described by one observer as “playful, but not joking,” Samson asked: Could United revive that route? An awkward silence fell over the table.
Though the United CEO didn’t agree to the request at the dinner, according to the accounts of some who attended, the airline ultimately added the money-losing route that became known as “the chairman’s flight.” Now federal prosecutors are looking into whether its genesis crossed the line from legitimate bargaining into illegal activity.”
*****
A good weekend to all.