Acting Assistant Attorney General Blanco Delivers FCPA Speech
Today, Acting Assistant Attorney General Kenneth Blanco delivered these remarks at a Foreign Corrupt Practices Act / OECD Convention Anniversary Conference held at NYU School of Law. This post excerpts portions of Blanco’s remarks.
But first a few comments.
In his speech, Blanco states that it “is astonishing to think about what the FCPA and OECD Anti-Bribery Convention have achieved in a relatively short period of time.” That of course depends on what the word “achieve” means. On one level, has the FCPA really “achieved” (after 40 years – not exactly a “relatively short time period”) its objective of reducing bribery given that there are more enforcement actions, not fewer, as the FCPA has matured?
Various Individuals Associated With Rolls-Royce Criminally Charged In Connection With Kazakhstan – Chinese Pipeline Project
As highlighted in prior posts here and here, in January 2017 the DOJ announced a $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce. The allegations included several generic references to employees at Rolls-Royce and Rolls-Royce Energy Systems (RRESI, an indirect subsidiary located in Ohio) who conspired to cause “to make over $35 million in commission payments to commercial advisors and others, knowing that the commission payments would be used to bribe foreign officials on behalf of Rolls-Royce and RRESI in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq and elsewhere, in exchange for foreign officials’ assistance in providing confidential information and awarding contracts to Rolls-Royce, RRESI, and affiliated entities.”
Earlier this week, the DOJ announced an FCPA enforcement action against five individuals based on the same Kazakhstan conduct alleged in the prior corporate action. That is, bribery in connection with an RRESI contract to supply gas turbine units to Asia Gas Pipeline LLC (AGP) for approximately $145 million.
An FCPA Enforcement Action Involving A U.S. Government Aid Program (With A Few Ironies)
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
Yesterday’s post highlighted a number of Foreign Corrupt Practices Act enforcement actions in connection with U.S. government aid or assistance programs.
This post goes into more detail regarding the DOJ’s 2002 FCPA enforcement action against Richard Pitchford (the Vice President and Country Manager in Turkmenistan for the Central Asia American Enterprise Fund (CAAEF), an entity wholly funded by a $150 million appropriation from Congress pursuant to the Support for Eastern European Democracy Act of 1989 and the Freedom for Russia and Emerging Eurasian Democracies and Open Market Support Act of 1992).
One of the ironies with this enforcement action (there is another highlighted at the end of the post) is that prior to the enforcement action Pitchford was quoted as saying: “The potential in Central Asia is tremendous, especially in Turkmenistan because of its proximity to Turkey and the Persian Gulf. What’s missing is government political will to do the job. There’s no doubt this is a dictatorship and from top to bottom, it’s corrupt.” A short time later, Pitchford himself would be prosecuted for corruption.
Bribery Involving World Bank Officials
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
As noted in this post, one interesting aspect of the recently announced Foreign Corrupt Practices Act enforcement action against Joseph Baptiste is he previously entered into a plea agreement but does not intended to honor the plea agreement.
As highlighted below, the FCPA enforcement action against Ramendra Basu (a former World Bank official) for, among other things, alleged bribery in Kenya involved a similar dynamic and this post summarizes the enforcement action as well as a related enforcement action against Gautam Sengupta (a former World Bank Task Manager).
You Don’t Need To Look Far For The Location Resulting In Several Individual FCPA Enforcement Actions
This prior post highlighted the DOJ’s recently announced Foreign Corrupt Practices Act enforcement action against Joseph Baptiste for alleged bribery in Haiti.
The Baptiste enforcement action is just the latest in a long list of FCPA enforcement actions (all of the criminal actions were against individuals associated with small, privately-held companies) alleging improper business conduct in Haiti (a country located a short distance from the U.S.).
What makes this unusual is that Haiti attracts (relatively speaking compared to many other countries) little business activity by those subject to the FCPA. But then again, perhaps one of the reasons for this lack of business activity is the FCPA itself. As highlighted in this 2010 post, some called for the FCPA not to apply to doing business in Haiti arguing: “one of the best way to help Haiti” is to “pass a law stating that the FCPA does not apply to dealings in Haiti. As it stands right now, U.S. businesses are unwilling to take on this legal risk and the result is similar to an embargo. You can’t do business in Haiti without paying bribes.”