All instances of Foreign Corrupt Practices Act scrutiny have a “point of entry” – an occurrence which gives rise to initial FCPA scrutiny.
From there, FCPA scrutiny often expands into other business dealings, other countries, etc. This dynamic is a major reason why pre-enforcement action professionals fees and expenses are often the largest financial ramification of FCPA scrutiny, exceeding (often by multiples) settlement amounts in an actual FCPA enforcement action.
Approximately three weeks ago, it was reported (see here) that Uber Technologies was under FCPA scrutiny.
“Uber Technologies Inc. facing a federal probe into whether it broke laws against overseas bribery, has embarked on a review of its Asia operations and notified U.S. officials about payments made by staff in Indonesia, people with knowledge of the matter said.
As the Justice Department looks into a possible criminal case, Uber is working with law firm O’Melveny & Meyers LLP to examine records of foreign payments and interview employees, raising questions about why some potentially problematic business dealings weren’t disclosed sooner, said the people, who asked not to be identified because the details are private.
Attorneys are focused on suspicious activity in at least five Asian countries: China, India, Indonesia, Malaysia and South Korea. For instance, Uber’s law firm is reviewing a web of financial arrangements tied to the Malaysian government that may have influenced lawmakers there, the people said.
Late last year, Uber had a run-in with Indonesia police over the location of an office in Jakarta providing support to local drivers, people with knowledge of the events said. Police officers said the space was outside city zoning for businesses, so an employee decided to dole out multiple, small payments to police in order to continue operating there, the people said. The transactions showed up on the employee’s expense reports, described as payments to local authorities.
Uber fired the employee, the people said. Alan Jiang, the company’s head of Indonesia business who approved the expense report, was placed on a leave of absence and has since left the company. Jiang didn’t respond to requests for comment.
At least one senior member of the legal team at Uber initially decided not to report the incident to U.S. officials when he learned of it late last year, the people said. After the Justice Department approached Uber about possible violations of the Foreign Corrupt Practices Act, Uber informed officials about what happened in Indonesia.”
The article further states:
“Uber’s law firm is also investigating a corporate donation, announced in August 2016, of tens of thousands of dollars to the Malaysian Global Initiative and Creativity Centre, a government-backed entrepreneur hub. Around that time, a Malaysian pension fund, Kumpulan Wang Persaraan, invested $30 million in Uber, said people familiar with the deal. Less than a year later, the Malaysian government passed national ride-hailing laws that were favorable to Uber and its peers. Lawyers are trying to determine whether there was any form of quid pro quo.
Dealings in China and South Korea are also under review, though the details are unclear.”
FCPA Institute - Zoom (Oct. 27-29)
Elevate your FCPA knowledge and practical skills. Nine hours of integrated and cohesive instruction led by Professor Koehler (an FCPA expert with teaching experience). Learn more, spend less. Professional credential available.