A “foreign official.”
Without one, there can be no FCPA anti-bribery violation (civil or criminal). Who were the alleged “foreign officials” of 2023?
This post highlights the alleged “foreign officials” from 2023 corporate DOJ and SEC FCPA enforcement actions.
There were fourteen corporate FCPA enforcement actions in 2023. Of the fourteen actions, nine (64%) involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs).
By way of comparison:
- In 2022, 70% of corporate enforcement actions involved, in whole or in part, employees of alleged SOES (see here).
- In 2021, 75% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here).
- In 2020, 83% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- In 2019, 57% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2018, 53% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2017, 54% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2016, 78% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2015, 55% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2014 60% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2013, 77% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here);
- in 2012, 42% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 348-353);
- in 2011, 81% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 29-41);
- in 2010, 60% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 108-119); and
- in 2009, 66% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 410-44).
In 2014, in an issue of first impression for an appellate court, the 11th Circuit set forth a control and function test for whether an alleged SOE can be “instrumentality” under the FCPA such that its employees are “foreign officials” under the FCPA. As highlighted here and more extensively in this Supreme Court amicus brief supporting a cert petition, there were many flaws in the 11th Circuit’s reasoning. The Supreme Court declined to hear the case. As to whether Congress intended employees of SOEs to be “foreign officials” under the FCPA, see here for my “foreign official” declaration.
The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2023. As is apparent from the descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity. In other instances there is virtually no specificity as to the alleged “foreign officials.”
[Note: as in prior years, certain of the enforcement actions below technically only involved FCPA books and records and/or internal control charges or findings. As most readers know, actual charges in many FCPA enforcement actions hinge on voluntary disclosure, cooperation, collateral consequences, and other non-legal element issues. Thus, even if an FCPA enforcement action is resolved without FCPA anti-bribery charges, most such actions remain very much about the “foreign officials” involved – a fact evident when reading the actual enforcement action.]
Rio Tinto
SEC – “payment to a Guinean government official in connection with Rio Tinto’s successful efforts to retain its mining rights”
Flutter International
SEC – “Russian government officials” in connection with “efforts to promote the legalization of poker.”
Corsa Coal
DOJ – A “scheme to bribe Egyptian government officials in order to obtain and retain lucrative contracts to supply coal to Al Nasr Company for Coke and Chemicals (“Al Nasr”), an Egyptian state-owned and -controlled coke company.”
Frank’s International
SEC – “A senior Sonangol official responsible for Sonangol contract awards” (an Angolan state-owned enterprise responsible for the award of oil and natural gas exploration, development, and production contracts in that country)”
Phillips
SEC – “Employees of government-owned hospitals” in China.
Gartner
SEC – Individuals associated with “the South Africa Revenue Service (“SARS”).”
CorfiColombiana
DOJ/SEC – Colombian government officials, including Colombian Official 1 [described as a high-ranking government official in the legislative branch of the Colombian government], Colombian Official 2 [described as an executive at Colombia’s state-owned infrastructure agency Agencia Nacional de Infraestructura – ANI], and Colombian Official 3 [described as a high-ranking official in the executive branch of the Colombian government], to secure improper advantages in order to obtain and retain business for Corficolombian, specifically, to win a contract from ANI … to construct and operate a highway toll road in Colombia known as the “Ocafia-Gamarra Extension.”
3M
SEC – “Chinese health care officials employed by … state-owned entity customers.”
Clear Channel
SEC – “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.”
Albemarle
DOJ – “Government officials to obtain and retain catalyst business with state-owned oil refineries in three countries—Vietnam, Indonesia, and India” (PetroVietnam, Pertamina, and Indian Oil Corporation Limited).
SEC – Same as well as state-owned refineries in China, and the UAE
Lifecore
DOJ – “Bribes to a government official through a third-party intermediary to secure a wastewater discharge permit. Tanok employees and agents also paid a third-party service provider approximately $310,000 to prepare fraudulent manifests purporting to show the provider had delivered wastewater to a municipal water company for disposal while knowing that a portion of the fee was used to pay bribes to one or more local Mexican government officials to sign the manifests to help make them appear legitimate.”
Tysers
DOJ – Individuals associated with Seguros Sucre S.A. and Seguros Rocafuerte S.A. alleged state-owned insurance companies in Ecuador.
H.W. Wood
DOJ – Individuals associated with Seguros Sucre S.A. and Seguros Rocafuerte S.A. alleged state-owned insurance companies in Ecuador.
Freepoint Commodities
DOJ – Individuals associated with Petrobras – Brazil’s state-owned and state-controlled oil and gas company. The DOJ further alleged that an individual associated with Petrobras America Inc. (PAI), a Delaware corporation with its principal place of business in Houston, was a “foreign official” because PAI “was controlled by the government of Brazil and performed government functions and, thus, was an “agency” and “instrumentality” of a foreign government.
