Scrutiny alerts and updates, charged, it needs to stop, and my answer. It’s all here in the Friday roundup.
Scrutiny Alerts and Updates
In March 2018, Plantronics (an audio communications company) announced that it entered into a definitive agreement by which it would acquire Polycom in a cash and stock transaction valued at $2.0 billion. The transaction closed in early July and recently Plantronics disclosed:
“The U.S. Securities and Exchange Commission and the U.S. Department of Justice are conducting investigations into possible violations of the U.S. Foreign Corrupt Practices Act by Polycom, relating to conduct prior to its July 2, 2018 acquisition by Plantronics. Polycom is cooperating with these agencies regarding these matters. Plantronics is unable to estimate the duration, scope or outcome of these investigations or the probability or range of any potential loss. Any potential liability would be expected to be reimbursed through funds retained in escrow.”
In 2010, French oil and gas company Technip resolved an approximate $340 million FCPA enforcement action concerning conduct at Bonny Island, Nigeria. (See here and here for prior posts). Recently the company (now known as TechnipFMC) disclosed:
“On March 28, 2016, FMC Technologies received an inquiry from the U.S. Department of Justice (“DOJ”) related to the DOJ’s investigation of whether certain services Unaoil S.A.M. provided to its clients, including FMC Technologies, violated the U.S. Foreign Corrupt Practices Act (“FCPA”). On March 29, 2016, Technip S.A. also received an inquiry from the DOJ related to Unaoil. We are cooperating with the DOJ’s investigations and, with regard to FMC Technologies, a related investigation by the U.S. Securities and Exchange Commission.
In late 2016, Technip S.A. was contacted by the DOJ regarding its investigation of offshore platform projects awarded between 2003 and 2007, performed in Brazil by a joint venture company in which Technip S.A. was a minority participant, and we have also raised with DOJ certain other projects performed by Technip S.A. subsidiaries in Brazil between 2002 and 2013. The DOJ has also inquired about projects in Ghana and Equatorial Guinea that were awarded to Technip S.A. subsidiaries in 2008 and 2009, respectively. We are cooperating with the DOJ in its investigation into potential violations of the FCPA in connection with these projects. We have contacted the Brazilian authorities and are cooperating with their investigation concerning the projects in Brazil and have also contacted French authorities about certain of the existing matters.
Certain of the government investigations have identified issues relating to potential non-compliance with applicable laws and regulations, including the FCPA, Brazilian and French law, related to these historic matters.”
Earlier this week, the DOJ announced:
“The former Minister of Industry of Barbados [Donville Inniss] was arrested Friday and had his initial court appearance today in connection with an indictment charging him with laundering bribes that he allegedly received from a Barbadian insurance company in exchange for official actions he took to secure government contracts for the insurance company.
The indictment alleges that in 2015 and 2016, Inniss took part in a scheme to launder into the United States approximately $36,000 in bribes that he received from high-level executives of a Barbadian insurance company. At the time, Inniss was a member of the Parliament of Barbados and the Minister of Industry, International Business, Commerce, and Small Business Development of Barbados. In exchange for the bribes, Inniss leveraged his position as the Minister of Industry to enable the Barbadian insurance company to obtain two government contracts. To conceal the bribes, Inniss arranged to receive them through a U.S. bank account in the name of a dental company, which had an address in Elmont, New York.”
As alleged in the indictment
“Barbados Company Executives 1, 2 and 3 caused the Barbados Company’s majority shareholder, the Bermuda Company, to make bribe payments to the defendant Donville Inniss through a United States bank account in the name of the New York Dental Company, which had no actual business with the Barbados Company.”
According to this report, the insurance company is Insurance Corporation of Barbados Ltd in which BF&M Ltd. has a majority interest. In terms of a future FCPA enforcement action against these companies and associated executives, the DOJ has frequently premised jurisdiction over foreign actors based on payments made through U.S. bank accounts.
It Needs To Stop
It’s a disgraceful practice. (See here for a prior post).
A for profit conference firm markets our public officials to drive attendance to their paid event. The latest example is below.
Do our FCPA enforcement officials know that they are being used in this way by for profit companies? If so, why do they acquiesce in the practice?
This recent FCPA Blog post below asks: “but given increased enforcement, why do levels of corruption remain so high?”
Here is my answer.
Because foreign trade barriers and distortions in foreign markets are often the root causes of bribery and a reduction in bribery will not be achieved through ad hoc enforcement actions, but rather a reduction in trade barriers and distortions. For several examples, see here and here for prior posts.
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