- FCPA Professor - https://fcpaprofessor.com -

Friday Roundup

Fear mongering and the dark empire, FCPA scrutiny of Hamid Karzai’s brother, the DOJ’s kleptocracy unit takes shape, and survey findings … it’s all here in the Friday roundup.

Fear Mongering and the Dark Empire

What does Sharie Brown (here [1]), Chair of DLA Piper’s Foreign Corrupt Practices Act, Anti-Corruption and Corporate Compliance Practice, think about the U.K. Bribery Act, the surge in FCPA Inc., and the revolving door? See here [2] for a recent interview with Corporate Crime Reporter.

A Future Afghanistan Related FCPA Enforcement Action?

A federal grand jury in the Southern District of New York is reportedly hearing evidence against Mahmood Karzai (a dual Afghan and U.S. citizen and the brother of Afghan President Hamid Karzai) including possible evidence that Afghan Investment Co. (incorporated in Virgina until 2010) bribed Afghanistan’s then mining minister to secure a lease on the country’s only cement factory. See Matthew Rosenberg “Grand Jury Investigates Karzai Brother) (Wall Street Journal – Feb. 16th).

If evidence exists that Karzai did indeed violate the FCPA, one can only imagine the political / foreign policy considerations of criminally indicting the brother of the Afghan President. I like to think that the government blindly goes where the evidence leads them, but the BAE and James Giffen enforcement actions suggests that may not always be the case.

To my knowledge, there has never been an FCPA enforcement action involving conduct in Afghanistan.

DOJ Kleptocracy Unit

Joe Palazzolo (Wall Street Journal Corruption Current) recently spoke with several officials involved in the DOJ’s nascent kleptocracy unit. See here [3] for previous discussion and other links regarding the kleptocracy initiative.

Palazzolo reports (here [4]) that the unit will be housed in the DOJ’s Asset Forfeiture and Money Laundering Section and staffed by five lawyers. The FBI’s Asset Forfeiture and Money Laundering Unit will also divert two agents to the new unit. According to the report, “U.S. officials expect that most cases will involve foreign politicians who have left office and are no longer in a position to obstruct investigations.” Palazzolo reports that the unit’s “first major case could be ready in the next month and several more are expected this year.”

Survey Findings

Among the findings in Deloitte and Forbes Insights 4th annual “Look Before You Leap” survey (here [5]) is the following:

“Almost two-thirds (63%) of total survey respondents identified Foreign Corrupt Practices Act (FCPA) and anti-corruption issues that led to an aborted deal or a renegotiation over the past three years. Lack of transparency or unusual payment structures in contracts was cited by one in five and 18% pointed to the use of agents, consultants, distributors, or third parties to obtain or facilitate business.”

The survey results indicate that strategic buyers are more impacted (and perhaps more sensitive to FCPA issues) than financial buyers such as private equity firms and hedge funds.


A good weekend to all.