Scrutiny Alerts
CHS Inc., an agricultural cooperative, disclosed:
“In the fourth quarter of fiscal 2018, we contacted the U.S. Department of Justice and SEC to voluntarily self-disclose potential violations of the FCPA in connection with a small number of reimbursements the Company made to Mexican customs agents in the 2014-2015 time period for payments the customs agents made to Mexican customs officials in connection with inspections of grain crossing the U.S.-Mexican border by railcar. We are fully cooperating with the government, including with the assistance of legal counsel, which assistance includes investigating other areas of potential interest to the government. We are unable at this time to predict when our or the government agencies’ review of these matters will be completed or what regulatory or other outcomes may result.”
Laureate Education
As highlighted here, in December 2016 Laureate Education Inc. disclosed FCPA scrutiny in connection with an $18 million charitable donation in Turkey. Recently, the company disclosed:
“On November 21, 2018, external counsel for Laureate Education, Inc. received a letter from the U.S. Department of Justice (“DOJ”) stating that the DOJ had closed its inquiry into possible violations of the U.S. Foreign Corrupt Practices Act with respect to the matters described below. In the letter, the DOJ acknowledged our voluntary disclosure and full cooperation in its investigation, and the remediation that we have undertaken. The Company previously had received a letter from the Division of Enforcement of the Securities and Exchange Commission (“SEC”) stating that it had concluded its investigation as to the Company with respect to such matters and did not intend to recommend an enforcement action against the Company by the SEC.
As previously disclosed, during the fourth quarter of 2014, we discovered irregularities with respect to a donation by our network institution in Turkey, Istanbul Bilgi University, to a charitable foundation. In June 2016, the Audit Committee of our Board of Directors initiated an internal investigation into this matter with the assistance of external counsel. We voluntarily disclosed the investigation and facts related to the donation to the DOJ and the SEC, and the Company fully cooperated with those agencies in their subsequent inquiry and investigation relating to this matter.”
Rehearing Sought
As highlighted in this recent post, the Third Circuit recently affirmed Dmitrij Harder’s 60 month sentence after pleading guilty to two counts of violating the FCPA for “bribing an official at the European Bank for Reconstruction and Development (EBRD).”
In this recently filed petition for panel rehearing, Harder’s attorneys state:
“The opening and reply briefs filed on behalf of appellant Dmitrij Harder show in detail that the district court denied him a fair hearing at sentencing by preventing his counsel from making legitimate arguments in mitigation of punishment and by refusing to recognize potentially valid grounds for imposing a lesser sentence. The panel’s stated reasons for rejecting these arguments are not responsive to the points advanced in appellant Harder’s briefs. On rehearing, the judgment of sentence must be vacated and the case remanded for further proceedings.”
Ho Trial
Coverage here and here about the beginning of the FCPA and related trial of Chi Ping Patrick Ho.
“Greed motivated a Hong Kong businessman to line the pockets of government officials in two African nations – bribes intended to land lucrative business deals and oil rights for a Chinese energy conglomerate, federal prosecutors told a jury on Monday.
But a defense attorney for Dr. Chi Ping Patrick Ho argued that the multi-million dollar payments were both charitable and aboveboard and that the conglomerate received “nothing in return.” “This is a bribery case with no bribe,” the attorney, Benjamin Rosenberg, said in his opening statement.”
Book Review
Below is what Richard Messick had to say about my new book “Strategies for Minimizing Risk Under the FCPA and Related Laws.”
“[W]hat distinguishes Professor Koehler’s book from many of its competitors is its straightforward, easy to read exposition of what any firm should do to minimize the chances that, thanks to the wayward act of an employee or consultant, it will face allegations it has bribed a government official. In eight tightly-written chapters, he brings his encyclopedic knowledge of FCPA cases, pre-trial settlements of enforcement actions, and the commentary on antibribery law to bear to explain how to develop and implement a sound, reasonable, cost-effective antibribery compliance program. Along the way he chucks the jargon that has grown up around antibribery compliance programs, opting instead for clearly written prose that demystifies rather obscures the process all firms should follow to develop and implement preventive measures.”
[…]
“Professor Koehler has written a book corporate compliance staff and their advisors will want to have in easy reach as they help companies avoid entanglement in the ever growing thicket of antibribery laws.”
The book is available in both hardcover and paperback and can be ordered here.
For the Reading Stack
The Fall 2018 FCPA and Anti-Bribery Alert from Hughes Hubbard & Reed is here.
“I can tell a young person where the mines are, but he’s probably going to step on them anyway.” – Burt Reynolds
The above quote from the late Burt Reynolds could just as easily have been from a dispirited anticorruption compliance professional in 2018. Despite greater awareness, companies and individuals continue to step on the same proverbial anti-corruption mines. Late 2017 through 2018 saw a considerable number of investigations, prosecutions and settlements based on common and wellestablished landmarks of violative conduct: the misuse of third party relationships, abuse of gifts, hospitality, and travel, and failure to properly control hiring. It is clear at this point that just knowing the risks and common mistakes is not sufficient to avoid them. Companies must provide both guidance for avoiding the “mines” and controls to prevent employees from stepping on them.”
The most recent edition of the always informative FCPA Update from Debevoise & Plimpton FCPA is here with an article about the anti-corruption chapter in the United States-Mexico-Canada Agreement (see here for the prior post).
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