Suicide of course is not a pleasant topic, but it does occur and occasionally it occurs in connection with bribery and corruption investigations. As highlighted in various media reports, recently Alan García (the two-time former Peruvian president) shot himself in the head during an early morning police raid on his house in connection with allegations that received millions of dollars in bribes from Brazi-based Odebrecht – a company which resolved an FCPA enforcement action in 2016 (see here).
As highlighted in this post, one of the grim stories from the FCPA’s legislative history was the suicide of Eli Black (Chairman of United Brands Co.) who jumped to his death from the 44th floor of his New York City Office tower in February 1975.
According to reports:
“[B]lack was described by associates as having been “under great strain because of business pressures.” The company had incurred heavy losses in Central Amencan banana plantations from last September’s Hurricane Fifi, had undergone new burdens with export taxes on bananas imposed by Central American republics and had sustained losses in its John Morrell & Co. meat‐packing division as a result of increased costs of feeding cattle.”
As highlighted here, in April 1975 (a few years before the FCPA was enacted, but during Congressional deliberations concerning the so-called foreign corporate payments problem):
“The Securities and Exchange Commission charged the United Brands Company … with having paid a bribe of $1.25‐million to Government officials of Honduras to obtain favorable tax treatment on banana shipments from that Central American republic. It further charged the company with having agreed to pay another $1.25‐million.
In a suit filed in Federal District Court in Washington, the S.E.C. also accused the company, a leading producer and marketer of bananas, of having paid $750,000 in bribes to European officials.
The agency’s lawsuit followed a routine inquiry conducted into the affairs of United Brands after Eli M. Black, its chairman and president, took his life last Feb. 3 by jumping from his office on the 44th floor of the Pan Am Building.”
According to this article:
“A week before Black’s suicide, company attorneys had revealed to the federal Securities and Exchange Commission that United Brands had used a Swiss bank account to pay a $1.25 million bribe to the Honduran economics minister in exchange for lower banana tariffs. Black’s guiding hand in the bribe was revealed in the press after he died. The Wall Street wizard had killed himself rather than face shame.”
As noted in this article, in the aftermath of the SEC suit, United Brands issued a statement stating in part:
“The board of directors has learned that, in connection with discussions regarding the export tax on bananas proposed by the Republic of Honduras, in which the company has substantial operations and investments, the company pursuant to the authorization of Mr. E. M. Black, then chief executive of the company, effected a payment to an official of that country of $1.25‐million.
“The payment was made through foreign subsidiaries of the company and was not accurately identified on their books and records. It was part’s of the original understanding with the official concerned that an additional payment of $1.25‐million would be made.
“The board… has determined that this additional payment shall not be made. This action and disclosure … could result in a material reduction in future earnings and a loss of substantial corporate assets which, in turn, could affect the continuity of operations of the company.”
The United Brands enforcement action is of further historical interest in that the State Department was rumored to be the one who tipped off United Brands auditors to the payments. (See here from the Gerald Ford Presidential Library).
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