Foreign Corrupt Practices Act - Application

Application

Notable cases of the application of FCPA are with Wal-Mart, BAE Systems, Baker Hughes, Daimler AG, Halliburton, KBR, Lucent Technologies, Monsanto, Siemens, Titan Corporation, Triton Energy Limited, Avon Products, and Invision Technologies.

An April 2012 article in The New York Times reported that a former executive of Wal-Mart de Mexico alleged in September 2005 that Wal-Mart de Mexico had paid bribes to officials throughout Mexico in order to obtain construction permits, that Walmart investigators found credible evidence that Mexican and American laws had been broken, and that Walmart executives in the United States "hushed up" the allegations. According to an article in Bloomberg, Walmart's "probe of possible bribery in Mexico may prompt executive departures and steep U.S. government fines if it reveals senior managers knew about the payments and didn't take strong enough action, corporate governance experts said." Eduardo Bohorquez, the director of Transparencia Mexicana, a "watchdog" group in Mexico, urged the Mexican government to investigate the allegations. Wal-Mart and the US Chamber of Commerce had participated in a campaign to amend FCPA; according to proponents, the changes would clarify the law, while according to opponents, the changes would weaken the law.

Former Representative William J. Jefferson, Democrat of Louisiana, was charged with violating this act by bribing African governments for business interests. In 2008, Siemens AG paid a $450 million fine for violating the FCPA. This is one of the largest penalties ever collected by the DOJ for an FCPA case.

The U.S. Justice Department and the Securities and Exchange Commission are currently investigating whether Hewlett Packard Company executives paid about $10.9 million in bribery money between 2004 and 2006 to the Prosecutor General of Russia "to win a €35 million-dollar contract to supply computer equipment throughout Russia." Stronger USDOJ and SEC enforcement increased the prominence of the FCPA from 2010 onwards.

In July 2011, the DOJ opened an inquiry into the News International phone hacking scandal that brought down News of the World, the recently-closed UK tabloid newspaper. In cooperation with the Serious Fraud Office (United Kingdom), the DOJ will examine whether News Corporation violated the FCPA by bribing British Police Officers.

In 2012, Japanese firm Marubeni Corporation paid a criminal penalty of US$54.6 million for FCPA violations when acting as an agent of the TKSJ joint venture, which comprised Technip S.A., Snamprogetti Netherlands B.V., Kellogg Brown & Root Inc. (KBR), and JGC Corporation. Between 1995 and 2004, the joint venture won four contracts in Nigeria worth more than US$6 billion, as a direct result of having paid US$51 million to Marubeni to be used to bribe Nigerian government officials.

Other settlements for FCPA violations in 2012 include Smith & Nephew, who paid US$22.2 million to the DOJ and SEC, and BizJet International Sales and Support Inc., who paid US$11.8 million to the DOJ for bribery of foreign government officials. Both companies entered into a deferred prosecution agreement.

In March 2012, Biomet Inc. paid a criminal fine of US$17.3 million to resolve charges of FCPA violations and US$5.5 million in disgorgement of profits and pre-judgment interest to the SEC.