US-based construction firm Louis Berger International has admitted to bribery and has entered into a deferred prosecution agreement (“DPA”) with the US Department of Justice. Under the terms of the agreement, Louis Berger has agreed to pay a $17.1m fine, implement internal controls to prevent the re-occurrence of bribery and work with a government-appointed compliance monitor for at least three years.
Louis Berger paid bribes to foreign officials in India, Vietnam, Kuwait and Indonesia in order to secure government construction management contracts. From 1998 and 2010, Louis Berger paid bribes to various foreign officials totalling $3.9m. The payments were disguised as “commitment fees”, according to US prosecutors. In addition to the company’s admissions, two of Louis Berger’s former executives, Richard Hirsch and James McClung, have also pleaded guilty to charges of conspiracy and offences under the Foreign Corrupt Practices Act (“FCPA”) for their roles in the bribery scandal.
Louis Berger issued a statement, claiming that the DPA is “the critical final milestone in our reform”. The statement alludes to the fact that the company has undergone a $25m reform effort to establish new policies, controls and systems in an attempt to move the company away from their past wrongdoings. The statement also highlights how Louis Berger has self-discovered and self-reported potential breaches of the FCPA to the US Government since 2010.
With more than half of the Louis Berger’s revenue historically coming from outside of North America, the admission of criminal wrongdoing under the DPA could cause a significant impact on the financial status of the company. This highlights the importance for organisations involved in cross-border transactions to implement and maintain robust anti-bribery and corruption policies.