EXECUTIVE SUMMARY: RECENT DEVELOPMENTS AND TRENDS
Following a first quarter in which neither the United States Department of Justice (DOJ or Justice Department) nor the
Securities and Exchange Commission (SEC or Commission) brought a Foreign Corrupt Practices Act (FCPA) enforcement
action, in 2013 the DOJ and the SEC combined to bring enforcement actions against nine companies (and certain of
their subsidiaries), collecting US$720 million in criminal fines, civil monetary penalties, and disgorgement—including
approximately US$300 million from five companies in the second half of 2013, after the publication of our summer
newsletter. These enforcement actions and other anti-corruption developments in the US, the UK, and around the rest
of the world highlighted ten significant trends:
DOJ And SEC Obtain US$720 Million in FCPA-Related Sanctions in 2013
The US$720 million in criminal fines, civil monetary penalties, and disgorgement obtained by the Justice Department
and the Commission through FCPA enforcement actions amounts to almost three times the US$260 million obtained
in 2012 and is the third highest yearly total ever, trailing only 2010 and 2008.
Two actions resolved in 2013 resulted in sanctions that ranked among the top 10 in the history of FCPA enforcement:
Total S.A.’s US$398 million settlement now ranks fourth all time and Weatherford International’s US$152.6 million
now ranks tenth all time. At the other end of the range, Ralph Lauren Corp. resolved DOJ and SEC enforcement actions
through non-prosecution agreements (NPAs) for a combined US$1.6 million in sanctions.
In terms of the year ahead, 2014 opened with a third top 10 FCPA settlement—Alcoa’s US$384 million settlement now ranks fifth
all time. Furthermore, senior DOJ and SEC officials have stated publicly that a number of FCPA enforcement actions are working
their way through the enforcement “pipeline,” which may result in 2014 being another significant year for FCPA enforcement.
Cooperation Continues to Yield Reduced Sanctions
As in past years, voluntary disclosure of FCPA violations, cooperation with government investigations, and remediation
reportedly resulted in NPAs or deferred prosecution agreements (DPAs) and credit in determining fines and penalties.
For example, the DOJ accepted criminal fines discounted by approximately 30% from the bottom of the United States
Sentencing Guidelines range from three cooperating companies, and it agreed to fines at or close to the bottom of the
Sentencing Guidelines for three other cooperating companies, though what, exactly, differentiates these companies and
the outcomes they received is not entirely clear.
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2007 2008 2009 2010 2011 2012 2013
141
901.5
645.8
1804.2
657
260.6
720.6
0
5
10
15
20
25
2009 2010 2011 2012 2013
1
4
2 3 2
6
5 8
14
5
2
3
5
5
4
DOJ Only DOJ + SEC SEC Only
Global Anti-Corruption Insights | 4
Furthermore, Ralph Lauren’s cooperation with the authorities led to the first ever SEC NPA in an FCPA matter. As discussed
in our Summer 2013 newsletter, Ralph Lauren’s cooperation included (1) an amended anticorruption policy and translation
of the policy into eight languages, (2) enhanced due diligence procedures for third parties, (3) an enhanced commissions
policy, (4) an amended gift policy, and (5) in-person anti-corruption training for certain employees. By contrast, the SEC
penalized Weatherford International US$1.875 million for its lack of cooperation early in the SEC’s investigation. The
underlying misconduct cited in support of the penalty included informing the SEC staff that an employee was missing
or dead when he remained employed by Weatherford, allowing employees to delete emails prior to the imaging of their
computers, and permitting potentially complicit employees to collect documents subpoenaed by the SEC staff.
Hybrid Monitoring Emerges as a Condition of Settlement
In the second half of 2013, the DOJ required compliance monitors in three of the last four FCPA enforcement actions
that it resolved. In each case—Diebold, Inc.; Weatherford International; and Bilfinger SE—the DOJ acknowledged the
company’s cooperation and agreed to a hybrid arrangement—an independent compliance monitor for half the term of
the companies’ DPAs, followed by self-reporting for the other half. The DOJ also imposed hybrid monitoring in two
of the three enforcement actions resolved in 2012 that included monitoring requirements.
In other enforcement actions concluded in 2013, Total agreed to retain a compliance monitor for the full term of its threeyear
DPA. The DOJ did not require compliance monitors in the other three enforcement actions (Parker Drilling Co., Ralph
Lauren Corp., and Archer Daniels Midland), noting the voluntary remediation undertaken by the companies involved.
The emergence of hybrid monitors, as well as cases in which independent monitoring was not required at all, reflects
the DOJ’s credit for companies’ efforts to enhance their compliance programs as part of their remediation.
The DOJ Continues Its Pursuit of Individuals
In addition to pursuing enforcement actions against companies, the DOJ continued its efforts to hold individuals accountable
for violations of the FCPA. The DOJ charged 14 individuals for FCPA and related violations in 2013, obtaining guilty
pleas from eight to date. Charges against the other six defendants are pending, with two cases—one alleging substantive
FCPA violations and money laundering against a former executive of Alstom, S.A. (which has not been the subject of an
FCPA enforcement action) and one alleging obstruction of a grand jury investigation engaged in by a French national—
scheduled for trial in 2014. These prosecutions demonstrate the DOJ’s willingness to pursue, among others, individuals
whose companies are not the subject of enforcement action, foreign citizens, and foreign government officials to whom
the FCPA does not apply but who have been targeted for FCPA-related violations, including money laundering.
Certain Industries Remain a Focus of Enforcement Efforts
While the enforcement actions brought by the DOJ and the SEC in 2013 reached companies in diverse lines of business,
specific industries remain well represented in year-end tallies. Energy companies Parker Drilling, Total, and Weatherford
International and medical device company Stryker joined other members of their industries that have been the subject
of FCPA enforcement. Given the success the DOJ and the SEC have had in targeting specific industries, this industryspecific
focus is unlikely to wane any time soon. Indeed, investigations into a number of pharmaceutical companies
and into financial institutions reportedly remain ongoing.
China Remains a Focus of Enforcement Efforts
The world’s second largest economy continues to be both a source of great opportunity and great risk, with several
companies being sanctioned for their conduct in China in 2013. The DOJ’s and SEC’s parallel enforcement action
against Diebold, and the DOJ’s prosecution of former Maxwell Technologies and former Alstom employees, all
involve conduct that occurred in China. Moreover, the industry-wide investigations into pharmaceutical companies
and financial institutions noted previously all reportedly involve particular business practices prevalent in China. With
Global Anti-Corruption Insights | 5
foreign investment in China growing rapidly year after year, and with China itself beginning to take a greater role in
investigating and prosecuting bribery by foreign corporations, this trend is expected to continue.
US Authorities Team with Foreign Enforcement Officials to Conduct
Multijurisdictional Investigations
Consistent with public pronouncements by senior Justice Department and Commission officials, the DOJ and the SEC
continue to work with their counterparts abroad to investigate potential violations of the FCPA. The DOJ, for example,
received assistance from British, French, and German authorities in connection with its investigations of Parker Drilling,
Total, and Archer Daniels Midland, respectively. This trend continued in early 2014, as the DOJ acknowledged the
cooperation of Swiss, Guernsey, Australian, and British authorities in the DOJ’s investigation of Alcoa.
The SEC Plans to Bring More Enforcement Actions in Administrative Proceedings
At a conference held in November, Kara Brockmeyer, Chief of the SEC Division of Enforcement’s FCPA Unit, stated that
the SEC plans to bring more of their FCPA enforcement actions in SEC administrative proceedings, rather than in federal
court. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank) expanded the SEC’s ability
to obtain civil monetary penalties in SEC administrative proceedings, including in actions taken to enforce the FCPA, and
unlike actions filed in federal court, the settlements of SEC administrative proceedings do not require judicial approval.
While the SEC plans to use administrative proceedings more frequently in the future, to date no clear trend has emerged.
Of the corporate enforcement actions taken by the SEC in 2013 that involved charges being filed (excluding the SEC’s
NPA with Ralph Lauren), four—Parker Drilling, Diebold, Weatherford, and Archer Daniels Midland—were brought
in federal court, the latter two in December. This compares to three actions—Philips Electronics, Total, and Stryker
—brought in SEC administrative proceedings. In 2012, only one of eight corporate SEC enforcement actions was
brought administratively; in 2011, four of thirteen corporate SEC enforcement actions were brought administratively.
UK’s Serious Fraud Office Brings First Bribery Act Prosecution
In the United Kingdom, the Serious Fraud Office (SFO) brought its first bribery case under the Bribery Act and another
case under its predecessor, the Prevention of Corruption Act. Senior SFO officials continued to emphasize in public
statements the agency’s commitment to prosecuting bribery. 2013 ended with a disappointing development for the SFO,
however, when it was forced to dismiss its prosecution of Victor Dahdaleh, an alleged middleman who funneled bribes
in Bahrain, because it was unable to present witnesses to prove its charges.
Anti-Corruption Enforcement Efforts Continue around the World
One of the most significant developments in recent years may well be the evolution of anti-corruption efforts by countries
other than the US and UK. While still in their nascent stages, these efforts indicate a growing seriousness by countries
to hold companies and individuals accountable for corruption and bribery. Germany and Switzerland, for example,
have both become key players and are likely to remain so.
Of particular note, new anti-corruption efforts are being undertaken by emerging market countries that are considered
especially prone to corruption. The BRIC countries—Brazil, Russia, India, and China—have all recently enacted
more stringent anti-corruption laws and have begun taking tentative steps to enforce them. Xi Jinping, the president of
China, for example, vowed at the beginning of 2013 to crack down on what he termed “tigers” and “flies”—the most
and least powerful—in a nationwide anti-corruption drive. It remains to be seen just how vigorously these countries
actually investigate and prosecute corruption.
We analyze these trends, focusing on developments from the second half of 2013, and more in this edition of Arnold
& Porter’s Global Anti-Corruption Insights.
Global Anti-Corruption Insights | 6
KEY ENFORCEMENT AND INVESTIGATIVE DEVELOPMENTS
Global Anti-Corruption Insights | 7
Notable Corporate FCPA Enforcement
Actions Resolved by the Justice
Department and/or SEC
Alcoa Resolves Charges of Criminal and
Civil FCPA Violations
On January 8, 2014, Alcoa World Alumina LLC
(Alcoa World), which is controlled by US-based
aluminum producer Alcoa, Inc. (Alcoa), pled guilty
in a Pennsylvania federal court to violating the FCPA’s
anti-bribery provision. Alcoa World agreed to pay the
DOJ US$209 million in criminal fines and to forfeit
US$14 million to resolve charges that it paid millions
of dollars in illicit payments to officials in the Kingdom
of Bahrain through a middleman in London.1 Alcoa
agreed to pay the SEC an additional US$161 million in
disgorgement—US$175 million less the US$14 million
forfeiture to the DOJ—to resolve civil violations of the
FCPA’s anti-bribery, books and records, and internal
controls provisions.2
Alcoa World’s criminal fine is less than half of the
bottom of the fine range calculated under the Sentencing
Guidelines (US$446 million). The DOJ agreed that this
reduced fine was appropriate in light of such factors as
the financial condition of Alcoa; the remedies imposed
on Alcoa by the SEC; Alcoa’s substantial cooperation
with the DOJ, including making employees available
for interviews and collecting, analyzing, and organizing
information for the DOJ; and remedial efforts undertaken
by Alcoa, including hiring new legal and ethics
compliance officers and implementing enhanced due
diligence reviews of third-party consultants.3 The total
settlement amount of US$384 million is the fifth largest
FCPA settlement of all time.
US authorities have been investigating Alcoa’s business
dealings with Aluminum Bahrain B.S.C. (Alba), a statecontrolled
aluminum smelting company, since at least
2008. The investigation came on the heels of a private
lawsuit that Alba filed against Alcoa in Pennsylvania
federal court seeking US$1 billion in damages from
Alba’s overpayment for raw materials as a result of
Alcoa’s alleged bribery—which, Alba asserted, violated
the Racketeer Influenced and Corrupt Organizations Act
(RICO). In October 2012, after four years of litigation,
Alcoa paid US$85 million to settle this suit.4
According to the DOJ and the SEC, Alcoa subsidiaries
agreed to use a London-based middleman with “close
ties” to certain members of Bahrain’s royal family in
order to obtain long-term alumina supply agreements
with Alba. Through this middleman, his shell companies,
and his offshore bank accounts, the subsidiaries funneled
kickbacks to government officials with influence over
Alba’s contracting decisions. As part of its guilty plea,
Alcoa World admitted to securing long-term supply
agreements by causing Alcoa’s Australian subsidiary
to enter into a sham distributorship with various shell
companies owned by the middleman, who, from 2005 to
2009, marked up the price of alumina by approximately
US$188 million. In its court filings, the DOJ alleged that
the middleman used this money to make tens of millions
of dollars in illicit payments. In its administrative ceaseand-
desist order, the SEC made findings that Alcoa failed
to conduct due diligence to determine whether there was
a legitimate business purpose for using the middleman.5
Although neither the DOJ nor the SEC named the
middleman, he is reported to be billionaire Victor
Dahdaleh, whom British authorities charged with paying
bribes to former Alba managers in connection with supply
agreements.6 As we discuss in Section III.A.1 below, the
SFO’s prosecution of Dahdaleh ended in dismissal in
December 2013 after one witness changed his testimony
and two other witnesses declined to appear.
KEY ENFORCEMENT AND INVESTIGATIVE DEVELOPMENTS
Global Anti-Corruption Insights | 8
The DOJ acknowledged the assistance of foreign
enforcement authorities including the SFO, the Office
of the Attorney General of Switzerland, the Guernsey
Financial Intelligence Service, and the Australian
Federal Police.7 The SEC also acknowledged the
assistance of the Office of the Attorney General of
Switzerland and the Australian Federal Police, as well
as the assistance of foreign authorities including the
Ontario Securities Commission, the Guernsey Financial
Services Commission, and the United Kingdom
Financial Control Authority.8
Archer Daniels Midland Pays More than
US$54 Million to Resolve Parallel DOJ
and SEC Enforcement Actions
On December 20, 2013, the DOJ and the SEC announced
the resolution of parallel enforcement actions against
Archer Daniels Midland Company (ADM), a global
food processor based in Decatur, Illinois, and a subsidiary
involving allegations of FCPA violations.9 The DOJ and
the SEC alleged in actions filed in the US District Court
for the Central District of Illinois that ADM subsidiaries
paid roughly US$22 million to two vendors to pass on
bribes to Ukrainian government officials between 2002
and 2008 as part of a scheme to obtain over US$100
million in value-added tax (VAT) refunds, and that ADM
failed to implement policies and procedures sufficient to
prevent these bribes.
According to the SEC’s Complaint, Ukraine imposed
a 20 percent VAT on goods purchased in country, but
exporters could apply for a refund of the VAT already paid
on exported goods.10 At times, however, the Ukrainian
government delayed paying VAT refunds it owed or did
not make any refund payments at all.11 The SEC alleged
that in order to receive VAT refunds, between 2002 and
2008, two subsidiaries of ADM, Alfred C. Toepfer
International Ukraine Limited (ACTI Ukraine) and
Alfred C. Toepfer, International G.m.b.H. (ACTI
Hamburg), “made improper payments, which were
generally 18-20% of the corresponding VAT refunds, to
two third-party vendors so that they could pass on nearly
all of the money to Ukrainian government officials … .”12
In total, the two subsidiaries paid approximately US$22
million to obtain over US$100 million in VAT refunds,
resulting in a benefit to the subsidiaries of approximately
US$33 million.13 These payments were recorded by the
subsidiaries in their books and records as insurance
premiums and other business expenses.14 The SEC’s
Complaint alleges that the subsidiaries’ misconduct
went unchecked by ADM for several years because of its
“insufficient” system of FCPA oversight.15 According to
the DOJ, “concerns were expressed to ADM executives,
including an email calling into question potentially illegal
‘donations’ by ACTI Ukraine and ACTI Hamburg to
recover the VAT refunds, yet [ADM] nonetheless failed
to implement sufficient anti-bribery compliance policies
and procedures.”16
To settle the DOJ’s charges, ACTI Ukraine pleaded guilty
to one count of conspiracy to violate the anti-bribery
provisions of the FCPA and agreed to pay a US$17.8
million criminal fine.17 The criminal fine amount reflects
an approximately 30% reduction from the bottom of the
fine range calculated under the Sentencing Guidelines as
well as a US$1.3 million deduction commensurate with the
fine imposed by German authorities on ACTI Hamburg,
in recognition of ACTI Ukraine’s “timely, voluntary,
and thorough disclosure of the conduct,” its cooperation
with the DOJ, and its “early, extensive, and unsolicited
remedial efforts.”18
ADM entered into an NPA with the DOJ “in connection
with the company’s failure to implement an adequate
system of internal financial controls to address the making
of improper payments both in Ukraine and by an ADM
joint venture in Venezuela.”19 In its press release, the
DOJ acknowledges ADM’s voluntary disclosure of the
conduct at issue and its extensive cooperation with the
DOJ, “including conducting a world-wide risk assessment
and corresponding global internal investigation, making
numerous presentations to the department on the status
and findings of the internal investigation, voluntarily
making current and former employees available for
interviews, and compiling relevant documents by category
for the department; and ADM’s early and extensive
remedial efforts.”20
To settle the SEC’s charges, ADM consented to the
entry of a final judgment ordering the company to pay
disgorgement of approximately US$33.3 million plus
prejudgment interest of US$3.1 million.21 The final
judgment, which is subject to court approval, also requires
ADM to report on its FCPA compliance efforts for a threeyear
period. Like the DOJ, the SEC took into account
Global Anti-Corruption Insights | 9
ADM’s cooperation and significant remedial measures,
“including self-reporting the matter, implementing a
comprehensive new compliance program throughout its
operations, and terminating employees involved in the
misconduct.”22
The DOJ’s Press Release acknowledged the cooperation
and assistance of German law enforcement authorities,
who reached a separate resolution with ACTI Hamburg
regarding its role in the scheme.23
Bilfinger Resolves Criminal FCPA
Enforcement Action by Paying
US$32 Million Fine
On December 9 and 11, 2013, the FBI and the DOJ
announced the resolution of their investigation into
Bilfinger SE (Bilfinger), an international engineering
firm based in Mannheim, Germany, through a three-year
DPA.24 Bilfinger agreed to pay a US$32 million penalty
to resolve charges that it violated the FCPA by bribing
government officials in Nigeria to obtain and retain
contracts related to the Eastern Gas Gathering System
(EGGS) project, which was valued at approximately
US$387 million.25
According to the three-count criminal information
filed by the DOJ in the US District Court for the
Southern District of Texas, from late 2003 through June
2005, Bilfinger conspired with Willbros Group Inc.
(Willbros) and others to pay more than US$6 million
in bribes to Nigerian government officials to obtain
and retain contracts related to the EGGS project.26 The
government alleged that Bilfinger and Willbros formed
a joint venture consortium and agreed to inflate the
price of their bid on the EGGS project by three percent
to cover the cost of paying bribes to Nigerian officials.27
The conspirators referred to the bribes paid to Nigerian
officials as “landscaping” payments or “commitments,”
and Bilfinger employees used money that was mailed
or flown from Germany to Nigeria to pay the bribes.28
“When Willbros employees encountered difficulty
obtaining enough money to make their share of promised
bribe payments, Bilfinger loaned Willbros US$1 million”
to pay some of the promised bribes.29
Bilfinger’s US$32 million fine falls within the US$28 -
US$56 million fine range calculated under the Sentencing
Guidelines and takes into account the company’s
cooperation and remediation. Under the terms of the
DPA, Bilfinger also agreed to continue cooperating fully
with the Justice Department, continue to implement a
compliance and ethics program, implement rigorous
internal controls, and retain an independent compliance
monitor for at least 18 months.30
The Bilfinger enforcement action is the latest in a series
of actions the DOJ has filed in connection with the
EGGS project. In May 2008, Willbros and its subsidiary
Willbros International Inc. entered into a DPA related
to the EGGS Project (as well as a separate issue in
Ecuador) that required them to pay a US$22 million
criminal penalty.31 The terms of the Willbros DPA were
satisfied in 2012.
Global Anti-Corruption Insights | 10
In addition, three former Willbros executives and a former
Willbros consultant were charged for their participation
in the conspiracy:
In September 2006, former Willbros executive Jim
Bob Brown pleaded guilty to one count of conspiracy
to violate the FCPA in connection with the EGGS
project.32 He was sentenced on January 28, 2010,
to one year and one day in prison, two years of
supervised release, and a US$17,500 fine.33
In November 2007, former Willbros executive Jason
Steph pleaded guilty to one count of conspiracy
to violate the FCPA in connection with the EGGS
project.34 He was sentenced on January 28, 2010, to
15 months in prison, two years of supervised release,
and a US$2,000 fine.35
In January 2008, former Willbros executive Kenneth
Tillery and Willbros consultant Paul Novak were
charged with conspiring to violate the FCPA antibribery
provisions, violating the FCPA anti-bribery
provisions, and conspiring to launder the payments
used to violate the FCPA’s anti-bribery provisions, in
connection with the EGGS project.36 Novak pleaded
guilty to one count of conspiracy to violate the FCPA
and one substantive count of violating the FCPA and
was sentenced to serve 15 months in prison, two
years of supervised release, and a US$1 million fine.37
Tillery remains a fugitive.38
It remains to be seen whether the DOJ (or the SEC) will
pursue charges against individual Bilfinger employees.
Weatherford International Pays Over
US$150 Million to Resolve Parallel DOJ
and SEC Enforcement Actions
On November 26, 2013, Weatherford International
(Weatherford), a Swiss-based oilfield services company
with significant operations in Houston, Texas, and its
subsidiaries resolved parallel enforcement actions
brought by the DOJ and the SEC based on allegations
that the company failed to implement an effective
system of controls to prevent officials at Weatherford
subsidiaries from providing “bribes and improper
travel and entertainment for foreign officials in the
Middle East and Africa to win business, including
kickbacks in Iraq to obtain United Nations Oil-for-
Food contracts.”39
The DOJ alleged that Weatherford “knowingly failed to
establish effective corruption-related internal accounting
controls designed to detect and prevent corruption-related
violations, including FCPA violations.”40 For example, due
to Weatherford’s failure to implement effective internal
controls, subsidiary Weatherford Services Limited
(Weatherford Services) allegedly retained a freightforwarding
and logistics services company in 2006 to pay
bribes to an official in Africa to approve the renewal of an
oil services contract with a non-governmental entity, and it
set up a joint venture with two local entities controlled by
foreign officials and their relatives for the “sole purpose”
of “funnel[ing] hundreds of thousands of dollars to the
foreign officials.”41 Further, from 2005 through 2011,
employees of the Weatherford Oil Tools Middle East
Limited subsidiary gave improper “volume discounts” to
a distributor, believing the distributor was creating a more
than US$11.8 million “slush fund” for bribe payments.42
Weatherford allegedly realized over US$50 million in
profits from business obtained through the use of illicit
payments in Africa and the Middle East.43
To settle the FCPA charges, Weatherford Services pleaded
guilty to violating the anti-bribery provisions of the
FCPA.44 In addition, Weatherford agreed to pay US$152.8
million to the US government—(1) US$87.2 million in
criminal fines to the DOJ pursuant to a DPA involving one
count of violating the accounting provisions of the FCPA,
which is the bottom of the fine range calculated under
the Sentencing Guidelines and (2) US$65.6 million in
disgorgement, prejudgment interest, and civil penalties to
the SEC, which includes “a $1.875 million penalty assessed
in part for lack of cooperation early in the investigation.”45
Weatherford’s combined monetary settlement ranks as
the ninth highest in the history of FCPA enforcement. As
part of the settlement, Weatherford also agreed to cease
and desist from violating the anti-bribery and accounting
provisions of the FCPA, to retain an independent corporate
compliance monitor for a period of 18 months, and to selfreport
to the SEC for an additional 18 months.
At the same time the DOJ resolved the FCPA charges,
Weatherford also resolved an investigation conducted
by the DOJ, the Department of Commerce’s Bureau of
Industry and Security, and the Department of Treasury’s
Office of Foreign Assets Control. Pursuant to that
settlement, Weatherford and four of its subsidiaries
also agreed to pay a combined US$100 million to
Global Anti-Corruption Insights | 11
resolve potential criminal and administrative export
controls charges concerning potential violations of the
International Emergency Economic Powers Act (IEEPA)
and the Trading With the Enemy Act (TWEA).46
Stryker Corporation Settles SEC
Charges with US $13.2 Million Penalty
The SEC announced on October 24, 2013, the resolution
of its investigation into Stryker Corporation (Stryker),
a Michigan-based medical technology company, through
an order instituting settled administrative proceedings.
Without admitting or denying the findings in the SEC’s
Order, Stryker agreed to pay more than US$13.2 million
in disgorgement, prejudgment interest, and penalties.47
According to the SEC, from approximately August 2003 to
February 2008, employees of Stryker’s subsidiaries made
hundreds of improper payments totaling approximately
US$2.2 million to various government officials in Mexico,
Poland, Romania, Argentina, and Greece in order to win or
keep the right to sell medical products to public hospitals.48
Stryker reportedly earned approximately US$7.5 million
in illicit profits as a result of these payments.49 For example,
the SEC found that in 2006, Stryker’s Mexican subsidiary
directed a law firm to pay approximately US$46,000 to
a Mexican government employee in order to secure the
winning bid on a contract that resulted in US$1.1 million
in profits for Stryker.50 Similarly, the SEC found that in
2007, Stryker’s subsidiary in Greece made a purported
“donation” of approximately US$200,000 to a public
university to fund a laboratory and, in exchange for
the payment, a public hospital doctor agreed to provide
business to Stryker.51
The SEC also found that Stryker’s subsidiaries bribed
a foreign official by paying for trips that lacked any
legitimate business purpose. Specifically, the SEC found
that in May 2004, Stryker paid travel costs totaling
approximately US$7,000, including a six-night stay at a
New York City hotel, two Broadway shows, and a five-day
trip to Aruba, for the director of a public hospital in Poland
and her husband. In exchange for payment of these travel
expenses, the director promised Stryker future business.52
The SEC also found that between 2005 and 2008, Stryker’s
Argentine subsidiary made 392 “honoraria” payments
totaling close to US$1 million to “physicians employed
in the public healthcare system in order to obtain or retain
business with affiliated public hospitals.” Unlike traditional
honorarium payments made for a service such as making
a speech, the SEC alleged that “these honoraria were
commissions that were calculated as a percentage (typically
20 to 25 percent) of a total sale to a particular hospital and
then paid to the doctor associated with the sale.”53
In its Order, the SEC noted Stryker’s cooperative response
to the investigation and the remedial measures Stryker
implemented, which included (1) retaining outside counsel
to conduct an internal investigation; (2) implementing a
company-wide anti-corruption compliance program; and
(3) engaging a third-party consultant to perform FCPA
compliance assessments and compile written reports for
Stryker’s operations across the world at least annually.54
The SEC’s Order noted that Stryker “has demonstrated
a commitment to designing and funding a meaningful
compliance program in order to prevent and detect violations
of the FCPA and other applicable anti-bribery laws.”55
Stryker first disclosed in 2007 that the SEC and the DOJ
had made inquiries regarding possible FCPA violations.56
Stryker’s director of communications has said that the
DOJ has advised the company that the Department’s
investigation is closed.57
Diebold Agrees to Pay US$48 Million
to Resolve Parallel DOJ and SEC
Enforcement Actions
On October 22, 2013, the DOJ and the SEC announced
that Diebold, Inc. (Diebold) had resolved charges of
FCPA offenses based upon the conduct of Diebold’s
subsidiaries in China, Indonesia, and Russia.58 The
resolution consists of (a) a three-year DPA with the DOJ
based upon allegations of violations of the FCPA’s books
and records provisions and conspiracy to violate the
FCPA’s anti-bribery and books and records provisions,
and (b) entry of a permanent injunction against future
violations of the FCPA’s anti-bribery, books and records,
and internal controls provisions. Diebold also agreed to
retain an independent compliance monitor for at least 18
months, and to pay a US$25.2 million penalty to the DOJ
and US$22.97 million in disgorgement and pre-judgment
interest to the SEC.
The DPA acknowledges Diebold’s voluntary disclosure of
the matter, “extensive internal investigation,” commitment
to enhancing its compliance program and internal controls,
Global Anti-Corruption Insights | 12
and agreement to continue to cooperate with the DOJ
in any ongoing investigation of company officers and
employees.59 In this regard, the US$25.2 million fine
reflects a 30% discount from the bottom of the fine range
calculated under the Sentencing Guidelines.60 On the
other hand, the DPA also states that, with respect to the
need for an independent monitor, “in light of the specific
facts and circumstances of this case and the Company’s
recent history, including a previous accounting fraud
enforcement action by the Securities and Exchange
Commission, the Department believes that the Company’s
remediation is not sufficient to address and reduce the risk
of recurrence of the Company’s misconduct and warrants
the retention of an independent corporate monitor.”61
The Ohio-based provider of ATMs and bank security
systems was charged with making approximately US$3
million in payments in China, Indonesia, and Russia from
2005 to 2010 to win contracts with government-owned and
government-controlled banks in China and Indonesia and
private banks in Russia. In China, for example, Diebold
provided bank officials with lavish overseas vacations,
including trips to Europe, the Grand Canyon, Las Vegas,
Napa Valley, Disneyland, and “other popular tourist
destinations.”62
In Russia, the recipients of the bribes were not government
officials but were employed at privately owned banks, and
the bribes, paid through a distributor, were for contracts for
the sale of ATMs to those private banks.63 In conjunction
with this conduct, Diebold was charged with violating
the FCPA’s accounting provisions by falsely recording
the contracts with the distributor as legitimate business
expenses when, in fact, they were used to funnel the bribes
to the private banks.64
The use of the FCPA’s accounting provisions to punish
Diebold’s commercial, as opposed to public, bribery
comports with recent guidance from the US enforcement
agencies. The DOJ’s and SEC’s jointly issued Resource
Guide, for example, warns that “commercial[] bribery may
still violate the FCPA’s accounting provisions, the Travel
Act, anti-money laundering laws, and other federal or
foreign laws” and that “[a]ny type of corrupt payment thus
carries a risk of prosecution.”65 More recently, SEC FCPA
Unit Chief Kara Brockmeyer, speaking to the American
Conference Institute’s 30th International Conference on
the FCPA on November 19, 2013, confirmed that the SEC
would use the FCPA’s accounting provisions to pursue
charges against companies for commercial bribery.66
Justice Department and SEC
Enforcement Actions against Individuals
for Violations of the FCPA
Two Former Oil Executives Charged;
Former General Counsel Pleads Guilty
in Bribery Scheme
Two former chief executive officers of PetroTiger Ltd.—a
British Virgin Islands oil-and-gas company with offices
in New Jersey—have been charged for their alleged roles
in a scheme to bribe Colombian government officials in
exchange for a lucrative oil services contract. Former CEO
Knut Hammarskjold was arrested on November 20,
2013, at Newark Liberty International Airport, and former
CEO Joseph Sigelman was arrested on January 3, 2014
in the Philippines, then brought before a US Magistrate
Judge in Guam. Furthermore, PetroTiger’s former general
counsel, Gregory Weisman, pled guilty on November 8,
2013 to a criminal information charging one count of
conspiracy to violate the FCPA and to commit wire fraud
in connection with the bribery scheme.67
According to the DOJ, the defendants attempted to
make payments to the bank account of a Colombian
government official’s wife for consulting services she did
not provide. When this attempt failed because of incorrect
account information, the defendants allegedly transferred
approximately US$333,500 from PetroTiger’s US bank
Global Anti-Corruption Insights | 13
account directly to the foreign official’s bank account
in Colombia. The payments purportedly were for the
official’s assistance in securing approval from Ecopetral
SA, Colombia’s state oil company, for a roughly US$39.6
million oil services contract with PetroTiger.68
The DOJ also has accused the defendants of attempting to
defraud PetroTiger board members who were helping fund
an acquisition that the defendants negotiated on behalf
of PetroTiger. In exchange for kickbacks, the defendants
agreed to PetroTiger paying a higher purchase price. The
kickbacks allegedly were diverted to Sigelman’s bank
account in the Philippines and concealed through a side
letter purporting to justify the payments. As a result
of these allegations, Sigelman and Hammarskjold now
face charges for conspiracy to commit wire fraud and
to launder money, in addition to FCPA-related charges.69
In announcing these charges, the DOJ noted that it received
significant assistance from Colombian law enforcement
officials.70 It also thanked the Republic of the Philippines,
including the Bureau of Immigration, for its assistance.
Former Maxwell Technologies
Executive Indicted
Alain Riedo, a citizen of Switzerland, was indicted on
October 15, 2013 in the United States District Court for the
Southern District of California on charges of conspiracy to
violate the FCPA and substantive violations of the FCPA’s
anti-bribery, books and records, and internal controls
provisions.71 Riedo is a former General Manager and
Senior Vice President of Maxwell Technologies S.A., a
wholly owned subsidiary of Switzerland-based Maxwell
Technologies, and his indictment is based on the same
conduct in China that resulted in Maxwell’s January 2011
parallel DOJ and SEC FCPA enforcement actions.72
According to the indictment, Riedo conspired with
others to make corrupt payments to Chinese government
officials “in order to obtain and retain business, prestige
and increased compensation,” and to secure the officials’
assistance in obtaining contracts for the sale of Maxwell
Technologies’ high voltage capacitor products to stateowned
manufacturers of electrical-utility infrastructure.73
Riedo and a co-conspirator engaged an agent to sell
Maxwell’s products to Chinese consumers, including
state-owned entities. That agent “would and did ensure
that the quotes [obtained from Maxwell Technologies S.A.]
contained a secret mark-up of approximately 20 percent,
resulting in a higher total price to the Chinese customers for
Maxwell S.A.’s equipment,” which the agent then corruptly
paid to employees at state-owned enterprises.74 Riedo and
another individual caused Maxwell S.A.’s books and records
to “falsely record the ‘extra amount’ bribe payments as
commissions, sales expenses, or consulting fees.”75
Riedo is currently a fugitive and a warrant for his arrest
has been issued.
Four Individuals Enter Guilty Pleas in
Broker-Dealer Scheme
Federal authorities have secured convictions against
four individuals affiliated with Direct Access Partners
LLC (DAP), a now-defunct broker-dealer that was
headquartered in New York, for their roles in a scheme
to bribe officials at two state-owned banks in Venezuela.
On August 30, 2013, the DOJ announced that Tomas
Alberto Clarke Bethancourt (known as Tomas Clarke),
Jose Alejandro Hurtado, and Ernesto Lujan—former
DAP executives based in Miami—had each pled guilty
to charges of conspiracy, money laundering, violating the
Travel Act, and violating the FCPA. These three defendants
admitted to paying over US$5 million in bribes to officials
at Venezuelan state-owned banks in order to steer bond
trading business to DAP. They concealed their scheme by
using intermediary corporations and offshore accounts
in Switzerland. Clarke and Lujan have been granted bail
on the condition that each post a US$1.5 million bond
pending sentencing in February 2014. Clarke and Lujan are
scheduled to be sentenced in February 2014, and Hurtado
is scheduled to be sentenced in October 2014.76
In addition, on November 18, 2003, Maria de Los Angeles
Gonzalez De Hernandez (Gonzalez), a former official
at Venezuela’s state development bank, pled guilty to
conspiracy, money laundering, and Travel Act charges
for directing over US$60 million in business to DAP in
exchange for illicit payments.77 Gonzalez is scheduled
to be sentenced on August 15, 2014.78 She is reportedly
cooperating with authorities.
As reported in our Summer 2013 newsletter, the SEC
has brought non-FCPA fraud charges against Clarke
and Hurtado, as well as against Haydee Leticia Pabon,
Hurtado’s wife, and Iuri Rodolfo Bethancourt, an
apparent relative of Clarke.79 The DOJ also has filed a
Global Anti-Corruption Insights | 14
civil action seeking the forfeiture of assets held in bank
accounts associated with the scheme and the forfeiture of
properties in the Miami area that were purchased using
proceeds generated from the scheme.
The federal investigation of DAP reportedly began with
a periodic examination of the broker-dealer by the SEC.80
Justice Department Prosecution of
Four Current or Former Alstom
Employees Continues
As we previously reported in our Summer 2013 newsletter,
on April 16, 2013, the DOJ announced the unsealing of
FCPA charges filed in Connecticut federal court against
Frederic Pierucci and David Rothschild, a current and a
former executive of the Connecticut-based US subsidiary
of Alstom, S.A. (Alstom), a French transportation
infrastructure and power generation company.81 Pierucci
and Rothschild pled guilty.82
The DOJ brought additional charges against two more
former Alstom executives, William Pomponi on April
30, 2013 and Lawrence Hoskins on July 30, 2013,
respectively.83 The DOJ has charged that Pomponi and
Hoskins, along with Pierucci and Rothschild, participated
in the payment of bribes to Indonesian officials—including
a member of the Indonesian Parliament and high-ranking
officials of the Perusahaan Listrik Negara, a state-owned
and -controlled electricity company—for assistance in
securing a US$118 million contract known as the “Tarahan
Project” to provide power-related services in Indonesia.84
The defendants allegedly attempted to conceal the bribes
by funneling payments through two consultants.
On October 8, 2013, Pomponi filed various discovery
motions asking the government to disclose, among
other items, any evidence bearing on knowledge, intent,
absence of mistake, and modus operandi under Rule
404(b) of the Federal Rules of Evidence.85 In response,
the government indicated that it might introduce evidence
relating to corrupt payments made in China and India
during the course of the trial.86 Examples of this evidence
include (1) expense reports allegedly demonstrating
large entertainment costs in connection with Indian and
Chinese officials and (2) emails allegedly demonstrating
that improper payments were made to Indian officials
and executives from Sinopec Ltd., the state-run Chinese
energy company.87 On November 8, 2013, Pomponi also
moved to postpone the trial until September 2014, citing
the amount of documents that it needs to review prior
to trial—at least 1,013,033 documents and 50 hours of
recordings—as the reason for the requested continuance.88
By order dated November 21, 2013, United States District
Judge Janet Bond Arterton granted Pomponi’s motion
for disclosure of Rule 404(b) evidence and scheduled the
commencement of trial for June 16, 2014.89
Alstom has been the subject of multiple allegations of
bribery. Investigations either have been closed or are still
ongoing in Switzerland and the United Kingdom,90 and
more recently, in August 2013, a Brazilian newspaper
reported that Alstom’s French subsidiary had “paid
millions of dollars in bribes to secure lucrative contracts
in Sao Paulo state in 1998” and that “Alstom executives
were among 10 people facing charges.”91 This report
comes approximately five years after Brazilian federal
prosecutors, as well as French and Swiss authorities,
investigated Alstom for allegedly paying bribes to secure
contracts between 1995 and 2003. One incident, reported
by the press at the time, was an alleged bribe of US$6.8
million to secure a US$45 million contract for extending
the Sao Paulo metro. The federal police documents
state that the “Swiss authorities seized €7.5 million in
bribe money from a joint account in the name of [ ]
two officials linked to the Sao Paulo state government
and to the Brazilian Social Democratic Party”—Jorge
Fagali Neto and Jose Geraldo Villas Boas. Fagali has
been “charged with money laundering, tax evasion, and
racketeering, while Alstom officials have been charged
with active corruption, money laundering, tax evasion,
and racketeering.” Alstom did not comment on the
bribery allegations.
Trial Scheduled for French National
Facing Obstruction of Justice Charges
Relating to FCPA Probe
Frederic Cilins, the French national who was arrested
on April 14, 2013 for allegedly obstructing a grand jury’s
investigation of potential FCPA and money-laundering
violations, is currently scheduled to go to trial in federal
court in New York on March 31, 2014. According to the
DOJ, Cilins offered to pay a cooperating witness US$5
million to destroy copies of contracts reflecting a mining
company’s agreement to pay millions of dollars in bribes
to former government officials of the Republic of Guinea
Global Anti-Corruption Insights | 15
in exchange for valuable mining concessions in that
country’s Simandou Region. Prosecutors have identified
their cooperating witness as Mamadie Toure, the fourth
wife of deceased Guinean dictator Lansana Conte, who
awarded the mining rights to BSG Resources Ltd. (BSG)
in 2008.92 Cilins pled not guilty and has challenged the
authenticity of the alleged contracts.93
BSG reportedly is subject to ongoing investigations in a
number of jurisdictions. In August, Swiss police searched
the Geneva offices of Onyx Financial Advisors, a company
that provides management services for BSG, while French
police searched the home of a director of the management
firm. These coordinated raids were allegedly carried out
at the request of US and Guinean authorities.94
Judge Denies Former Magyar Executives’
Request for Interlocutory Appeal
As we have previously reported, on February 8, 2013, Judge
Richard Sullivan of the Southern District of New York
denied a motion to dismiss an SEC lawsuit filed by three
former executives from the Hungarian telecommunications
company Magyar Telekom (Magyar)—Elek Straub
(former Chairman and CEO), Andras Balogh (former
Director of Central Strategic Organization), and Tamas
Morvai (former Director of Business Development
and Acquisitions)—charged with scheming to bribe
government officials in Macedonia and Montenegro.95 The
three defendants, all foreign nationals who worked and
lived outside the US when the alleged bribery took place,
had argued in their motion that the court lacked personal
jurisdiction over them, the SEC’s action was time-barred
by the applicable statute of limitations, and their conduct
lacked a sufficient nexus with the US to satisfy the FCPA’s
jurisdictional requirement.96
After Judge Sullivan denied their motion to dismiss, the
defendants asked the court to certify an interlocutory
appeal of its order.97 Judge Sullivan denied this motion as
well on August 5, 2013, disagreeing with the defendants
that a “substantial ground for difference of opinion exists
[on the legal issues] … or that an interlocutory appeal is
likely to result in reversal by the Second Circuit and thus
termination of [the] litigation.”98
The judge noted that his decision to deny the defendants’
motion to dismiss was not inconsistent with a decision
from Judge Shira Scheindlin, also of the Southern District
of New York, in a similar case decided just a few weeks
later. In that case, Judge Scheindlin granted a former
Siemens executive’s motion to dismiss SEC charges that
he had violated the FCPA, holding that the defendant did
not have the necessary minimum contacts with the US
to establish personal jurisdiction: he neither authorized
the bribe, directed, or was even aware of the cover-up,
nor played any role in the falsification of SEC filings.99
Both judges agreed that “there is ample (and growing)
support in case law for the exercise of jurisdiction over
individuals who played a role in falsifying or manipulating
financial statements relied upon by U.S. investors in order
to cover up illegal actions directed entirely at a foreign
jurisdiction.”100 In the Straub case, according to Judge
Sullivan, since the SEC alleged that the defendants had
signed off on misleading management representation
letters and signed SEC filings as part of the bribery
scheme, the SEC had made a prima facie showing of
jurisdiction.101
Defendants also raised statute of limitations and FCPA
jurisdictional arguments in support of their request that the
judge certify the interlocutory appeal, but Judge Sullivan
rejected them, holding that even a reversal by the Second
Circuit on both of these issues would not entirely dispose
of the case, nor would the scope of discovery and length
of trial be significantly reduced because the SEC had also
alleged three counts of books and records violations.102
SEC Obtains Default Judgments against
Two Former Siemens Executives
The SEC has obtained a default judgment against two
former employees of Siemens AG—Ulrich Bock
(Commercial head of Major Projects for Siemens Business
Services from 1995 to 2001) and Stephan Signer (Bock’s
successor as head of Major Projects).103 The two German
nationals have not appeared in connection with the SEC’s
case against them relating to bribes paid in Argentina,
despite service by publication in the International Herald
Tribune and by mail delivered to their German counsel.
The judgment enjoins the two from violating the FCPA,
and it orders Signer to pay a civil penalty of US$524,000
and Bock to pay a civil penalty in the same amount plus
US$316,452 in disgorgement and US$97,505, for a total
of US$937,957.
The SEC also reached a settlement with a third former
Siemens employee, Andres Truppel, to resolve the
Global Anti-Corruption Insights | 16
SEC’s FCPA claims against him for a civil penalty of
US$80,000,104 and voluntarily dismissed charges against
a fourth defendant, Carlos Sergi.105
Eleventh Circuit Hears Oral Argument
on Who Is a “Foreign Official” under
the FCPA
On October 11, 2013, a three-judge panel of the U.S. Court
of Appeals for the Eleventh Circuit in Miami heard oral
argument in the appeal brought by Joel Esquenazi and
Carlos Rodriguez, former executives of Florida-based
Terra Telecommunications Corp. The two defendants
are challenging their convictions on the ground that
Telecommunications D’Haiti S.A.M. (Haiti Teleco) is
not an “instrumentality” of the Haitian government and
therefore the officials they allegedly bribed are not “foreign
officials” within the meaning of the FCPA.
The judges pressed both sides for the definition of
“instrumentality” that the district court should have
used to instruct jurors. Defense counsel argued that an
“instrumentality” must perform a government function,
while prosecutors advocated for the broader definition
used by the district court that considered an array of
factors, including state ownership and control.
The Eleventh Circuit’s ruling, which is expected in the
coming months, will mark the first time that a federal
appellate court has addressed who counts as a “foreign
official” under the FCPA.106
Ninth Circuit and Supreme Court Deny
Greens’ Appeal of Restitution Order
On November 11, 2013, the United States Supreme Court
rejected Los Angeles-based film producers Gerald and
Patricia Green’s petition to review a district court’s
order that they pay US$250,000 in restitution to the
government of Thailand for violations of the FCPA under
the Mandatory Victims Restitution Act (MVRA).107 The
Greens were convicted in 2010 of paying over US$1.8
million to the governor of Thailand’s Tourism Authority
to secure contracts to run the Bangkok International Film
Festival from 2003 to 2006.108 They were sentenced to
six-month jail sentences and ordered to pay restitution to
the victim, the government of Thailand.109
The MVRA requires defendants convicted of violent
crimes, “offenses against property” under Title 18 of
the U.S. Code, and certain other crimes, to compensate
victims for “the full amount of each victim’s losses.”110 It
requires a showing that “an identifiable victim or victims
has suffered a physical injury or pecuniary loss.”111 The
Greens appealed the district court’s order of restitution to
the Ninth Circuit, arguing that the “identifiable victim”
who suffered a “pecuniary loss” must be identified by the
jury, not the judge, under the Supreme Court’s decisions
in Apprendi v. New Jersey, which held that “[o]ther than
the fact of a prior conviction, any fact that increases
the penalty for a crime beyond the prescribed statutory
maximum must be submitted to a jury, and proved beyond
a reasonable doubt,”112 and Southern Union v. United
States, which applied Apprendi to criminal fines.113
On July 11, 2013, the Ninth Circuit rejected these
arguments, upholding the district court’s order.114 The
court noted that Ninth Circuit precedent categorically
held that Apprendi does not apply to restitution, and that
it could not overrule this precedent based only on “strong
signals” that the Supreme Court would apply Apprendi to
restitution.115 The court also noted, however, that Ninth
Circuit precedent in this area was not “well-harmonized”
with Southern Union, effectively inviting the Greens’
petition for Supreme Court review.116 But in denying the
Greens’ request, the Supreme Court leaves intact for now
Ninth Circuit precedent holding that a judge, rather than a
jury, may identify the victim who suffered injury or loss
in connection with a violation of the FCPA.
Settlement Terms Set for Former
Digi CFO
Last year, the SEC filed a complaint in the United States
District Court for the District of Minnesota against
Subramanian Krishnan, former Chief Financial Officer
of Minnesota-based computer hardware manufacturer
Digi International Inc. (Digi). In its complaint, the SEC
alleged that Krishnan oversaw an inadequate system of
internal controls that permitted him to use corporate funds
for unauthorized travel and entertainment expenses and
that he had engaged in conduct that ultimately led Digi
to make inaccurate annual and quarterly filings. At the
time the SEC’s complaint was filed, Krishnan consented
to a final judgment without admitting or denying the
allegations, in addition to being permanently enjoined from
future violations of various provisions of the securities
laws. On July 2, 2013, the SEC announced that Krishnan
Global Anti-Corruption Insights | 17
also had agreed not to act as a public company’s officer or
director for a period of five years from the date the SEC’s
complaint was filed, to a suspension from appearing or
acting as an accountant before the SEC during that time
period, and to pay a US$60,000 civil penalty.
Top US Enforcement Officials
Comment on FCPA
In recent months, top officials from the DOJ and SEC
have discussed FCPA enforcement at conferences in the
Washington, D.C. area. These officials all emphasized
the US government’s continued commitment to FCPA
enforcement.
On September 19, 2013, Kara Brockmeyer, chief of the
SEC’s FCPA Unit, and Charles Duross, Deputy Chief of
the Fraud Section of the DOJ’s Criminal Division, spoke at
a conference sponsored by the American Bar Association.
They addressed, among other topics, resources devoted to
FCPA enforcement, sources of information on potential
FCPA violations, challenges dealing with foreign
authorities, and the rationale behind the resolution of the
DOJ’s and the SEC’s enforcement action against Ralph
Lauren Corp.117
Brockmeyer noted that the SEC has about three dozen
full-time staff members around the country devoted to
FCPA enforcement. The DOJ has about 20 prosecutors
working full-time on FCPA enforcement, according
to Duross. Both officials stated that they frequently
deploy additional attorneys and work with specialists
from across the government on particular cases.
According to Brockmeyer, about 30-40 percent of
the SEC’s cases come from voluntary disclosures.
Additional sources include information learned
during other investigations, media reports, tips from
foreign authorities, and whistleblower complaints.
Although Duross did not offer the same level of detail
about the DOJ’s cases, he observed that less than 50
percent of cases originate from voluntary disclosures.
Both officials addressed the difficulties that can
arise from foreign evidence collection, foreign data
privacy laws that restrict the transfer of information,
and the increasing involvement of foreign authorities
in bribery cases.
Brockmeyer and Duross discussed the SEC’s firstever
FCPA-related NPA, which it entered into with
Ralph Lauren. Brockmeyer explained that the SEC
decided to enter into a NPA in order to reward Ralph
Lauren’s cooperation and remediation. The SEC
decided against a declination, however, because
Ralph Lauren did not have a pre-existing compliance
program and because the alleged misconduct spanned
multiple years. In the same vein, Duross commented
on how the lack of a pre-existing compliance program
may influence enforcement decisions.
In addition, on November 19, 2013, Duross, Brockmeyer,
and other high-level enforcement officials spoke at the
International Conference on the FCPA. Duross told
attendees that the DOJ expects to bring “very significant
cases, top 10 quality type cases” in 2014.118 In a keynote
address at the conference, Deputy Attorney General
James Cole echoed Duross’s comments, saying that
the DOJ would continue to bring major FCPA cases.119
Deputy Attorney General Cole also warned that “there
will be serious consequences” for those who “choose to
conceal misconduct, obstruct investigations and attempt
to mislead investigators,” and he discussed the DOJ’s
efforts to gain international partners in its fight against
bribery.120 In particular, Cole cited training sessions that
US authorities are holding with their counterparts in
Mexico and Brazil.121
Andrew Ceresney, co-director of the SEC’s Division of
Enforcement, delivered another keynote address at the
conference. Ceresney reflected on the large increase in
FCPA enforcement actions that the SEC has seen over
the last 10 years. He mentioned the SEC’s establishment
Global Anti-Corruption Insights | 18
of a specialized FCPA unit, which includes forensic
accountants as well as attorneys, and the SEC’s strong
partnerships with other agencies such as the DOJ
and FBI. He then described four fronts in the SEC’s
enforcement efforts: “(1) the creation of a culture of
FCPA compliance among professionals and corporations;
(2) international collaboration in combating bribery;
(3) the focus on individual FCPA misconduct; and (4)
fostering cooperation with our investigations from
companies and individuals.” Ceresney concluded by
saying that the SEC “will remain the vigilant cop on the
beat when it comes to the FCPA.”122
DOJ Releases Opinion on Lawyer’s
Payment of Medical Expenses for a
Foreign Official’s Daughter
On December 19, 2013, the Justice Department issued
Opinion Procedure Release No. 13-01—its only release
of the year—in response to a request from a US law firm.
The Requestor sought to pay the medical expenses of
the daughter of a foreign official, whom the Requestor
had befriended and who happened to work in the office
responsible for selecting and contracting with international
counsel, including the Requestor’s law firm.
The DOJ concluded that the proposed benefit to the foreign
official’s daughter “will have no impact on Requestor’s or
Requestor’s Law Firm’s present or future business” with
the foreign country. In reaching this conclusion, the DOJ
noted that (1) the foreign official “does not and will not
play any role in the decision to award … legal business
to Requestor’s Law Firm”; (2) the Requestor and foreign
official “informed their respective employers of the
proposed gift and neither has objected”; (3) the proposed
gift is not illegal under the foreign country’s laws; (4) the
foreign country’s laws “require transparent reasoning in
contracting for legal work and criminally punish corrupt
behavior”; and (5) the “Requestor intends to reimburse the
medical provider directly, ensuring that the payments will
not be improperly diverted” to the foreign official. Based
on these facts, the DOJ stated that it does not intend to
take any enforcement action.123
Update on Industry-Wide Investigations
China-Related Investigations Embroil
Pharmaceutical Companies
In addition to the Stryker settlement with the SEC
discussed above, other pharmaceutical and medical
devices companies have found themselves in the news
recently because of corruption-related investigations. As
US authorities continue their scrutiny of the industry,
Chinese authorities also have begun investigating the
conduct of multi-national pharmaceutical companies.124
While details of the investigations are still unfolding,
the Chinese government’s inquiries, often initiated by
whistleblowers, reportedly center on the companies’ selling
practices, such as providing doctors with speaking fees,
cash payments, and entertainment allegedly in exchange
for prescribing the companies’ products.125 According
to the Chinese government, in some cases travel agents,
industry associations, and third party business consultants
were used to disguise and funnel allegedly illicit payments
to doctors to increase prescriptions.126
While China is a lucrative market for the pharmaceutical
industry, it presents enhanced risks because the healthcare
system is government run and managed. Doctors, nurses,
pharmacists, and hospital administrators working in the
Chinese healthcare system may be government officials
under the FCPA, and providing them with improper
benefits in exchange for prescriptions could, therefore,
be considered bribery.127
Global Anti-Corruption Insights | 19
China’s National Health and Family Planning Commission
(NHFPC), the successor agency to the Ministry of Health,
announced in late December that it is instituting a blacklist
for pharmaceutical and medical devices companies
charged with, investigated for, or sanctioned for bribery.
Beginning in March 2014, blacklisted companies will be
barred from selling in the Chinese province responsible
for the charge, investigation, or sanction for two years, and
any company blacklisted twice in the span of five years
will be barred from selling in all provinces.128 Around the
same time, the NHFPC promulgated “Nine Prohibitions
for Strengthening the Healthcare Industry’s Ethics” that
restrict the types of payments healthcare professionals and
institutions may accept.129
Financial Institutions’ Hiring Practices
Come under Investigation
Several major international banks have recently come
under investigation by US enforcement authorities for
hiring practices in China.130 Over the past decade, the
banks’ Chinese branches allegedly hired employees
closely related to officials high in the Chinese government,
such as, in one instance, the grandson of Jiang Zemin,
the former Chinese president, in order to assist them in
getting business in China’s lucrative financial markets.131
According to news reports, the banks competed
extensively among themselves for the most well-connected
“princelings,” as the relatives of high-ranking Chinese
officials are informally called.132 While the FCPA does not
prohibit hiring employees based on political connections,
since hiring the relative of a government official could
be considered a benefit to the official, authorities are
investigating whether the banks improperly hired these
“princelings” in exchange for winning business with stateowned
or -controlled Chinese companies.133 None of the
banks has been accused of any wrongdoing so far, and
there is evidence that many of the princelings were in fact
highly qualified for the positions that they were hired for.134
Alcoholic Beverage Industry – InBev
Several alcoholic beverage manufacturers and distributors
remain under investigation for potential FCPA violations.
On August 2, 2013, Anheuser-Busch InBev SA/NV
disclosed that the DOJ and the SEC are investigating the
company’s affiliates in India, including its Indian joint
venture, InBev Indian Int’l Private Ltd., to determine
whether violations of the FCPA may have occurred.
Anheuser-Busch reported that it continues to conduct
an internal investigation and to cooperate with U.S.
authorities.135
Rounding Out the Enforcement Docket
Wal-Mart Investigation Continues
In its SEC filings, Wal-Mart Stores Inc. disclosed that its
FCPA-related litigation and compliance fees continue to
mount. In the first nine months of 2013, Wal-Mart reported
spending US$224 million in the first nine months of 2013:
US$135 million for ongoing government investigations
and US$89 million for its global compliance program and
organizational improvements.136 This amount reportedly
includes fees Wal-Mart is paying for lawyers representing
more than 30 of its executives.137 The company also
acknowledged in its quarterly SEC filings that part of its
inquiry includes evaluating whether the “prior allegations
of such violations and/or misconduct were appropriately
handled.”138
In addition to alleged misconduct in Mexico, Wal-Mart
is facing inquiries or investigations regarding allegations
of potential FCPA violations in foreign markets including
Brazil, China, and India. Wal-Mart announced in October
that it is ending its Indian joint venture, leaving the
company with control over wholesale operations in India
while turning over retail operations to its former Indian
partner Bharti Enterprises.139
Embraer Expands FCPA Investigation
Embraer S.A., a Brazil-based aircraft manufacturer, has
expanded its investigation into potential FCPA violations
resulting from the sale of aircraft to foreign governments.
Following a subpoena from the SEC in September 2010,
the company launched an investigation into transactions
that took place in three unnamed countries. In its most
recent annual report to the SEC, Embraer disclosed that
it had voluntarily begun reviewing transactions in two
additional countries as well.140
On November 1, 2013, the Wall Street Journal reported
that both US and Brazilian authorities are looking into
whether Embraer bribed foreign officials in the Dominican
Republic in connection with a US$90 million contract
for eight military aircraft. The Wall Street Journal’s
Global Anti-Corruption Insights | 20
information allegedly came from a review of Brazilian
authorities’ request, pursuant to a mutual legal-assistance
treaty, for evidence from US authorities.141 Meanwhile,
Reuters reported that Embraer is also investigating sales of
20 passenger jets to a state-owned airline in Argentina.142
Microsoft Probe by DOJ and
SEC Develops
The DOJ and the SEC probe into kickback allegations
made by a former Microsoft representative in China, as
well as the company’s relationship with certain resellers
and consultants in Romania and Italy, reportedly has
expanded, reaching certain of Microsoft’s sales in Pakistan
and Russia as a result of tips given directly to Microsoft in
the last eight months.143 An anonymous tipster in Russia
reportedly told Microsoft that kickbacks to executives of a
state-owned company were allegedly made by resellers of
the company’s software in order to secure a deal. Similarly,
in Pakistan, a tipster reportedly told Microsoft that the
company had authorized a consulting firm to pay for a
five-day trip to Egypt for a government official and his
wife in order to secure a tender. Microsoft has not been
accused of any wrongdoing with respect to these tips, and
both the DOJ and the SEC have declined to comment.
Layne Christensen Likely Nearing
FCPA Settlement
Layne Christensen Company—a Kansas-based water
management, construction, and drilling business—has
been investigating potential FCPA violations in connection
with payments made to agents and third parties interacting
with government officials in certain African countries
since 2010. The company disclosed in its quarterly report
filed with the SEC on December 10, 2013 that it “currently
estimates a potential settlement range for resolving these
matters [with the DOJ and SEC] of US$10.4 million to
US$16.0 million.” Based on this estimate, the company
increased its settlement reserve from US$4.8 to US$10.4
million.144
Companies Disclosing the End of
Government Investigations
In the second half of 2013, several companies disclosed
that the DOJ and/or the SEC had concluded bribery-related
investigations without the commencement of enforcement
proceedings. For example, in its quarterly report filed
with the SEC on July 25, 2013, Ohio-based glass bottle
manufacturer Owens-Illinois, Inc. disclosed that on July
18, 2013 “the Company received a letter from the DOJ
indicating that it presently did not intend to take any [FCPA
criminal] enforcement action and is closing its inquiry into
the matter.”145 Owens-Illinois had voluntarily disclosed to
the DOJ and the SEC in October 2012 that it was conducting
an internal investigation into conduct in certain overseas
operations that might have violated the FCPA. Owens-
Illinois did not indicate in which countries FCPA violations
might have occurred, nor did it disclose the conduct or the
amounts of payments involved. It acknowledged that the
company could still face SEC enforcement.
Maryland-based ammunitions maker, The Allied Defense
Group, Inc., disclosed in its quarterly report filed with the
SEC on August 14, 2013 that the DOJ would not pursue a
criminal FCPA enforcement action against the company.146
Allied was notified by the SEC in late 2012 that the SEC
“would not pursue a civil enforcement action against the
[c]ompany.” A former Allied Defense Group employee
and 21 other individuals were arrested in 2010 in a “largescale
undercover operation that targeted foreign bribery
in the military and law enforcement products industry” in
Africa—the SHOT show sting—but the DOJ later dropped
the criminal charges against all individuals. The company
explained that with resolution of the DOJ’s investigation,
it planned to move forward with plans for dissolution and
begin distribution of about US$43 million in assets to
shareholders at the end of 2013.
Italian oil and gas producer, Eni S.p.A., disclosed in a
September 3, 2013 SEC filing that on April 29, 2013,
the SEC notified Eni that it was closing its anti-bribery
investigation of the company’s activities in Libya, “without
further claims or other observations.”147 In June 2011,
Eni received a subpoena for documents dating back to
2008 as part of the SEC’s investigation into certain illicit
payments to Libyan officials, possibly in violation of the
FCPA, and in December 2011, the company received an
additional request for documents. Eni’s legal team then met
with the SEC staff in October 2012 to provide additional
documentation and clarification.
Companies Disclosing New Investigations
In the second half of 2013, other companies disclosed that
the DOJ and/or the SEC had commenced bribery-related
investigations. For example, infant and child nutrition
Global Anti-Corruption Insights | 21
company Mead Johnson & Company LLC stated in a
quarterly report filed with the SEC on October 24, 2013
that it was complying with an SEC request for documents
relating to its Chinese subsidiary’s promotional activities,
which may have included the payment of bribes.148
On September 10, 2013, Gold Fields, a South African gold
producer with a secondary listing on the New York Stock
Exchange, disclosed that the SEC is investigating payments
made in connection with efforts to obtain a license to mine
South Deep, one of the world’s largest gold deposits in South
Africa. According to Gold Fields, the SEC is looking into
the company’s payment of US$210 million, in the form of a 9
percent stake in the South Deep mine, to a fund called Black
Economic Empowerment. Black Economic Empowerment
was established to create economic opportunities “to
redress inequalities” created by South Africa’s former
apartheid regime, but the fund has attracted criticism in
recent years for benefiting only a politically connected elite.
News reports suggest that Baleka Mbete, chairwoman of
South Africa’s ruling African National Congress party, may
have improperly benefited from the 2010 deal between Gold
Fields and Black Economic Empowerment.149 Gold Fields
has stated that an independent investigation found that
implementation of the 2010 deal did not meet the company’s
own standards.150
Texas-based Hyperdynamics Corporation disclosed that
on September 13, 2013 it received a subpoena from the DOJ
seeking documents relating to the oil and gas company’s
business dealings in the Republic of Guinea.151 According
to Hyperdynamics, the DOJ is investigating whether the
company’s activities in obtaining and retaining concession
rights for offshore exploration, and its relationships with
charitable organizations, violate the FCPA and anti-moneylaundering
laws. The company reported that it is fully
cooperating with the government’s investigation. As discussed
above, US authorities reportedly are also investigating the
activities of another company, BSG Resources, in Guinea.
Park Ohio Holdings Corporation, a diversified
manufacturing services and products holding company,
reported that in August 2013, the company received a
subpoena from the SEC in connection with the SEC’s
investigation of a third party. The company also learned
at that time that the DOJ was conducting a criminal
investigation of the third party. Park Ohio indicated that
it intended to cooperate with the SEC and the DOJ and,
in connection with responding to the SEC’s subpoena,
disclosed that in November 2007, the third party
participated in a payment on behalf of the company to a
foreign tax official that implicates the FCPA.152
Canellos Leaving SEC;
Duross Leaving DOJ
On January 3, 2014, the SEC announced that George
Canellos, co-director of its Enforcement Division, will
be stepping down.153 Canellos has headed the SEC’s
Enforcement Division since January 2013, initially on
an interim basis and then as co-director, and before that
he was director of the SEC’s New York regional office.
The Division will now be led solely by Andrew Ceresny,
who has served as Canellos’s co-director since April.
In addition, Charles Duross, Deputy Chief of the Fraud
Section of the DOJ’s Criminal Division, is leaving the
Department for private practice. Duross has led the
DOJ’s FCPA unit since April 2010. He will be succeeded
by Patrick Stokes, who previously was the co-head of
the Fraud Section’s Securities and Financial Fraud unit.
SEC Whistleblower Program Update
The SEC granted two more whistleblower awards in
October 2013, including one for US$14.8 million, in
matters not involving the FCPA.154 In its 2013 annual
report, the SEC reported that it has received 3,238 tips
in 2013, 149 related to the FCPA. These numbers are up
from 2012, when the SEC received 3,001 tips, 115 of
which related to the FCPA.155
International Enforcement Involving
Companies That Previously Resolved
FCPA Enforcement Actions
Investigations by the countries in which alleged FCPA
violations occurred continued in the second half of 2013.
The FCPA enforcement action against Siemens AG
was based in part on charges in Argentina stemming
from alleged bribery to win an ID card contract.
On December 27, 2013, Argentine Judge Ariel Lijo
ordered the prosecution of nine individuals affiliated
with Siemens’s efforts to win the ID card contract,
three individuals who acted as intermediaries, and five
individuals associated with the SOCMA group, the
competing bidder that intentionally lost the ID contract
Global Anti-Corruption Insights | 22
award.156 Of these 17, Uriel Sharef, a former Siemens
officer and board member who previously settled the
SEC’s civil charges,157 now faces criminal prosecution in
both the US and Argentina. Former Siemens executives
Ulrich Bock, Andreas Truppel and Eberhard Reichert,
and one of the Siemens intermediaries, Miguel Czysch,
face both criminal and civil charges in the US. Judge
Lijo also charged current Siemens employee Bernd
Regendantz, who was not charged criminally in the US
and who settled the SEC’s civil charges in 2011.158
Separately, Siemens subsidiary Siemens Industrial
Turbomachinery agreed to pay US$10.6 million to Swiss
prosecutors for failing to prevent payment of bribes
between 2004 and 2006 to a Russian gas company. In
exchange for the bribes, the company reportedly received
“contracts to supply gas turbines for the construction of
the Yamal gas pipeline.”159
Italian and Algerian authorities are investigating
whether Saipem SpA, which is controlled by Italian
energy company Eni SpA, paid kickbacks to officials
at Algeria’s state-owned oil company in exchange for
billions of dollars in contracts. The investigation has
included Eni’s CEO, Paolo Scaroni, as well as Algeria’s
former energy minister, Chekib Khelil. Eni has denied
any wrongdoing by it or its CEO.160 In 2010, Eni and its
subsidiary Snamprogetti Netherlands B.V. paid US$365
million to resolve FCPA-related charges relating to the
subsidiary’s conduct in Nigeria.161
Court Vacates SEC Rule Requiring Oil
Companies to Disclose Foreign Payments
Issuers recently scored a victory when, on July 2, 2013,
the U.S. District Court for the District of Columbia
vacated a rule promulgated by the SEC under Dodd-
Frank.162 The new rule would have required oil, gas,
and mining issuing companies to include information
in their annual reports about certain payments related
to resource extraction that were made to foreign
governments or the US government for the purpose
of commercial development of oil, natural gas, or
minerals.163 According to SEC estimates, compliance
with the rule would have cost issuers about US$1
billion.164 The rule would have required issuers to
disclose payments to foreign governments that they
were not previously required to disclose.
On October 10, 2012, the American Petroleum Institute,
the US Chamber of Commerce, and several other groups
filed a lawsuit challenging the rule in the District Court
for the District of Columbia. On July 2, 2013, the
District Court invalidated the rule.
The District Court first found that the SEC had misread
Section 1504 of Dodd-Frank, which added Section 13(q)
to the Securities and Exchange Act of 1934. The SEC
interpreted Section 13(q) as requiring public disclosure
of the annual reports. But the District Court held that
because the plain language of the section “says nothing
about the public filing of these reports,” the SEC had
not exercised its “own judgment” to interpret the
requirements of the section.165 In this connection, the
District Court gave no deference to the SEC’s reliance
on Congressional intent. The Court then turned to the
SEC’s refusal to grant exemptions for reports relating
to countries that prohibit the disclosure of payment
information—such as Angola, Cameroon, China,
and Qatar—despite express Congressional authority
to make “necessary or appropriate” exemptions.166 In
sustaining plaintiffs’ challenge to the rule, the District
Court held that the SEC had failed to undertake “specific
analysis” of the facts at issue, and the SEC’s refusal to
grant an exemption was arbitrary and capricious.167
The District Court’s decision returned the implementation
of Section 13(q) to the SEC for additional rulemaking.
The SEC declined to appeal the decision.168
Global Anti-Corruption Insights | 23
FCPA-Related Civil Litigation
Fifth Circuit Holds Whistleblower Must
Disclose Concerns to SEC to Qualify for
Protection under Dodd-Frank
On July 17, 2013, the United States Court of Appeals
for the Fifth Circuit held that, in order to qualify as a
whistleblower protected from retaliation under Dodd-
Frank, an employee must disclose his or her concerns
to the SEC; internal disclosures within the company
are insufficient.169 Khaled Asadi, a G.E. Energy (USA),
LLC’s Iraq Country Executive working in Jordan, was
told by Iraqi officials that GE Energy had hired a woman
closely associated with an Iraqi senior official to curry
favor with that official. Concerned that this employment
arrangement might constitute an FCPA violation, Asadi
reported it to his supervisor and company ombudsperson,
after which he received a negative performance review
and was, according to Asadi, pressured to accept a
reduced role. A year later, he was fired and Asadi sued the
company for wrongful termination under Dodd-Frank.170
The district court dismissed Asadi’s case on the
ground that his extraterritorial whistleblowing was
not within the purview of Dodd-Frank.171 The Fifth
Circuit, reviewing the case de novo, affirmed the
dismissal of Asadi’s case, finding that Asadi was not
a whistleblower as defined by Dodd-Frank because
he failed to raise his concerns directly with the SEC.
While several district courts have held that Dodd-
Frank does not require disclosure to the SEC, the
Fifth Circuit held that “[u]nder Dodd-Frank’s plain
language and structure, there is only one category of
whistleblowers: individuals who provide information
relating to a securities law violation to the SEC.”172
The Fifth Circuit rejected Asadi’s invocation of
Dodd-Frank’s description of “protected activity in
a whistleblower-protection claim,” holding that the
description of protected activity did not “define
which individuals qualify as whistleblowers.”173
Significantly, the Fifth Circuit’s holding, based on
what it characterized as the “plain language” of Dodd-
Frank expressing Congress’s clear intent, refused to
defer to SEC regulations answering this very same
question in Asadi’s favor.174 Currently, this case is
the only circuit court-level decision to address the
issue. District courts in other circuits have reached
the opposite conclusion.
DOJ Intervenes in Ongoing FCPA-Related Litigation
against Wynn Resorts; Shareholder Actions against
Sands Also Continue
As detailed in our Summer 2013 newsletter, the DOJ
intervened in the ongoing dispute between Wynn
Resorts, Ltd. and Kazuo Okada, a former executive
and former board member.175 On October 29, 2013, the
DOJ requested a six-month delay to continue its ongoing
investigation into Okada’s activities in the Philippines,
which the court granted on the basis of an affidavit
provided under seal that raised concerns for witness
safety. In the meantime, however, the court ordered the
parties to engage in discovery.176
Another casino, Las Vegas Sands Corp. (LVSC), is also
embroiled in FCPA-related litigation. On February 9,
2011, LVSC received a subpoena from the SEC relating
to allegations made by a former executive that LVSC’s
subsidiary, Sands China Limited, had failed to comply
with the FCPA. The company was also advised that the
DOJ was conducting a similar inquiry. Shortly thereafter,
various shareholders filed actions in both federal and
state court alleging that the LVSC directors breached
their fiduciary duties by failing to ensure that LVSC
installed and maintained adequate internal controls
to prevent violations of the FCPA and state gaming
regulations.177 Both cases were stayed at various times
to give a special litigation committee composed of LVSC
directors time to investigate the alleged FCPA violations.
On November 7, 2013, LVSC reported in its quarterly
filing that the Audit Committee of the Company’s Board
of Directors had reached preliminary findings, including
that “there were likely violations of the books and records
and internal controls provisions of the FCPA and that in
recent years, the Company has improved its practices with
respect to books and records and internal controls.”178 LVSC
stated that it did not believe that the preliminary findings
(1) had a material impact on the financial statements of the
Company, (2) warranted any restatement of the Company’s
past financial statements or (3) represented a material
weakness in the Company’s internal controls over the
financial reporting as of September 30, 2103. It is unclear
how these findings will impact the ongoing SEC and DOJ
investigations or the shareholder derivative actions.
Global Anti-Corruption Insights | 24
US House of Representatives
Establishes a Task Force to Review
Over-Criminalization
On May 5, 2013, the Judiciary Committee of the US
House of Representatives announced the creation of a
bipartisan “Over-Criminalization Task Force” to review
the estimated 4,500 federal crimes in the U.S. code and
make recommendations for improvements to federal
criminal law.179
At the Task Force’s first hearing on June 14, 2013,
two witnesses testified about the need for reforms to
the FCPA. George J. Terwilliger III, former Deputy
Attorney General and acting Attorney General, argued
that the FCPA “presents a significant impediment
to businesses and uncertainty in FCPA enforcement
standards represents a ready example of the adverse
affect on businesses of poorly formed statutes.” He
advocated for Congress to amend the FCPA to include
an affirmative defense for companies that have adequate
compliance procedures and a repose for companies that
complete post-transaction due diligence on an acquisition
within a defined period of time.180 Steven D. Benjamin,
the president of the National Association of Criminal
Defense Lawyers, cited the FCPA as an example of
poor legislative draftsmanship. He expressed concern
that the statute’s “overly broad language has created an
enforcement climate where the statute means whatever
the government says it means.”181
Moreover, at a Task Force hearing on July 19, 2013,
Professor John S. Baker, Jr. lamented the wide
prosecutorial discretion that has resulted from Congress’s
failure to establish clear mens rea requirements in
the FCPA and other criminal statutes.182 As the Over-
Criminalization Task Force continues to assess how
federal criminal laws might be improved, the FCPA is
sure to remain an area of interest.
Global Anti-Corruption Insights | 25
GLOBAL ANTI-CORRUPTION UPDATE
Global Anti-Corruption Insights | 26
Developments in the United Kingdom
SFO Prosecution of Alcoa
Middleman Falters
The SFO suffered another setback in December 2013
when it was forced to offer no evidence in the prosecution
of Victor Dahdaleh, resulting in a verdict of not guilty.
The SFO alleged that Dahdaleh paid bribes totaling £38
million to members of the Bahraini Royal Family in return
for US$3 billion worth of contracts between the stateowned
aluminum company, Aluminum Bahrain (Alba),
and Alcoa.183 Its case collapsed after a key prosecution
witness, Bruce Hall, the former chief executive of Alba,
provided testimony that “differed markedly from the
witness statement he had provided to the SFO.”184 Hall
had previously pleaded guilty to being involved in the
bribery conspiracy with Dahdaleh and Sheikh Isa bin
Ali-al-Kalifa, the former Bahraini Petroleum Minister.
In addition, two US-based lawyers from the law firm
Akin Gump Strauss Hauer & Feld LLP, which represents
Alba in litigation against Dahdaleh and Alcoa in the
US, “were unwilling to attend trial in the UK and face
cross-examination,” after previously confirming their
willingness to appear.185 Judge Nicholas Loraine-Smith
of the Southwark Crown Court questioned whether the
SFO effectively had delegated its investigation in Bahrain
to Akin Gump, which he described as the “defendant’s
opponent in a hotly contested, ongoing civil action in
America.”186 In light of the lack of witness testimony
against Dahdaleh, the SFO “concluded that there is no
longer a realistic prospect of conviction in this case.”187
The Dahdaleh case has clear parallels with the Tchenguiz
litigation, in which the defendants alleged that the SFO
placed greater significance than was appropriate on a report
authored by the accounting firm Grant Thornton, itself
involved in a £2 billion civil suit with the defendants.188
As we have reported previously, in July 2012, the High
Court of Justice sharply criticized the SFO’s prosecution
of the Tchenguiz brothers, questioning whether the SFO
had the proper resources to conduct its investigation.189
UK SFO’s First Bribery Act Prosecution
On August 14, 2013, the SFO announced bribery charges
against three employees of Sustainable Agroenergy
Plc, the first bribery charges brought by the SFO under
GLOBAL ANTI-CORRUPTION UPDATE
Global Anti-Corruption Insights | 27
the Bribery Act.190 Gary Lloyd West, the company’s
former Director and Chief Commercial Officer; Stuart
John Stone, an independent financial advisor associated
with the company; and Fung Fong Wong, the company’s
former Financial Controller, are charged with “making and
accepting a financial advantage” contrary to sections 1(1)
and 2(1) of the Bribery Act. In addition, these individuals,
along with James Brunel Whale, the company’s former
Chief Executive Officer, are charged with fraud-based
offences involving the promotion of bio-fuel products
linked to Jatropha-tree plantations in Southeast Asia. They
are due to stand trial on September 22, 2014.
The SFO is currently investigating Sustainable Agroenergy
Plc, which could be the first company charged under
Section 7 of the Bribery Act for failing to prevent
bribery.191 Sustainable Agroenergy Plc is a subsidiary
of the Sustainable Growth Group, which was placed in
administration in March 2012.
This is not the first Bribery Act prosecution in the UK,
however, as the Crown Prosecution Service has already
successfully prosecuted a court clerk, a taxi-driver, and
a university student under the Act. These prosecutions
involving small scale criminal conduct by individuals
were not what was expected when the Bribery Act was
brought into force, as it was designed as a tool for the SFO
to tackle large, complex, and multi-jurisdictional bribery
and corruption investigations.
Smith & Ouzman Indicted for
Alleged Bribery in Africa
UK-based printing company Smith & Ouzman Limited,
which produces, among other products, millions of ballot
papers for African elections, has been charged by the
SFO with making corrupt payments. According to a news
report, the company and its employees allegedly made
payments totaling £413,552.12 to influence the awarding
of contracts in Ghana, Kenya, Mauritania and Somalia
between November 2006 and December 2010.192
The company’s alleged conduct occurred before the
effective date of the Bribery Act and, accordingly, the
defendants face charges under Section 1 of the Prevention
of Corruption Act 1906. In addition to indicting the
company, the SFO indicted its former Chairman Chris
Smith, its Sales and Marketing Director Nick Smith
(Chris Smith’s son), its International Sales Manager
Tim Forrester, and its agent Abdirahman Omar. The
defendants have yet to enter formal pleas and will next
appear in court on January 27, 2014, with the trial currently
set for November 10, 2014.193
SFO Confirms Criminal Investigation of
Rolls Royce plc
In September 2013, SFO Director David Green stated
at the International Symposium on Economic Crime
conference at Cambridge University that the SFO is
currently engaged in eight investigations in relation to
suspected bribery offenses.194 On December 23, 2013, the
SFO confirmed “that the Director has opened a criminal
investigation into allegations of bribery and corruption
at Rolls Royce.”195 As we discussed in our Summer 2013
newsletter, Rolls Royce had previously announced that it
was conducting an internal investigation into allegations
of bribery in Indonesia and in China.196
FCA Fines JLT Specialty for Insufficient
Anti-Bribery Controls
On December 19, 2013, the Financial Conduct Authority
(FCA) imposed a financial penalty of £1,876,000 on JLT
Specialty Limited (JLT) for failing to have sufficient antibribery
and anti-corruption procedures between February
19, 2009, and May 9, 2012, in breach of Principle 3 of the
Authority’s Principles for Business.197
JLT provides insurance brokering, risk management and
claims consulting services to both national and international
corporate clients. As part of its business operations, JLT
uses thirdparty introducers to gain international business.
The FCA found that JLT failed to conduct adequate due
diligence before entering into a relationship with an overseas
introducer, to adequately assess the risk associated with each
piece of new business introduced by an overseas introducer,
and finally to adequately implement its own anti-bribery and
anti-corruption policies.198 It is important to note that the FCA
did not find that JLT had, in fact, bribed anyone or authorized
any bribes, but that the company’s procedures were either
inadequate or not properly implemented so as to mitigate the
risk of being potentially involved in bribery or corruption.
This case serves as a reminder that companies can be fined
under UK anti-bribery and anti-corruption legislation for
lack of adequate anti-corruption procedures even in the
absence of any criminal bribery.
Global Anti-Corruption Insights | 28
Director Green Discusses SFO’s Focus,
Approach by Self-Reporting
In two recent speeches, SFO Director David Green
described the approach the SFO is taking under his
leadership. On September 2, 2013, speaking before the
Cambridge Symposium, Green described several “radical
changes” the SFO has made since he took office in April
2012.199 After reiterating that the SFO is an investigatory
and prosecutorial agency, “not a regulator, a deal-maker
or a confessor,” Green explained that:
The SFO is focused on cases that “undermine UK
commercial and financial [business] in general and the
reputation of the City of London in particular.” The SFO
also will pursue cases where there is either a “strong
public interest element” or a new type of serious fraud.
The SFO has revised its guidance on corporate
self-reporting. While old guidance implied that a
corporation that self-reported would be “guaranteed
a civil rather than criminal outcome,” in Green’s view
no prosecutor should give that guarantee. Instead,
under SFO’s current guidance, decisions to prosecute
corporations that self-report will be made under the
full code test. Green explained that a “genuine selfreport”
can still be a decisive factor in choosing not
to prosecute.
The SFO is implementing new prosecutorial tools,
including Deferred Prosecution Agreements.
The SFO was working on 68 cases at the time of his
speech, including eight Bribery Act matters.
A month later, on October 24, 2013, in front of the
Pinsent Masons and Legal Week Regulatory Reform
and Enforcement Conference, Green further elaborated
on SFO’s new self-reporting guidance and prosecution of
corporations:200
Green explained that the change in guidance regarding
self-reporting reflected only a change back to the
historic policy that the SFO would apply the full code
test to self-reported conduct.
According to Green, even though the new guidance
does not guarantee a civil settlement, self-reporting
still mitigates the chances of prosecution. Furthermore,
corporations that engage in a cover-up risk additional
charges and penalties.
Green recommended that corporations that decide
to self-report should do so as soon as the misconduct
is discovered, to lessen the chances that the SFO
discovers the misconduct before the corporation
self-reports.
Green suggested extending the principle contained
in Section 7 of the Bribery Act, which holds a
corporation liable if the company fails to prevent
bribery by its employees, to corporate failures to
prevent crimes of dishonesty or fraud. In Green’s
view, this change would improve corporate culture
and would force large institutional shareholders to be
vigilant about their investments.
Green concluded by telling attendees that in his view,
prosecution of a corporation would be appropriate where
a corporation profited from fraud by its employees, where
illegal practices were tolerated, where deterrence was
needed, and where senior management failed to enforce
a company’s compliance regime.
National Crime Agency Replaces the
Serious Organised Crime Agency
The National Crime Agency (NCA) is a national law
enforcement agency in the UK, which became fully
operational on October 7, 2013 and replaced the Serious
Organised Crime Agency (SOCA). The NCA was
conceived under provisions granted by the Crime and
Courts Act 2013 to “lead the UK’s fight to cut serious and
organised crime,” including bribery and corruption.201
There have been two previous agencies with similar
mandates: the National Crime Squad was created in 1998
Global Anti-Corruption Insights | 29
and SOCA in 2006, making the NCA the third such agency
in 15 years. This has resulted in claims that the creation
of the NCA is simply a rebranding exercise.
There are some differences, however, between the NCA
and its predecessors. The most significant example is
that, unlike SOCA, the Director General of the NCA has
the power to command local police forces in England,
Scotland and Wales to allocate their resources to assist
the NCA carry out its functions, which include crime
reduction, intelligence gathering, and overseeing
immigration, customs and counter-terrorism efforts. In
Northern Ireland, due to policing provisions in the 1998
Good Friday Agreement, the NCA’s remit covers only
borders and customs.
The NCA has approximately 4,000 officers and a budget
of £494 million. Unlike local police forces, the NCA will
oversee policing across the whole of the UK, in addition
to working in co-ordination with other national agencies,
both domestic and international. With its allocation of
resources and broad mission, it is perhaps unsurprising
that the NCA has been compared to the US Federal Bureau
of Investigation by the British media.202
Home Office Publishes “Serious
and Organised Crime Strategy”
On October 7, 2013, the Home Office published a new
strategy document entitled the “Serious and Organised
Crime Strategy,” which sets out how the UK intends
to tackle serious and organized crime. The strategy
document is important because it sets out the proposed
new enforcement regime for bribery and corruption
investigations and prosecutions, and suggests that a
US-style “qui tam” whistle-blowing incentive could be
introduced.203
Under the current enforcement system, the SFO has
primary responsibility for investigating and prosecuting
complex domestic and international bribery and corruption
cases. The Crown Prosecution Service prosecutes
less-complex and smaller cases, and the FCA pursues
enforcement actions against those companies that fail to
adequately address bribery and corruption risks through
their internal controls. The new Home Office proposal
would see the Home Office taking control of all domestic
anti-bribery and corruption policy, and, together with other
governmental bodies, coordinating the investigation of
international corruption. The NCA would be responsible
for addressing bribery and corruption linked to organized
crime and would have its own team of investigators to do
so. Finally, the SFO would retain its status as the primary
prosecutorial body for complex domestic and international
investigations and prosecutions.204
The proposal also states that the Ministry of Justice
would be “consider[ing] the case for incentivising whistle
blowing, including the provision of financial incentives
to support whistle blowing in cases of fraud, bribery
and corruption.” There is only fleeting reference to this
potential new policy in the report, but a clear desire to
discover “what lessons can be drawn from the successful
‘Qui Tam’ provisions in the US.”205 Qui tam provisions
similar to those of the US False Claims Act could be a
substantial weapon in the UK prosecutors’ arsenal.
The implementation date for the strategy document has yet
to be announced, but it is clear that the UK government
wishes to send out a strong message that it is committed
to pursuing bribery and corruption and increasing the
number of enforcement actions and prosecutions.
Canada Takes Steps to Increase
Anti-Corruption Enforcement
Canada’s efforts to combat foreign corruption continued
to make headlines in the second half of 2013, as Canadian
prosecutors obtained a conviction under Canada’s recently
strengthened Corruption of Foreign Public Officials Act
(CFPOA) and pursued charges of corruption against officials
previously employed by a prominent engineering company.
Global Anti-Corruption Insights | 30
Nazir Karigar Awaits Sentencing
Following the First CFPOA Conviction
On August 15, 2013, Nazir Karigar, a Canadian resident
acting as an agent for CryptoMetrics Canada, became the
first individual convicted under the CFPOA.206 Karigar’s
case was the first CFPOA prosecution to proceed to trial;
three previous CFPOA convictions resulted from guilty
pleas entered by corporations.207
Karigar entered into a conspiracy to bribe Indian
government officials between June 2005 and January
2008 in a failed bid-rigging plot to win an airline
security contract.208 Karigar worked for CryptoMetrics
in its bid to sell biometric facial recognition technology
to Air India, an airline the court found was owned and
controlled by the government of India.209 In June 2006,
CryptoMetrics’ US parent transferred US$200,000
to Karigar’s account-purportedly to bribe Air India
officials. An additional US$250,000 was later transferred
to Karigar to ensure that the Minister of Civil Aviation
would support CryptoMetrics’ bid. The evidence against
Karigar included an email Karigar sent to the DOJ, he
believed anonymously, reporting bribery allegations
against CryptoMetrics. An official at the Canadian
Consulate in Mumbai also testified that Karigar told her
that CryptoMetrics had bribed India’s Minister of Civil
Aviation.
The Air India contract was not awarded to CryptoMetrics,
and there was no evidence of what became of the funds
received by Karigar.210 The court held, however, that the
CFPOA covered the conspiracy to offer a bribe to a foreign
official. In addition, the court found that the definition of
“foreign public official” under the CFPOA is broad and
includes employees of state-owned enterprises controlled
by the government, such as the Air India officials, and that
Canada had territorial jurisdiction over the crime because
Karigar acted as an agent of a Canadian company, he was
a resident in Canada, the benefit of the bribery would have
accrued to a Canadian company, and the prosecution did
not offend international comity.
Karigar is still awaiting sentencing. He is subject to a
sentence of up to 14 years in prison and monetary fines.211
SNC-Lavalin Group Inc. Investigation
Continues
Additional revelations and developments concerning
alleged bribery at SNC-Lavalin Group Inc. (SNCLavalin)
continue to surface. As we have previously
reported,212 Pierre Duhaime, the former CEO, was arrested
in late 2012 and charged by Canadian authorities with
fraud, conspiracy to commit fraud, and using forged
documents in connection with a contract worth an
estimated C$1.3 billion (approximately US$1.25 billion)
the company procured to build McGill University Health
Centre in Montreal in 2010.213
As we have also previously reported, two other executives
at SNC-Lavalin were charged in June 2012 with bribing
officials in Bangladesh in connection with bidding for
the US$1.2 billion Padma Multipurpose Bridge Project
in Bangladesh. This, as well as misconduct in relation
to the World Bank-financed Rural Electrification and
Transmission project in Cambodia by SNC-Lavalin,
led the World Bank Group to debar SNC-Lavalin—in
addition to over 100 of its affiliates—for a period of 10
years.214 More recently, in September 2012, the Royal
Canadian Mounted Police (RCMP) arrested and charged
another former SNC-Lavalin executive, Kevin Wallace,
with bribery in connection with the Bangladesh bridge
construction project.215
A fourth former SNC-Lavalin executive, Riadh
Ben Aissa, has now been extradited to Canada from
Switzerland, where he had been held since April 2012,
for allegedly orchestrating the payment of more than
US$160 million in bribes to Saadi Gadhafi, the son of the
late Libyan leader Moammar Gadhafi, in exchange for
engineering contracts in Libya.216 According to an affidavit
filed by the RCMP in April 2012, since at least 2001 Ben
Aissa lavished gifts on Saadi Gadhafi, including a US$2.5
million yacht, as a reward for steering lucrative contracts
to SNC-Lavalin, such as one for a US$275 million prison
near Tripoli.217 The affidavit also alleges that Gadhafi had
been offered a job at SNC-Lavalin as “VP Maghreb,” with
a US$150,000 starting salary,218 and that one of Ben Aissa’s
subordinates had plotted to smuggle Gadhafi out of Libya
to Mexico during the unrest that ultimately toppled his
father’s government.219 The RCMP also alleges that Ben
Aissa “orchestrated the transfer” of US$22.5 million from
SNC-Lavalin to a Bahamian company, which Canadian
Global Anti-Corruption Insights | 31
investigators say was then used to bribe public officials to
award SNC-Lavalin the health center contract.220
In addition to the alleged misconduct in Libya, SNCLavalin’s
bribery-related troubles may extend into
Algeria.221 In June 2013, Algerian police raided SNCLavalin’s
office in Algiers amid an investigation into the
company’s alleged use of bribes and kickbacks to Algerian
officials to secure infrastructure projects.222
In May 2013, the company announced that it was offering
amnesty to any employees, excluding top executives or
anyone who profited from misconduct, who, between June
and August of 2013, reported any corrupt activity that
they had observed at the company.223 The company also
announced in September 2013 that it was “making rapid
progress toward its goal of implementing a company-wide
ethics and compliance framework,” listing such initiatives
as the implementation of an employee anti-corruption
manual and new third-party due diligence measures.224
Japan Launches Investigation of
Deutsche Securities Inc.
In September 2013, during a regularly scheduled audit of
Deutsche Securities Inc., Deutsche Bank AG’s Japanese
investment arm, the Japanese Securities and Exchange
Surveillance Commission (SESC) uncovered large
expenses made by bank employees for the entertainment
of three Japanese pension fund executives from 2010 to
2012.225 Since these pension fund executives manage
part of the Japanese national pension system, they are
considered public employees under Japanese law, and,
as a result, providing them with excessive entertainment
could be a violation of Japanese anti-bribery statutes.226
According to news reports, Deutsche Securities had
raised concerns about its entertainment practices to the
SESC earlier in the year after an internal review, but it is
not clear what impact this had on the SESC’s audit.227 An
SESC official commented during a news conference that
the Deutsche Securities sales team responsible for selling
products to pension funds “offered such entertainment
with a clear purpose to sell their financial products-indexlinked
bond that the brokerage has developed … and we
understand that during their overseas trip, they solicited
sales of financial products.”228
On December 5, 2013, the Tokyo police arrested Shigeru
Echigo, a Deutsche Securities employee, and Yutaka
Tsurisawa, a former official at Mitsui & Co.’s pension
fund, which had been a client of Deutsche Securities.
According to police, Echigo spent around US$8,800 in
2012 on Tsurisawa, paying for meals, entertainment,
overseas trips, and golf outings, as a reward for Tsurisawa
having invested US$9.7 million of the pension fund money
with Deutsche Securities.229 One week later, the Japanese
Financial Services Agency (FSA), Japan’s securities
regulator, on the recommendation of the SESC, ordered
Deutsche Securities to improve its business practices
and develop a plan by January 14, 2014 to prevent similar
“excessive entertainment” expenditures.230 Deutsche
Securities apologized for its actions and announced that
its CEO will receive a 20 percent pay cut for six months,
its COO and Chairman will receive 30 percent pay cuts
for six months, and two other executives will receive pay
cuts as well.231
BRIC Countries Enhance
Anti-Corruption Efforts
Brazil’s Clean Company Act Takes Effect
As we reported in our Summer 2013 FCPA Newsletter,
Brazil’s Clean Company Act will take effect on January
29, 2014.232 The Act permits Brazilian authorities to pursue
civil and administrative liability against corporations,
including foreign corporations operating in Brazil,
found to have engaged in corruption, whether foreign
or domestic. The Act does not recognize an exception
for facilitation payments, though it contemplates that
Brazilian enforcement authorities will recognize the
existence of a company’s compliance function and a
company’s willingness to cooperate with Brazilian
authorities as potential mitigating factors in determining
any sanctions.
Other developments in Brazil include an investigation into
alleged bribery and price-fixing launched by Sáo Paolo
state prosecutors in August 2013, in connection with
the construction and maintenance of Sáo Paolo’s metro
rail systems between 1999 and 2009. The companies
under investigation for price-fixing and forming a cartel
include Siemens AG and Alstom SA, as well as Spain’s
CAF, Japan’s Mitsui, and Canada’s Bombardier.233 In
connection with this investigation, in November 2013,
Brazilian judges froze assets worth US$26 million dollars.
Siemens AG, Alstom SA, and five individuals, including
Global Anti-Corruption Insights | 32
three former heads of Sáo Paolo’s commuter rail company
were among the parties with assets frozen.234
Russia’s Supreme Court Issues Guidance
Regarding Anti-Corruption Laws
On July 9, 2013, the Russian Federation’s Supreme Court
issued Resolution Number 24 on Court Practice in Bribery
Cases and Corruption Crimes, which provides guidance to
judges regarding Russia’s anti-corruption law.235 While the
guidance reflects that Russia’s anti-corruption laws have
similarities to the FCPA and the Bribery—consistent with
Russia’s ascension to the OECD’s Anti-Bribery Convention
in 2012—it also reflects a divergence from the FCPA and the
Bribery Act in one key respect. Section 23 of the Resolution
provides that payments or other benefits provided to third
parties, rather than to a government official or a member
of the government official’s family, do not constitute bribes
if the government official or a member of the government
official’s family does not obtain a material benefit. In this
regard, charitable donations, even if made at the request
of a government official, may not constitute bribes under
Russian law, though they may still violate US, UK, or other
countries’ anti-corruption laws.
India Enacts Law Addressing
Corporate Accounting
In August 2013, India’s Companies Bill passed through the
upper house of India’s Parliament and received presidential
assent, replacing the Companies Act of 1956, which had
long been criticized as inadequate.236 The new law seeks
to combat fraud and bribery by providing for, among other
measures, improved auditing standards, whistleblower
protection, and sanctions.237 It also creates the National
Financial Reporting Authority, which will prescribe and
enforce accounting and auditing standards; creates the
National Company Law Tribunal, which will hear certain
cases involving corporations alleged to have violated
the Companies Bill; and grants to India’s Serious Fraud
Investigation Office new tools to arrest suspected violators
and to seize corporate books and papers.238
Chinese Investigations of Suspected
Bribery
Chinese efforts to investigate and prosecute corruption
also have continued in 2013. For example, in addition
to their investigation of pharmaceutical companies,239
Chinese authorities revealed in August 2013 that senior
executives of PetroChina Co. Ltd., the country’s largest
oil and gas distributor, have come under investigation
for “serious disciplinary violations,” which is often
used as shorthand for corruption. News outlets have
reported that the executives under investigation include
the former chairman of PetroChina and its parent,
China National Petroleum Corp., as well as the former
manager of PetroChina’s Indonesian business. PetroChina
shareholders have filed putative class action lawsuits
against PetroChina in New York federal court, alleging
that the company artificially inflated its stock price by
misrepresenting the strength of its corporate policies.240
G20 Leaders Adopt New Anti-Bribery
Principles
At the G-20 Summit in September 2013, the G-20 Anti-
Corruption Working Group released guiding principles
for enforcing foreign bribery offenses, including both
the “Guiding Principles on Enforcement of the Foreign
Bribery Offense” and the “Guiding Principles to Combat
Solicitation.”
The “Guiding Principles on Enforcement of the Foreign
Bribery Offense” call for countries wishing to increase
their anti-bribery regimes to create a robust legislative
framework, with generous statutes of limitations, broad
jurisdiction over the offense, and effective sanctions for
violations; to ensure effective domestic coordination
Global Anti-Corruption Insights | 33
between agencies, as well as appropriate protections
for whistleblowers; and to establish procedures to give
adequate investigative and enforcement powers to law
enforcement authorities.241
The “Guiding Principles to Combat Solicitation” call
for countries to create a legal framework that prohibits
domestic bribery, promotes a strong culture of integrity
in public service, and adopts strict punitive measures for
those who fail to comply; to ensure that there are easily
accessible reporting channels for those who wish to report
bribery offenses; and to engage with the public sector to
fight against solicitation.242
Transparency International Releases Its
2013 Corruption Perceptions Index and
Its Annual Progress Report
In the second half of 2013, Transparency International—a
global non-profit organization headquartered in Berlin,
Germany with over 90 chapters worldwide—released
several reports to further its goal of combating global
corruption and increasing government oversight,
transparency, and accountability. Transparency
International’s Corruption Perceptions Index and its
Annual Progress Report provide insights into how
countries are, or are not, combating corruption.
Transparency International Releases Its
2013 Corruption Perceptions Index
On December 3, 2013, Transparency International released
its 2013 Corruption Perceptions Index, an annual survey
of global corruption that ranks countries from low (very
corrupt) to high (very clean) based on perceptions of public
sector corruption.243 Transparency International prepares its
index using surveys completed by independent institutions
specializing in governance and business climate analysis.244
According to Huguette Labelle, the Chair of Transparency
International, the 2013 Index “demonstrates that all
countries still face the threat of corruption at all levels
of government, from the issuing of local permits to the
enforcement of laws and regulations.”245 Of the 177
countries surveyed—an increase of one (South Sudan) from
2012—just two earned scores within the top 10 percentile:
Denmark and New Zealand, both scoring a 91, up one point
from the year before.246 As with its 2012 Index, more than
two-thirds of the 177 countries in the 2013 Index scored
below 50, which according to Transparency International
“indicates a serious, worldwide corruption problem.”247
Afghanistan, North Korea, and Somalia were this year’s
worst performers, each with scores of 8.
The United States remained in 19th place, once again
earning a score of 73, and the United Kingdom rose to 14th
place, up three spots, with a score of 76.248 With respect
to the so-called “BRICS” countries, only South Africa,
which ranked 46th in the Index, received a score of higher
than 50 (55). Brazil ranked 72nd with a score of 42; Russia
ranked 127th with a score of 28; India ranked 94th with
a score of 36; and China ranked 80th with a score of 40.
Transparency International Releases Its
9th Annual Progress Report
On October 7, 2013, Transparency International’s Working
Group on Bribery released its 9th Annual Progress Report
on OECD Anti-Bribery Convention enforcement by the
Convention’s 40 Parties.249 According to the report, just
eight of the Convention’s signatories are complying with
the terms of the Convention through either active or
moderate enforcement of laws making foreign bribery
a crime. Countries actively enforcing the Convention
are the United States, Germany, United Kingdom, and
Switzerland, which account for a combined 26.2 percent
of the world’s exports. Moderate enforcement of the
Convention was reported for Italy, Australia, Austria,
and Finland, representing 6.1 percent of exports. Limited
enforcement, however, was found in countries including
France, South Africa, and Argentina, while little or no
enforcement was found in countries including Japan,
Russia, Mexico, Brazil, and Turkey.250
The Annual Progress Report also includes the Working
Group on Bribery’s recommendations for increasing
enforcement of the Convention. Those recommendations
include (1) ensuring corporations are held responsible for the
actions of their employees, agents and foreign subsidiaries,
(2) ensuring settlements of enforcement actions are subject
to court approval and published for public review, and (3)
encouraging G20 countries China, India, Indonesia, and
Saudi Arabia, as well as Hong Kong, Malaysia, Singapore,
and Thailand to join the Convention, in view of their
growing involvement in international business.251
Global Anti-Corruption Insights | 34
Developments in the second half of 2013 and the beginning of 2014 confirm that efforts to combat foreign corruption
will continue to make headlines in the US, UK, and around the world in 2014.252
CONCLUSION
Marcus A. Asner
Partner
New York
+1 212.715.1789
[email protected]
John P. Barker
Partner
Washington, DC
+1 202.942.5328
[email protected]
James W. Cooper
Partner
Washington, DC
+1 202.942.6603
[email protected]
John A. Freedman
Partner
Washington, DC
+1 202.942.5316
[email protected]
Drew A. Harker
Partner
Washington, DC
+1 202.942.5022
[email protected]
Kathleen J. Harris
Partner
London
+44(0)20 7786 6100
[email protected]
Keith M. Korenchuk
Partner
Washington, DC
+1 202.942.5817
[email protected]
Maurice A. Leiter
Partner
Los Angeles, CA
+1 213.243.4040
[email protected]
Laura Lester
Counsel
Washington, DC
+1 202.942.6821
[email protected]
Arthur Luk
Partner
Washington, DC
+1 202.942.5393
[email protected]
John N. Nassikas III
Partner
Washington, DC
+1 202.942.6820
[email protected]
Evelina J. Norwinski
Partner
Washington, DC
+1 202.942.6474
[email protected]
Kirk Ogrosky
Partner
Washington, DC
+1 202.942.5330
[email protected]
Philippe A. Oudinot
Senior Attorney
Washington, DC
+1 202.942.5736
[email protected]
Christopher S. Rhee
Partner
Washington, DC
+1 202.942.5524
[email protected]
Michael A. Rubin
Counsel
Washington, DC
+1 202.942.6171
[email protected]
Mara V.J. Senn
Partner
Washington, DC
+1 202.942.6448
[email protected]
Craig A. Stewart
Partner
New York
+1 212.715.1142
[email protected]
Michael D. Trager
Partner
Washington, DC
+1 202.942.6976
[email protected]
Baruch Weiss
Partner
Washington, DC
+1 202.942.6819
[email protected]
Samuel M. Witten
Counsel
Washington, DC
+1 202.942.6115
[email protected]
For further information on anything discussed in FCPA & Global Anti-Corruption
Insights, please contact:
Global Anti-Corruption Insights | 35
Endnotes
1 Press Release, DOJ, Alcoa World Alumina Agrees to Plead Guilty to Foreign Bribery and Pay $223 Million in Fines and Forfeiture (Jan. 9, 2014), available
at http://www.justice.gov/opa/pr/2014/January/14-crm-019.html [hereinafter “DOJ Alcoa Release”].
2 Press Release, SEC, SEC Charges Alcoa With FCPA Violations (Jan. 9, 2014), available at http://www.sec.gov/News/PressRelease/Detail/
PressRelease/1370540596936#.UtCHsdJDu-M [hereinafter “SEC Alcoa Release”]; see also Cease and Desist Order, In the Matter of Alcoa, Inc. (Jan.
9, 2014), available at http://www.sec.gov/litigation/admin/2014/34-71261.pdf. Alcoa’s joint venture partner Alumina Limited is responsible for 37.5%
of the FCPA settlement. See Alumina Ltd., Report of Foreign Issuer (Form 6-K), at 1 (July 9, 2013), available at http://www.sec.gov/Archives/edgar/
data/857071/000119312513285422/d565756d6k.htm.
3 Plea Agreement, ¶ 35, United States v. Alcoa World Alumina LLC, No. 2:14-cr-00007 (W.D. Pa. Jan 9, 2014), available at http://www.post-gazette.com/
attachment/2014/01/09/ALCOA-World-Alumina-Plea-Agreement.pdf [hereinafter “Alcoa World Plea”].
4 See Dionne Searcey and Samuel Rubenfeld, Alcoa Settles RICO Suit with Bahrain Company, Wall St. J. (Oct. 9, 2012), available at http://blogs.wsj.com/
corruption-currents/2012/10/09/alcoa-settles-rico-suit-with-bahrain-company/.
5 See DOJ Alcoa Release; Alcoa World Plea; SEC Alcoa Release.
6 See John W. Miller and Andrew Grossman, Alcoa Affiliate Pleads Guilty to Bribery, Wall Wall St. J. (Jan. 9, 2014), available at http://online.wsj.com/
news/articles/SB10001424052702303393804579310382812824444 (subscription required)
7 See DOJ Alcoa Release.
8 See SEC Alcoa Release.
9 Press Release, DOJ, ADM Subsidiary Pleads Guilty to Conspiracy to Violate the Foreign Corrupt Practices Act (Dec. 20, 2013), available at http://www.
justice.gov/opa/pr/2013/December/13-crm-1356.html [hereinafter “DOJ ADM Release”]; Press Release, SEC, SEC Charges Archer-Daniels-Midland
Company With FCPA Violations (Dec. 20, 2013), available at http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540535139#.UrTJVlKA1dh
[hereinafter “SEC ADM Release”].
10 Complaint, ¶ 12, SEC v. Archer-Daniels-Midland Co., No. 2:13-cv-02279 (C.D. Ill. Dec. 20, 2013), Dkt. Entry 1, available at http://www.sec.gov/litigation/
complaints/2013/comp-pr2013-271.pdf.
11 Id.
12 Id. ¶ 13.
13 Id. ¶¶ 1, 38.
14 Id. ¶¶ 1-2.
15 Id. ¶¶ 3, 37.
16 DOJ ADM Release, supra note 9.
17 Id.
18 Plea Agreement at ¶ 16, United States v. Alfred C. Toepfer Int’l (Ukraine) Ltd., No. 2:13-cr-20062 (C.D. Ill. Dec. 23, 2013), Dkt. Entry 9, available at http://
www.justice.gov/criminal/fraud/fcpa/cases/alfred-c-toepfer-international/acti-plea-agreement.pdf.
19 DOJ ADM Release, supra note 9.
20 DOJ ADM Release, supra note 9.
21 SEC ADM Release, supra note 9.
22 Id.
23 Id.
24 Press Release, FBI, German Engineering Firm Bilfinger Resolves Foreign Corrupt Practices Act Charges and Agrees to Pay $32 Million Criminal Penalty
(Dec. 9, 2013), available at http://www.fbi.gov/washingtondc/press-releases/2013/german-engineering-firm-bilfinger-resolves-foreign-corrupt-practicesact-
charges-and-agrees-to-pay-32-million-criminal-penalty; Press Release, DOJ, German Engineering Firm Bilfinger Resolves Foreign Corrupt Practices
Act Charges and Agrees to Pay $32 Million Criminal Penalty (Dec. 11, 2013), available at http://www.justice.gov/opa/pr/2013/December/13-crm-1297.
html [hereinafter “DOJ Bilfinger Release”].
25 DOJ Bilfinger Release, supra note 24.
26 Information, ¶¶ 19-20, United States v. Bilfinger SE, No. 4:12-cr-00745 (S.D. Tex. Dec. 9, 2013), Dkt. Entry 1, available at http://www.justice.gov/criminal/
fraud/fcpa/cases/bilfinger/bilfinger-information.pdf [hereinafter “Bilfinger Information”].
27 Id. ¶¶ 21a-b.
28 Id. ¶¶ 21b-c.
29 Id. ¶ 21e.
30 Deferred Prosecution Agreement, ¶¶ 5-13, United States v. Bilfinger SE, No. 4:12-cr-00745 (S.D. Tex. Dec. 9, 2013), Dkt. Entry 3, available at http://www.
justice.gov/criminal/fraud/fcpa/cases/bilfinger/bilfinger-dpa.pdf.
31 Deferred Prosecution Agreement, United States v. Willbros Group, Inc., No. 4:08-cr-00287 (S.D. Tex. May 14, 2008), available at http://www.justice.
gov/criminal/fraud/fcpa/cases/willbros-group/05-14-08willbros-deferred.pdf; Order, United States v. Willbros Group, Inc., 4:08-cr-00287 (S.D. Tex.
Apr. 2, 2012), Dkt. Entry 11, available at http://www.justice.gov/criminal/fraud/fcpa/cases/willbros-group/2012-04-02-willbros-group-order-grantingmotion-
to-dismiss.pdf.
Global Anti-Corruption Insights | 36
32 Plea Agreement, United States v. Brown, No. 4:06-cr-00316 (S.D. Tex. Sept. 14, 2006), Dkt. Entry 15, available at http://www.justice.gov/criminal/fraud/
fcpa/cases/brownj/09-14-09brown-plea-agree.pdf.
33 DOJ Bilfinger Release, supra note 24; Press Release, DOJ, Former Willbros International Executives Sentenced to Prison for Their Roles in $6 Million
Foreign Bribery Scheme (Jan. 28, 2010), available at http://www.justice.gov/opa/pr/2010/January/10-crm-102.html [hereinafter “Brown and Steph
Sentencing Release”].
34 Plea Agreement, United States v. Steph, No. 4:07-cr-00307 (S.D. Tex. Nov. 5, 2007), Dkt. Entry 43, available at http://www.justice.gov/criminal/fraud/
fcpa/cases/stephj/11-05-07steph-plea-agree.pdf.
35 Brown and Steph Sentencing Release, supra note 33.
36 Indictment, United States v. Tillery, No. 4:08-cr-00022 (S.D. Tex. Jan. 17, 2008), Dkt. Entry 1, available at http://www.justice.gov/criminal/fraud/fcpa/
cases/tilleryj/01-17-08tillery-indict.pdf; Bilfinger Information, supra note 26, ¶¶ 19-20.
37 DOJ Bilfinger Release, supra note 24.
38 Id.
39 Press Release, SEC, SEC Charges Weatherford International With FCPA Violations (Nov. 26, 2013), available at http://www.sec.gov/News/PressRelease/
Detail/PressRelease/1370540415694 [hereinafter “SEC Weatherford Release”]; see also Press Release, DOJ, Three Subsidiaries of Weatherford International
Limited Agree to Plead Guilty to FCPA and Export Control Violations (Nov. 26, 2013), available at www.justice.gov/opa/pr/2013/November/13-crm-1260.
html [hereinafter “DOJ Weatherford Release”]; Deferred Prosecution Agreement at Attachment A, Statement of Facts, ¶¶ 14-32, United States v. Weatherford
Int’l Ltd., No. 4:13-cr-00733 (S.D. Tex. Nov. 26, 2013), Dkt. Entry 4, available at www.justice.gov/criminal/fraud/fcpa/cases/weatherford-international-ltd/
Weatherford-International-DPA.pdf [hereinafter “Weatherford DPA”]; Complaint, SEC v. Weatherford Int’l Ltd., ¶ 2, No. 4:13-cv-03500 (S.D. Tex. Nov.
26, 2013), Dkt. Entry 1, available at www.sec.gov/litigation/complaints/2013/comp-pr2013-252.pdf [hereinafter “SEC Weatherford Complaint”].
40 Weatherford DPA, supra note 39, at Statement of Facts ¶ 7.
41 Weatherford DPA, supra note 39, at Statement of Facts ¶¶ 15-23; SEC Weatherford Complaint, supra note 39, ¶¶ 11-27.
42 Weatherford DPA, supra note 39, at Statement of Facts ¶¶ 24-28; SEC Weatherford Complaint, supra note 39, ¶¶ 28-35.
43 SEC Weatherford Complaint, supra note 39, ¶ 2; Weatherford DPA, supra note 39, at Statement of Facts ¶ 33.
44 Plea Agreement, United States v. Weatherford Servs., Ltd., No. 4:13-cv-00734 (S.D. Tex. Nov. 26, 2013), Dkt. Entry 4, available at www.justice.gov/
criminal/fraud/fcpa/cases/weatherford-services-ltd/Weatherford-Services-Plea-Agreement.pdf; Weatherford DOJ Release, supra note 39. Under the
plea agreement, Weatherford Services Limited agreed to pay the United States a fine of $420,000, which is the bottom of the fine range calculated under
the United States Sentencing Guidelines. Weatherford’s DPA recognizes that any criminal penalty imposed upon Weatherford Services Limited will be
deducted from Weatherford’s penalty.
45 SEC Weatherford Release, supra note 39; DOJ Weatherford Release, supra note 38; see also SEC Weatherford Complaint, supra note 39, ¶ 52 (alleging
Weatherford and its employees failed to provide complete and accurate information resulting in significant delay by, for example, (1) informing the SEC
staff that an employee was missing or dead when he remained employed by Weatherford, (2) deleting emails prior to the imaging of their computers, and
(3) allowing potentially complicit employees to collect documents subpoenaed by the SEC staff).
46 Weatherford DOJ Release, supra note 39.
47 Press Release, SEC, SEC Charges Stryker Corporation with FCPA Violations (Oct. 24, 2013), available at http://www.sec.gov/News/PressRelease/Detail/
PressRelease/1370540044262.
48 Cease and Desists Order, ¶ 1, In re Stryker Corp., No. 3-15587 (Oct. 24, 2013), available at http://www.sec.gov/litigation/admin/2013/34-70751.pdf
[hereinafter “Stryker Order”].
49 Id. ¶ 1.
50 Id. ¶¶ 6-12.
51 Id. ¶¶ 27-33.
52 Id. ¶ 15.
53 Id. ¶¶ 23-26.
54 Stryker Order, ¶¶ 38-40. According to the Order, “Stryker voluntarily produced documents that permitted the Commission staff to assess how Stryker’s
internal audit and compliance functions used the results of each of the assessments to implement additional enhancements to its infrastructure, to target
jurisdictions for future assessments, and to create management action plans in collaboration with local management.” Id. ¶ 40.
55 Id. ¶ 41.
56 Samuel Rubenfeld, Stryker Corp. Settles FCPA Case, Pays $13 Million, Wall St. J. (Oct. 24, 2013), available at http://blogs.wsj.com/
riskandcompliance/2013/10/24/stryker-corp-settles-fcpa-case-pays-13-million/.
57 Id.
58 Press Release, SEC, SEC Charges Diebold with FCPA Violations in China, Indonesia, and Russia (Oct. 22, 2013), available at http://www.sec.gov/litigation/
litreleases/2013/lr22849.htm [hereinafter “SEC Diebold Release”]; Press Release, DOJ, Diebold Incorporated Resolves Foreign Corrupt Practices Act
Investigation and Agrees to Pay $25.2 Million Criminal Penalty (Oct. 22, 2013), available at http://www.justice.gov/opa/pr/2013/October/13-crm-1118.html.
59 Deferred Prosecution Agreement, United States v. Diebold, Inc., Case No. 5:13CR464 (N.D. Ohio Oct. 22, 2013), Dkt. Entry 1, available at http://www.
justice.gov/criminal/fraud/fcpa/cases/diebold/combined_dpa.pdf.
60 Id. ¶ 6.
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61 Id. ¶ 4.
62 Id. see also SEC Diebold Release, supra note 58; Complaint ¶ 2, SEC v. Diebold, Inc. (D.D.C. Oct. 22, 2013), Dkt. Entry 1, available at http://www.sec.
gov/litigation/complaints/2013/comp-pr2013-225.pdf [hereinafter “SEC Diebold Complaint”].
63 See SEC Diebold Complaint, supra note 62.
64 Id.
65 Guidance at 21.
66 Mary Jacoby, Remarks of Kara Brockmeyer at Annual Conference on the U.S. Foreign Corrupt Practices Act, Main Justice (Nov. 22, 2013), available at
http://www.mainjustice.com/justanticorruption/2013/11/22/remarks-of-kara-brockmeyer-at-annual-conference-on-the-u-s-foreign-corrupt-practices-act/.
67 Press Release, DOJ, Foreign Bribery Charges Unsealed Against Former Chief Executive Officers of Oil Services Company (Jan. 6, 2014), available at
http://www.justice.gov/opa/pr/2014/January/14-crm-007.html [hereinafter “DOJ PetroTiger Release”].
68 Id.; see also Criminal Complaint, United States v. Hammarskjold, Case No. 13-mj-2086 (D.N.J. Nov. 8, 2013), available at http://www.justice.gov/iso/opa/
resources/793201416163330616623.pdf [hereinafter “Hammarskjold Complaint”]; Criminal Complaint, United States v. Sigelman, Case No. 13-mj-2087
(D.N.J. Nov. 8, 2013), available at http://www.justice.gov/iso/opa/resources/964201416163538382506.pdf [hereinafter “Sigelman Complaint”].
69 See Hammarskjold Complaint, supra note 68; Sigelman Complaint, supra note 68.
70 DOJ PetroTiger Release, supra note 67.
71 See Indictment, United States. v. Riedo, Case No. 13CR3789 (S.D. Cal. Oct. 15, 2013), Dkt. Entry 1, available at http://www.justice.gov/criminal/fraud/
fcpa/cases/reidoa/Riedo_Indictment.pdf [hereinafter “Riedo Indictment”].
72 See Deferred Prosecution Agreement, United States v. Maxwell Techs., Inc., Case No. 11CR0329 (S.D. Cal. Jan. 31, 2011), available at http://www.justice.
gov/criminal/fraud/fcpa/cases/maxwell/01-31-11maxwell-tech-dpa.pdf; SEC Charges Maxwell Technologies Inc. for Bribery Scheme in China - Maxwell
to Pay Over $6.3 Million in Disgorgement and Interest, SEC Litigation Release No. 21832 (Jan. 31, 2011), available at https://www.sec.gov/litigation/
litreleases/2011/lr21832.htm.
73 Riedo Indictment, supra note 71, ¶ 7.
74 Id. ¶¶ 17A-L.
75 Id. ¶ 17H.
76 See Samuel Rubenfeld, Venezuelan Bank Official Pleads Guilty to Laundering Bribes, Wall St. J. (Nov. 18, 2013), available at http://blogs.wsj.com/
riskandcompliance/2013/11/18/venezuelan-bank-official-pleads-guilty-to-laundering-bribes/; Press Release, DOJ, Three Former Broker-dealer Employees
Plead Guilty in Manhattan Federal Court to Bribery of Foreign Officials, Money Laundering and Conspiracy to Obstruct Justice (Aug. 30, 2013), available at
http://www.justice.gov/opa/pr/2013/August/13-crm-980.html; Richard Vanderford, Ex-DAP Employees Cop Pleas In FCPA Kickback Cases, Law360 (Aug.
29, 2013), available at http://www.law360.com/newyork/articles/468910?nl_pk=33df8c29-c5d8-476c-9838-48caea2dfb20&utm_source=newsletter&utm_
medium=email&utm_campaign=newyork.
77 See Minute Entry, United States v. De Los Angeles Gonzalez De Hernandez 1:13-cr-00901-PAE-1 (S.D.N.Y. Nov. 18, 2013); Information, United States v.
De Los Angeles Gonzalez De Hernandez 1:13-cr-00901-PAE-1 (S.D.N.Y. Nov. 18, 2013), Dkt. Entry 43.
78 See Oral Order, United States v. De Los Angeles Gonzalez De Hernandez 1:13-cr-00901-PAE-1 (S.D.N.Y. Nov. 18, 2013).
79 Arnold & Porter LLP, FCPA, Bribery Act & Other Global Anti-Corruption Insights (Summer 2013) at 8, available at http://www.arnoldporter.com/
resources/documents/FcpaNewsletterAugust2013.pdf [hereinafter “A&P Summer 2013 FCPA Newsletter”].
80 See Press Release, SEC, SEC Charges Traders in Massive Kickback Scheme Involving Venezuelan Official (May 7, 2013), available at http://www.
sec.gov/news/press/2013/2013-84.htm; Press Release, DOJ, Two U.S. Broker-Dealer Employees And Venezuelan Government Official Charged In
Manhattan Federal Court For Massive International Bribery Scheme (May 7, 2013), available at http://www.justice.gov/usao/nys/pressreleases/May13/
ClarkeetalComplaintPR.php.
81 A&P Summer 2013 FCPA Newsletter, supra note 79, at 8-9; Press Release, DOJ, Foreign Bribery Charges Unsealed Against Current and Former Executives
of French Power Company (Apr. 16, 2013), available at http://www.justice.gov/opa/pr/2013/April/13-crm-434.html [hereinafter “DOJ Alstom Release”].
82 DOJ Alstom Release, supra note 81; see also Plea Agreement, United States v. Pierucci, Crim. No. 3:12CR238 (D. Conn. July 29, 2013), Dkt. Entry 46,
available at http://www.justice.gov/criminal/fraud/fcpa/cases/pieruccif/de46-pierucci-plea-agreement.pdf; Plea Agreement, United States v. Rothschild,
No. 3:12CR223 (D. Conn. Nov. 2, 2012), Dkt. Entry 8, available at http://www.justice.gov/criminal/fraud/fcpa/cases/rothschildd/rothschild-guilty-plea.
pdf.
83 See Superseding Indictment, United States v. Pierucci and Pomponi, Crim. No. 3:12CR238 (D. Conn. Apr. 30, 2013), Dkt. Entry 15, available at http://
www.justice.gov/iso/opa/resources/971201351113654342378.pdf; Press Release, DOJ, Former Executive of French Power Company Subsidiary Charged
in Connection with Foreign Bribery Scheme (May 1, 2013), available at http://www.justice.gov/opa/pr/2013/May/13-crm-496.html; Second Superseding
Indictment, United States v. Hoskins and Pomponi, Crim. No. 3:12CR238 (D. Conn. July 30, 2013), Dkt. Entry 50, available at http://www.justice.gov/
criminal/fraud/fcpa/cases/pomponi/de50-second-superseding-indictment.pdf [hereinafter “Second Pomponi Indictment”].
84 Second Pomponi Indictment, supra note 83.
85 See Mot. for Disclosure of 404B Material, Mot. for Early Disclosure of Gov’t Trial Exhibits, Mot. for Release of Brady Materials, and Mot. for Bill of
Particulars, United States v. Pierucci, Case No. 3:12CR238 (D. Conn. Oct. 8, 2013), Dkt. Entry 68-71.
86 See Mem. in Opp’n, United States v. Pierucci, Case No. 3:12CR238 (D. Conn. Oct. 23, 2013), Dkt. Entry 72.
87 Id.; see also Supplemental Notice of Intent to Offer Evid. Pursuant to F.R.E. 404(b), United States v. Pierucci, Case No. 3:12CR238 (D. Conn. Dec. 18,
2013), Dkt. Entry 86.
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88 Mot. to Continue Jury Selection and Trial, United States v. Pierucci, Case No. 3:12CR238 (D. Conn. Nov. 8, 2013), Dkt. Entry 76.
89 Order, United States v. Pierucci, Case No. 3:12CR238 (D. Conn. Nov. 21, 2013), Dkt. Entry 83.
90 Press Release, Swiss Office of the Attorney General, Criminal proceedings against Alstom entities are brought to a close (Nov. 22, 2011), available at http://
www.news.admin.ch/message/index.html?lang=en&msg-id=42300; see also Christopher M. Matthews, Alstom Executive Arrested on Bribery Charges,
Wall St. J. (Apr. 16, 2013), available at http://online.wsj.com/article/SB10001424127887324345804578427100228043378.html (subscription required).
91 AFP, French firm Alstom in Brazil corruption probe: Report, Yahoo, (Aug. 8, 2013), available at http://au.finance.yahoo.com/news/french-firm-alstombrazil-
corruption-133324579.html (reporting on published report in Estadio de Sao Paolo).
92 Press Release, DOJ, Manhattan U.S. Attorney Announces Arrest Of French Citizen For Obstructing Foreign Bribery And Money Laundering Investigation
(Apr. 15, 2013), available at http://www.justice.gov/usao/nys/pressreleases/April13/FredericCilinsArrestPR.php; see also Samuel Rubenfeld, Trial Date Set
in FCPA Obstruction Case, Wall St. J. (Dec. 6, 2013), available at http://blogs.wsj.com/riskandcompliance/2013/12/06/trial-date-set-in-fcpa-obstructioncase/.
93 See Bob Van Voris, Frenchman Linked to BSG Resources Says Contracts Are Fake, Bloomberg News (Sept. 12, 2013), available at http://www.businessweek.
com/news/2013-09-12/frenchman-linked-to-bsg-resources-says-contracts-are-fake.
94 Ian Cobain, Swiss and French police raid offices linked to billionaire Steinmetz, The Guardian (Aug. 29, 2013), available at http://www.theguardian.com/
world/2013/aug/29/swiss-french-police-raids-linked-beny-steinmetz.
95 See A&P Summer 2013 FCPA Newsletter, supra note 79, at 10-11; Memorandum and Order, SEC v. Straub, No. 11 Civ. 9645 (Feb. 8, 2013), Dkt. Entry 48.
96 See Mem. of Law in Supp. of Defs.’ Joint Mot. to Dismiss the Complaint, SEC v. Straub, No. 11 Civ. 9645 (S.D.N.Y. Oct. 29, 2012), Dkt. Entry 35.
97 Mem. and Order, SEC v. Straub, No. 11 Civ. 9645 (Aug. 5, 2013), Dkt. Entry 68 [hereinafter “Straub Interlocutory Order”].
98 Id. at 4.
99 Straub Interlocutory Order, supra note 97, at 5 (citing SEC v. Sharef, 924 F. Supp. 2d 539).
100 Id. at 4-5 (citing SEC v. Sharef, 924 F. Supp. 2d at 547).
101 Id. at 4-5.
102 Id. at 7-8.
103 Final Judgment as to Defendants Ulrich Bock and Stephan Signer, SEC v. Sharef, No. 11 Civ. 9073 (S.D.N.Y. Feb. 4, 2014), Dkt. Entry 50; see also Mot. for
Default Judgment as to Defendants Ulrich Bock and Stephan Signer, Dkt. Entry 38, and Dkt. Entries 45, 46 (Nov. 16, 2013) (resubmission after withdrawal).
104 Final Judgment as to Defendant Andres Truppel, SEC v. Sharef, No. 11 Civ. 9073 (S.D.N.Y. Feb. 3, 2014), Dkt. Entry 48; Mot. to Withdraw Motion for
Default Judgment, Dkt. Entry 44. As we reported in our last newsletter, two other former Siemens executives—Uriel Sharef and Bernd Regendantz—
previously resolved SEC charges. See A&P Summer 2013 FCPA Newsletter, supra note 79, at 12.
105 Notice of Voluntary Dismissal, SEC v. Sharef, No. 11 Civ. 9073 (S.D.N.Y. Oct. 25, 2013), Dkt. Entry 40.
106 Zach Warren, 11th Circuit primed to issue key FCPA ruling, Inside Counsel (Oct. 16, 2013), available at http://www.insidecounsel.com/2013/10/16/11thcircuit-
primed-to-issue-key-fcpa-ruling; Samuel Rubenfeld, FCPA ‘Foreign Official’ Question Reaches Appellate Spotlight in Esquenazi Case, Wall St.
J. (Oct. 10, 2013), available at http://blogs.wsj.com/riskandcompliance/2013/10/10/fcpa-foreign-official-question-reaches-appellate-spotlight/.
107 Order Denying Petition for a Writ of Certiorari, Green v. United States, 134 S. Ct. 658 (Nov. 11, 2013), available at http://www.supremecourt.gov/Search.
aspx?FileName=/docketfiles/13-472.htm; United States v. Green, 722 F.3d 1146 (9th Cir. 2013).
108 Id. at 1147-48.
109 Id.
110 MVRA, Pub. L. No. 104-132, § 204, 110 Stat. 1214, 1227 (codified principally at 18 U.S.C. §§ 3663A and 3664) (MVRA).
111 Id.
112 530 U.S. 466, 490 (2000).
113 — U.S. —, 132 S. Ct. 2344, 2357 (2012).
114 Green, 722 F.3d. at 1149-51.
115 Id. at 1150.
116 Id. at 1151.
117 Remarks of Charles Duross and Kara Brockmeyer at the ABA’s 2013 FCPA Conference, Main Justice (Oct. 2, 2013), available at http://www.mainjustice.
com/justanticorruption/2013/10/02/remarks-of-charles-duross-and-kara-brockmeyer-at-the-abas-2013-fcpa-conference/.
118 Brian Mahoney, Expect More Big FCPA Cases In 2014: DOJ, SEC Officials, Law360 (Nov. 19, 2013), available at http://www.law360.com/articles/489940/
doj-sec-officials-say-more-major-fcpa-cases-coming-in-2014.
119 Brian Mahoney, FCPA Crackdown Relies On Business Attys, Deputy AG Says, Law360 (Nov. 19 2013), available at http://www.law360.com/
internationaltrade/articles/490063/fcpa-crackdown-relies-on-business-attys-deputy-ag-says-.
120 Id.
121 Andrew Ramonas, FCPA Partnership Efforts Take DOJ to Mexico, Brazil, Law.com: Corporate Counsel (Nov. 20, 2013), available at http://www.law.
com/corporatecounsel/PubArticleCC.jsp?id=1202628867255&FCPA_Partnership_Efforts_Take_DOJ_to_Mexico_Brazil&slreturn=20131026172519.
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122 Andrew Ceresney, Co-Director of the Division of Enforcement, SEC, Keynote Address at the International Conference on the Foreign Corrupt Practices
Act (Nov. 19, 2013), available at http://www.sec.gov/News/Speech/Detail/Speech/1370540392284.
123 Justice Dep’t Opinion Procedure Release No. 13-01 (Dec. 19, 2012), available at http://www.justice.gov/criminal/fraud/fcpa/opinion/2013/13-01.pdf.
124 Adam Jordan, Shanghai Pharma opens bribery probe after whistleblower report, Reuters (Dec. 17, 2013), available at http://www.reuters.com/
article/2013/12/17/shanghaipharma-corruption-idUSL3N0JW1CS20131217; China: A Risky Bet for Drug Makers, Wall St. J. (Oct. 21, 2013), available at
http://blogs.wsj.com/chinarealtime/2013/10/21/china-an-increasingly-risky-bet-for-drug-makers.
125 Christopher Matthews and Jessica Hodgson, GlaxoSmithKline Probes Bribe Allegations in China, Wall St. J. (June 12, 2013), available at
http://online.wsj.com/news/articles/SB10001424127887324798904578529413574312372. (subscription required)
126 David Voreacos, China’s Briber y Culture Poses Risk s for Multinationals, Bloomberg News ( Nov. 21, 2013), available at
http://www.bloomberg.com/news/2013-11-21/china-s-bribery-culture-poses-risks-for-multinationals.html.
127 See, e.g., Complaint, ¶ 15, SEC v. Pfizer Inc., 1:12-cv-01303 (D.D.C. Aug. 7, 2012), available at http://www.sec.gov/litigation/complaints/2012/comp-pr2012-152-pfizer.pdf
(“In those countries with national healthcare systems, hospitals, clinics, pharmacies, doctors, and other healthcare professionals and institutions are
generally government officials or instrumentalities within the meaning of the FCPA.”).
128 NHFPC, Provisions on the Establishment of Commercial Bribery Records in the Purchase and Sale of Medicines (Dec. 25, 2013), available at http://www.
nhfpc.gov.cn/fzs/s3577/201312/ef92cb05dee341a18fff7b3e00eb1156.shtml [Chinese].
129 NHFPC, Nine Prohibitions for Strengthening the Healthcare Industry’s Ethics (Dec. 26, 2013), available at http://www.nhfpc.gov.cn/jcj/s3577/201312/0
9bd7a8be8f8420d91997a0041aa868e.shtml [Chinese].
130 Ben Protess and Jessica Silver-Greenberg, On Defensive, JPMorgan Hired China’s Elite, N.Y. Times (Dec. 29, 2013), available at http://dealbook.nytimes.
com/2013/12/29/on-defensive-jpmorgan-hired-chinas-elite/ [hereinafter “JPMorgan China Article”]; Justin Baer and Christopher M. Matthews, Morgan
Stanley and Citi Got SEC Inquiries on Foreign Hiring, Wall St. J. (Nov. 26, 2013), available at http://online.wsj.com/news/articles/SB100014240527023
03281504579222650642701942.
131 JPMorgan China Article, supra note 130.
132 Id.; see also, e.g., David Barboza, Many Wall St. Banks Woo Children of Chinese Leaders, N.Y. Times (Aug.20, 2013), available at http://dealbook.nytimes.
com/2013/08/20/many-wall-st-banks-woo-children-of-chinese-leaders/ [hereinafter “Barboza Wall St. Banks Article”].
133 Barboza Wall St. Banks Article, supra note 132.
134 Id.
135 Anheuser-Busch InBev SA/NV, Report of Foreign Private Issuer (Form 6-K), at 23 (July 31, 2013), available at http://www.sec.gov/Archives/edgar/
data/1140467/000119312513311563/0001193125-13-311563-index.htm.
136 Wal-Mart, Quarterly Report (Form 10-Q/A), at 15 (Oct. 21, 2013), available at http://www.sec.gov/Archives/edgar/data/104169/000010416913000039/
wmt7311310-q.htm [hereinafter “Wal-Mart 10/21/13 10-Q”]; Wal-Mart, Quarterly Report (Form 10-Q), at 15 (Dec. 6, 2013), available at http://www.sec.
gov/Archives/edgar/data/104169/000010416913000051/wmt10311310-q.htm [hereinafter “Wal-Mart 12/6/13 10-Q”].
137 Aruna Viswanatha, Wal-Mart pays lawyer fees for dozens of executives in bribery probe, Reuters (Dec. 4, 2013), available at http://www.reuters.com/
article/2013/12/04/us-walmart-bribery-lawyers-idUSBRE9B305W20131204.
138 Wal-Mart 10/21/13 10-Q at 15; Wal-Mart 12/6/13 10-Q at 15.
139 Press Release, Wal-Mart, Bharti Enterprises and Wal-Mart Stores, Inc. Announce Agreement to Independently Own and Operate Separate Business
Formats in India (Oct. 9, 2013), available at http://news.walmart.com/news-archive/2013/10/09/bharti-enterprises-walmart-stores-inc-announce-agreementto-
independently-own-operate-separate-business-formats-in-india.
140 Embraer S.A., Report of Foreign Issuer (Form 6-K), at 9 (Oct. 31, 2013), available at http://ri.embraer.com.br/show.aspx?idCanal=ot7Nt0WpZOINWPlkPZrBOw==.
141 Joe Palazzolo and Paulo Winterstein, Plane Maker Embraer Faces Bribery Inquiries, Wall St. J. (Nov. 1, 2013), available at http://online.wsj.com/news/
articles/SB10001424052702303618904579172070636222040.
142 Brad Haynes and Aruna Viswanatha, Embraer investigated for bribery in Argentine, Dominican deals, Reuters (Nov. 2, 2013), available at http://www.
reuters.com/article/2013/11/02/us-embraer-probe-idUSBRE9A100W20131102.
143 Christopher M. Matthews and Shira Ovide, Microsoft Bribe Probe Reaches into Pakistan, Russia Deals, Wall St. J. (Aug. 21, 2013), available at
http://online.wsj.com/news/articles/SB10001424127887324619504579027200320722342#.
144 Layne Christensen Co., Quarterly Report (Form 10-Q), at 24 (Dec. 10, 2013), available at http://investor.laynechristensen.com/secfiling.cfm?filingID=1193125-
13-467033&CIK=888504.
145 Owens-Illinois, Inc., Quarterly Report (Form 10-Q), at 19 (July 25, 2013), available at http://services.corporate-ir.net/SEC.Enhanced/SecCapsule.
aspx?c=88324&fid=8930683.
146 The Allied Defense Grp., Inc., Quarterly Report (Form 10-Q), at 13 (Aug. 14, 2013), available at http://www.sec.gov/Archives/edgar/
data/3952/000119312513333545/d544799d10q.htm.
147 Eni S.p.A., Report of Foreign Issuer (Form 6-K), at 113 (Sept. 3, 2013), available at http://www.sec.gov/Archives/edgar/data/1002242/000131143513000011/
sj0813en6k.htm.
148 Mead Johnson Nutrition Co., Quarterly Report (Form 10-Q), at 17 (Oct. 24, 2013), available at http://www.sec.gov/Archives/edgar/
data/1452575/000145257513000015/form10-qx3q20139302013.htm#sA96ACEB73C1F95CE3CFA78F4C1A51B7B; see also Drew Armstrong, Baby Food
Maker Mead Johnson Opens China Bribery Probe, Bloomberg (Oct. 24, 2013), available at http://www.bloomberg.com/news/2013-10-24/baby-foodmaker-
mead-johnson-opens-internal-china-bribery-probe.html.
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149 Christopher M. Matthews, SEC Investigates Gold Fields For South African Deal, Wall St. J. (Sept. 12, 2013), available at http://blogs.wsj.com/
riskandcompliance/2013/09/12/sec-investigates-miner-gold-fields-for-south-african-deal/.
150 David Dolan and Ed Stoddard, South Africa’s Gold Fields says under U.S. SEC investigation, Reuters (Sept. 10, 2013), available at http://www.reuters.
com/article/2013/09/10/us-safrica-goldfields-idUSBRE9890JX20130910.
151 Hyperdynamics Corp., Quarterly Report (Form 10-Q), at 16 (Nov. 12, 2013), available at http://investors.hyperdynamics.com/secfiling.
cfm?filingID=1104659-13-83334.
152 Park Ohio Holdings Corp., Quarterly Report (Form 10-Q), at 16 (Nov. 12, 2013), available at http://www.sec.gov/Archives/edgar/
data/76282/000007628213000058/pkoh20130930-10q.htm.
153 See Press Release, SEC, Enforcement Co-Director George Canellos to Leave SEC (Jan. 3, 2014), available at http://www.sec.gov/News/PressRelease/
Detail/PressRelease/1370540587386#.UssUJtJDu-M.
154 See Press Release, SEC, SEC Rewards Whistleblower With $150,000 Payout (Oct. 30, 2013), available at http://www.sec.gov/News/PressRelease/Detail/
PressRelease/1370540158194#.UswSv9JDst0; Press Release, SEC, SEC Awards More Than $14 Million to Whistleblower (Oct. 1, 2013), available at
http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539854258#.UswUpdJDst1.
155 U.S. Securities and Exchange Commission, 2013 Annual Report to Congress on the Dodd-Frank Whistleblower Program 8 and Appendix B (Nov. 15,
2013), available at http://www.sec.gov/about/offices/owb/annual-report-2013.pdf.
156 See Carreras, Aldo Omar and others regarding defrauding of the public administration, Case Number 2.645/98 pending in the National Federal Criminal
and Correctional Court, Number 4 (Dec. 27, 2013), which is accessible through a link available at http://www.cij.gov.ar/nota-12824-Caso-Siemens--eljuez-
Ariel-Lijo-dispuso-el-procesamiento-de-diecisiete-imputados-por-el-delito-de-cohecho-activo.html (Spanish) [hereafter “Siemens Argentine Case”];
see also SEC v. Sharef, No. 11 Civ. 9073; United States v. Sharef, No. 1:11-CR-01056.
157 Former Siemens Executive Uriel Sharef Settles Bribery Charges, SEC Litigation Release No. 22676 (Apr. 16, 2013), available at http://www.sec.gov/
litigation/litreleases/2013/lr22676.htm; see also Final Judgment, SEC v. Sharef, No. 11 Civ. 9073 (S.D.N.Y. Apr. 16, 2013), Dkt. Entry 36.
158 Siemens Argentine Case, supra note 157; see also SEC Charges Seven Former Siemens Executives with Bribing Leaders in Argentina, SEC Litigation
Release No. 22190 (Dec. 13, 2011), available at http://www.sec.gov/litigation/litreleases/2011/lr22190.htm.
159 Associated Press, Siemens subsidiary fined over Russian bribes (Nov. 12, 2013), available at http://bigstory.ap.org/article/siemens-subsidiary-fined-overrussian-
bribes.
160 See Liam Moloney, Eni Repeats No Irregularities by CEO, Company in Algeria Probe, Wall St. J. (Dec. 4, 2013), available at http://online.wsj.
com/article/BT-CO-20131204-708670.html; AFP, Chekib Khelil: Algeria ex-minister wanted for corruption, Fox News (Aug. 13, 2013), available at
http://www.foxnews.com/world/2013/08/13/chekib-khelil-algeria-ex-minister-wanted-for-corruption/.
161 See Securities and Exchange Commission v. ENI, S.p.A. and Snamprogetti Netherlands, B.V., Case No. 4:10-cv-02414, S.D. Tex. (Houston), SEC Litigation
Release No. 21588 (July 7, 2010), available at http://www.sec.gov/litigation/litreleases/2010/lr21588.htm.
162 Am. Petroleum Inst. v. SEC, -- F. Supp. 2d --, 2013 WL 3307114, at *6 (D.D.C. July 2, 2013).
163 Disclosure of Payments by Resource Extraction Issuers, 77 Fed. Reg. 56,365 (Sept. 12, 2012).
164 Id. at 56,398.
165 Am. Petroleum Inst., 2013 WL 3307114, at *12.
166 Am. Petroleum Inst., 2013 WL 3307114, at *13.
167 Id. at *15.
168 For a lengthier discussion of the issues, see Federal Court Vacates SEC’s Extraction Payment Disclosure Rule, Arnold & Porter LLP Advisory (July 8,
2013), available at http://www.arnoldporter.com/publications.cfm?action=advisory&u=FederalCourtVacatesSECsExtractionPaymentDisclosureRule&
id=1047.
169 Asadi v. G.E. Energy (USA), L.L.C., 720 F.3d 620 (5th Cir. 2013).
170 Id. at 621.
171 Asadi v. G.E. Energy (USA) LLC, Civ. A. No. 4;12-345, 2012 WL 2522599 (S.D. Tex. June 28, 2012).
172 720 F.3d at 625.
173 Id.
174 Id. at 629-30 (discussing 17 C.F.R. § 240.21F-2(b)(1)).
175 See A&P Summer 2013 FCPA Newsletter, supra note 79, at 26.
176 Wynn Resorts, Ltd., Quarterly Report (Form 10-Q), at 26 (Nov. 12, 2013), available at http://www.sec.gov/Archives/edgar/data/1174922/000119312513438301/
d599412d10q.htm.
177 The federal cases were consolidated and the consolidated case is Moradi v. Adelson, et al., No. 2:11-cv-490 (D. Nev.). The consolidated state case is
Kohanim v. Adelson, et al., No. A-11-636656-B (Nev.).
178 Las Vegas Sands Corp., Quarterly Report (Form 10-Q) at 20, (Nov. 11, 2013), available at http://www.sec.gov/Archives/edgar/data/1300514/000119312513431316/
d601184d10q.htm.
179 Press Release, United States House of Representatives Judiciary Committee, House Judiciary Committee Creates Bipartisan Task Force on Over-
Criminalization (May 5, 2013), available at http://judiciary.house.gov/index.cfm/press-releases?ID=1B5BE8BE-FFD6-6D66-5887-4B51307CAF64.
Global Anti-Corruption Insights | 41
180 Defining the Problem and Scope of Over-Crimilization and Over-Federalization: Hearing Before Task Force on Over-Criminalization of the H. Comm.
on the Judiciary, 113th Cong. (June 14, 2013) (Prepared Statement of George J. Terwilliger III, Partner at Morgan, Lewis & Bockius LLP), available at
http://judiciary.house.gov/_files/hearings/113th/06142013/Terwilliger%2006142013.pdf.
181 Defining the Problem and Scope of Over-Crimilization and Over-Federalization: Hearing Before Task Force on Over-Criminalization of the H. Comm.
on the Judiciary, 113th Cong. (June 14, 2013) (Written Statement of Steven D. Benjamin, President, Nat’l Assoc. of Crim. Defense Lawyers), available at
http://judiciary.house.gov/_files/hearings/113th/06142013/Benjamin%2006142013.pdf.
182 Mens Rea: The Need for a Meaningful Intent Requirement in Federal Criminal Law: Hearing Before Task Force on Over-Criminalization of the H. Comm.
on the Judiciary, 113th Cong (July 19, 2013) (Testimony, Dr. John S. Baker, Jr.), available at http://judiciary.house.gov/_files/hearings/113th/07192013/
Baker%2007192013.pdf.
183 Press Release, SFO, Bruce Hall and Victor Dahdaleh\ (Dec. 10, 2013), available at http://www.sfo.gov.uk/our-work/our-cases/case-progress/bruce-halland-
victor-dahdaleh.aspx. See supra II.A.1 for a discussion of the recently resolved Alcoa matter.
184 Id.
185 Id.
186 Jane Croft and Caroline Binham, Victor Dahdaleh corruption trial collapses, Fin. Times (Dec. 10, 2013), available at http://www.ft.com/cms/s/0/8337c2a6-
6195-11e3-b7f1-00144feabdc0.html#axzz2qNosxVfo [hereinafter “FT Dahdaleh Article”]; Tom Harper, Victor Dahdaleh corruption case: Billionaire’s
fraud trial collapses after key SFO witnesses refuse to give testimony, The Independent (Dec. 10, 2013), available at http://www.independent.co.uk/
news/business/news/victor-dahdaleh-corruption-case-billionaires-fraud-trial-collapses-after-key-sfo-witnesses-refuse-to-give-evidence-8995972.html
[hereinafter “Independent Dahdaleh Article”].
187 Independent Dahdaleh Article, supra note 187.
188 See Nick Goodway, Tchenguiz brothers poised to sue accountants Grant Thornton, London Evening Standard (July 26, 2013), available at
http://www.standard.co.uk/business/business-news/tchenguiz-brothers-poised-to-sue-accountants-grant-thornton-8733901.html,
189 See 2013 Summer FCPA Newsletter, supra note 79, at 31.
190 Press Release, SFO, Four charged in ‘bio fuel’ investigation (Aug. 14, 2013), available at
http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2013/four-charged-in-bio-fuel-investigation.aspx.
191 Press Release, SFO, Sustainable Agroenergy Plc and Sustainable Wealth Investments UK Ltd (Nov. 15, 2013), available at http://www.sfo.gov.uk/ourwork/
our-cases/case-progress/sustainable-agroenergy-plc-and-sustainable-wealth-investments-uk-ltd.aspx.
192 Jo Francis, Security printer charged with corruption, Print Week (Oct. 24, 2013), available at http://www.printweek.com/print-week/news/1139827/
security-printer-charged-corruption.
193 Press Release, SFO, Printing Company Corruption Charges (Oct. 23, 2013) available at http://www.sfo.gov.uk/press-room/latest-press-releases/pressreleases-
2013/printing-company-corruption-charges.aspx
194 David Green, Speech to Cambridge Symposium (Sept. 2, 2013) available at http://goo.gl/GGPfNv [hereinafter “Green Cambridge Speech”].
195 Press Release, SFO, Statement - Rolls Royce (Dec. 23, 2013), available at http://www.sfo.gov.uk/press-room/latest-press-releases/press-releases-2013/
statement---rolls-royce.aspx.
196 See A&P Summer 2013 FCPA Newsletter, supra note 79, at 31-32.
197 FCA Final Notice 2013: JLT Specialty Limited (Dec. 19, 2013), available at http://www.fca.org.uk/your-fca/documents/final-notices/2013/jlt-specialtylimited.
198 Id.
199 Green Cambridge Speech, supra note 195.
200 David Green, Director of SFO, Speech before the Pinsent Masons and Legal Week Regulatory Reform and Enforcement Conference (Oct. 24, 2013), available
at http://www.sfo.gov.uk/about-us/our-views/director’s-speeches/speeches-2013/pinsent-masons-and-legal-week-regulatory-reform-and-enforcement-conference-.aspx.
201 See NCA website, available at http://www.nationalcrimeagency.gov.uk/.
202 Philip Johnston, The National Crime Agency: Does Britain need an FBI?, The Telegraph (Oct. 7, 2013) available at http://www.telegraph.co.uk/news/
uknews/law-and-order/10361009/The-National-Crime-Agency-Does-Britain-need-an-FBI.html.
203 Home Department, Serious and Organised Crime Strategy 61 (Oct. 2013), https://www.gov.uk/government/publications/serious-organised-crime-strategy.
204 Id.
205 Id. at 61.
206 R. v. Karigar, 2013 ONSC 5199, available at http://www.canlii.org/en/on/onsc/doc/2013/2013onsc5199/2013onsc5199.html; Chloé Fedio, Businessman
guilty of bribing Indian officials; Nazir Karigar first person convicted under foreign anti-corruption law, Ottawa Citizen (Aug. 16, 2013), available at
http://www.vancouverdesi.com/news/businessman-guilty-of-bribing-indian-officials-nazir-karigar-first-person-convicted-under-foreign-anti-corruptionlaw/
609049/ [hereinafter “Karigar Article”].
207 Karigar Article, supra note 207.
208 Id.; R. v. Karigar, 2013 ONSC 5199, supra note 206; Mark Brownlee, Man pleads not guilty at bribery trial; Accused allegedly tried to get Air India contract,
Postmedia News (Sept. 25, 2013), available at http://www.vancouverdesi.com/news/courts-man-pleads-not-guilty-to-bribing-air-india-officials/313729/.
209 R. v. Karigar, 2013 ONSC 5199.
Global Anti-Corruption Insights | 42
210 Id.; PM gives clean chit to Praful Patel, Fin. Express, (Feb. 16, 2012), available at http://www.financialexpress.com/news/pm-gives-clean-chit-to-prafulpatel/
912582; Karigar Article, supra note 207.
211 Karigar Article, supra note 207.
212 See A&P Summer 2013 FCPA Newsletter, supra note 79, at 33.
213 Accused SNC-Lavalin execs appear in Toronto court, Reuters (June 26, 2013), available at http://in.reuters.com/article/2012/06/25/snc-briberyidINL2E8HP5MO20120625.
214 See Press Release, The World Bank, World Bank Debars SNC-Lavalin Inc. and its Affiliates for 10 years, The World Bank Group (Apr. 17, 2013), available
at http://www.worldbank.org/en/news/press-release/2013/04/17/world-bank-debars-snc-lavalin-inc-and-its-affiliates-for-ten-years.
215 Canadian Police charge SNC exec with bribery over Bangladesh project, Reuters (Sept. 18, 2013), available at http://www.reuters.com/article/2013/09/18/
snc-lavalin-bribery-idUSL2N0HE0YW20130918.
216 Sophie Cousineau and Greg McArthur, Former SNC-Lavalin executive funnelled $160-million to Gadhafi son, RCMP says, The Globe and Mail (Jan.
25, 2013), available at http://www.theglobeandmail.com/news/national/former-snc-lavalin-exec-funnelled-160-million-to-gadhafi-son-rcmp-says/
article7865504/ [hereinafter “SNC-Lavalin Gadhafi Article”].
217 Id.; Graeme Smith, SNC-Lavalin developed close relationship with Gadhafi son: documents, The Globe and Mail (Jan. 14, 2012), available at http://www.
theglobeandmail.com/news/world/snc-lavalin-developed-close-relationship-with-gadhafi-son-documents/article4197566/.
218 John Nicol and Dave Seglins, SNC-Lavalin letter says Gadhafi son was offered VP post, CBCNews (May 23, 2013), available at http://www.cbc.ca/news/
canada/snc-lavalin-letter-says-gadhafi-son-was-offered-vp-post-1.1343262.
219 SNC-Lavalin Gadhafi Article, supra note 218.
220 Catherine McLean and Stewart Bell, Former SNC-Lavalin executive Riadh Ben Aissa returning to Canada to face fraud, bribery and money laundering
charges, National Post (Sept. 25, 2013), available at http://news.nationalpost.com/2013/09/25/former-snc-lavalin-executive-riadh-ben-aissa-returning-tocanada-
to-face-fraud-bribery-and-money-laundering-charges/.
221 Dave Seglins and John Nicol, SNC-Lavalin offices in Algeria raided amid bribery probe, CBC (June 3, 2013), available at http://www.cbc.ca/news/canada/
snc-lavalin-offices-in-algeria-raided-amid-bribery-probe-1.1348485.
222 Id.
223 Press Release, SNC-Lavalin, SNC-Lavalin Offers Amnesty To Current Employees In Exchange For Cooperation (May 27, 2013), available at
http://www.snclavalin.com/news.php?lang=en&id=2104.
224 Press Release, SNC-Lavalin, Toward Ethics And Compliance Excellence: SNC-Lavalin Announces Latest Measures (Sept. 30, 2013), available at
http://www.snclavalin.com/news.php?lang=en&id=2233.
225 Securities and Exchange Surveillance Commission, Recommendation for Administrative Action based on Findings of the Inspection of Deutsche Securities
Inc. (Dec. 5, 2013), available at http://www.fsa.go.jp/sesc/english/news/reco/20131205-1.htm; Nathan Layne, Exclusive: Japan regulator probing Deutsche
Bank entertainment of pension clients - sources, Reuters (Sept. 9, 2013), available at http://www.reuters.com/article/2013/09/09/us-deutsche-japan-probeidUSBRE9880CF20130909
[hereinafter “Layne DB Entertainment Article”]; Takahiko Hyuga and Takako Taniguchi, Deutsche Securities Said to Face
Penalty in Japan, Bloomberg (Dec. 4, 2013), available at http://www.bloomberg.com/news/2013-12-04/deutsche-securities-said-to-face-penalty-in-japan.html.
226 Layne DB Entertainment Article, supra note 227.
227 Alice Ross and Daniel Schäfer, Deutsche Bank in Tokyo anti-bribery probe, Fin. Times (Sept. 9, 2013), available at http://www.ft.com/intl/cms/s/0/13afcb90-
1974-11e3-80ec-00144feab7de.html.
228 Atsuko Fukase, Japan SESC Asks for Sanction on Deutsche Securities, Wall St. J. (Dec. 5, 2013), available at http://online.wsj.com/news/articles/SB100
01424052702304096104579238952738814392.
229 Tokyo police arrest Deutsche Sec employee, client on suspected bribery, Reuters (Dec. 5, 2013), available at http://www.reuters.com/article/2013/12/05/
deutsche-japan-bribe-idUSL4N0JK05M20131205; Takahiko Hyuga, Deutsche Bank Tokyo Employee Arrested as Firm Faces Penalty, Wash. Post (Dec.
5, 2013), available at http://washpost.bloomberg.com/Story?docId=1376-MXB3KP6JTSEK01-7DRGITKRHR5IPEH1UV7M5S138H.
230 Atsuko Fukase, Japan FSA: Have Issued Business Improvement Order to Deutsche Securities, Wall St. J. (Dec. 12, 2013), available at
http://online.wsj.com/article/DN-CO-20131212-001248.html.
231 Takahiko Hyuga and Takako Taniguchi, Deutsche Bank Unit Cuts Pay for Five Executives on Japan Penalty, Bloomberg (Dec. 12, 2013), available at
http://www.bloomberg.com/news/2013-12-12/deutsche-bank-unit-cuts-pay-for-five-executives-on-japan-penalty.html.
232 See A&P Summer 2013 FCPA Newsletter, supra note 79, at 34. For a detailed discussion of Brazil’s Clean Company Act, see K. Korenchuk, M. Asner,
S. Witten, and B. Spiewak, Responding to Anti-Corruption Concerns in Brazil: Considerations for the Pharmaceutical and Medical Device Sectors,
Pharmaceutical Compliance Monitor (Jan. 2, 2014), available at http://www.pharmacompliancemonitor.com/responding-to-anti-corruption-concerns-inbrazil-
considerations-for-the-pharmaceutical-and-medical-device-sectors/6069/.
233 Siemens bribery case spreads to Brazilian politics, Deutsche Welle (Dec. 3, 2013), available at http://www.dw.de/siemens-bribery-case-spreads-tobrazilian-
politics/a-17268276.
234 Brazil freezes assets tied to Alstom, Siemens price-fixing claims, Agence France-Presse (Nov. 9, 2013), available at http://www.globalpost.com/dispatch/
news/afp/131109/brazil-freezes-assets-tied-alstom-siemens-price-fixing-claims.
235 The text of the resolution is available in Russian at http://www.rg.ru/2013/07/17/verhovny-sud-dok.html. For a detailed discussion of Russia’s anti-corruption
law, see K. Korenchuk, M. Asner, S. Witten, and J. Wiesner, Doing Business in Russia: Managing Anti-Corruption Risk, Pharmaceutical Compliance
Monitor (Nov. 26, 2013), available at http://www.pharmacompliancemonitor.com/doing-business-in-russia-managing-anti-corruption-risks/5963/.
Global Anti-Corruption Insights | 43
236 See Parliament passes Companies Bill 2012 (Update), Asian News Int’l (Aug. 8, 2013), available at http://in.news.yahoo.com/parliament-passes-companiesbill-
2012-155346651.html; Companies Bill 2013 receives President’s assent, The Indian Express (Aug. 31, 2013), available at http://www.indianexpress.
com/news/companies-bill-2013-receives-presidents-assent/1162742/.
237 Jen Swanson, India Seeks to Overhaul a Corporate World Rife with Fraud, N.Y. Times (Aug. 15, 2013), available at http://dealbook.nytimes.com/2013/08/15/
india-seeks-to-overhaul-a-corporate-world-rife-with-fraud/?_r=0.
238 For additional information about anti-corruption developments in India, see K. Korenchuk, M. Asner, S. Witten, and M. Davar, Developing an India Strategy:
Practical Considerations to Seek Opportunities and Mitigate Corruption Risks in the Medical Products Sector, Pharmaceutical Compliance Monitor
(Nov. 1, 2013), available at http://www.pharmacompliancemonitor.com/developing-an-india-strategy-practical-considerations-to-seek-opportunities-andmitigate-
corruption-risks-in-the-medical-products-sector/5803/.
239 For additional information about the Chinese government’s investigation, see K. Korenchuk, M. Asner, and S. Witten, Responding to Anti-Corruption
Compliance Challenges in China: The Way Forward in Light of the Ongoing Investigations in the Pharmaceutical Industry, Pharmaceutical Compliance
Monitor (Sept. 26, 2013), available at http://www.pharmacompliancemonitor.com/responding-to-anti-corruption-compliance-challenges-in-china-theway-
forward-in-light-of-the-ongoing-investigations-in-the-pharmaceutical-industry/5571/.
240 See China questions two more PetroChina parent officials in graft probe: sources, Reuters (Dec. 17, 2013), available at http://www.reuters.com/
article/2013/12/17/us-china-cnpc-corruption-idUSBRE9BG02W20131217; Charlie Zhu and Chen Aizhu, PetroChina’s former Indonesia chief under
investigation: sources, Reuters (Oct. 16, 2013), available at http://www.reuters.com/article/2013/10/16/us-petrochina-corruption-idUSBRE99F0EI20131016;
Kathryn Brenzel, PetroChina Says Reports Of New Corruption Probe Are False, Law360 (Sept. 9, 2013), available at http://www.law360.com/securities/
articles/470923?nl_pk=f5bd3fb5-b0c5-48b0-bf1e-f79cceb607c7&utm_source=newsletter&utm_medium=email&utm_campaign=securities.
241 G20 Guiding Principles on Enforcement of the Foreign Bribery Offence, available at www.en.g20russia.ru/load/783340272.
242 G20 Guiding Principles to Combat Solicitation, available at www.en.g20russia.ru/load/783340276.
243 Transparency Int’l, 2013 Corruption Perceptions Index (Dec. 3, 2013), available at http://www.transparency.org/cpi2013/results [hereinafter “Corruption
Perceptions Index”].
244 Transparency Int’l, Corruption Perceptions Index: In Detail (Dec. 3, 2013), available at http://cpi.transparency.org/cpi2013/in_detail/#myAnchor1.
245 Press Release, Transparency Int’l, Corruption Perceptions Index: Corruption Around the World in 2013 (Dec. 3, 2013), available at http://cpi.transparency.
org/cpi2013/press/.
246 Corruption Perceptions Index, supra note 245.
247 Id.
248 Id.
249 Transparency Int’l, Exporting Corruption: Progress Report 2013: Enforcement of the OECD Convention On Combating Foreign Bribery (Oct. 7, 2013),
available at http://issuu.com/transparencyinternational/docs/2013_exportingcorruption_oecdprogre.
250 Id. at 4-5.
251 Id. at 10-11.
252 We thank Davina Banks, Daniel Bernstein, Alex J. Berz, Brittany E. Hamelers, Dorian L. Hurley, Ryan M. Keats, Meghan C. Martin, Brittany McClure,
Lucy S. McMillan, James McSweeney, Tatiana Medyanik, William W. Miller, Alexandra L. Mitter, Daniel T. Ostrow, Carmela Romeo, Jocelyn Wiesner,
Tara Williamson, and Nellie C. Wigfall for their contributions to this publication.
Global Anti-Corruption Insights | 44
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