International Law

Juiced Up Enforcement

Posted on August 12, 2009
For those who missed the FCPA enforcement news during the recent hyper-active stretch, here's what happened:July 28 -- Label-maker Avery Dennison Corporation resolved civil and administrative charges brought by the Securities and Exchange Commission. The SEC filed settled enforcement actions in the United States District Court for the Central District of California charging Avery with violating the FCPA's books and records and internal controls provisions...

An Abundance Of Caution

Posted on August 11, 2009
The Justice Department last week issued its first Foreign Corrupt Practices Act Opinion Procedure Release of the year. No. 09-01 concerns a medical device maker wanting to introduce its product to a foreign government. The Requestor is a U.S. company that's a "domestic concern" -- which probably means a privately-held firm...

Prosecuting Private Overseas Corruption

Posted on August 10, 2009
Hold on. When did the United States criminalize commercial overseas bribery? We're not talking about bribes to foreign officials under the Foreign Corrupt Practices Act.* But bribes overseas to private parties. When did that become a federal offense? Well, it happened this year when the Justice Department indicted California valve-maker Control Components Inc...

More Heat Coming

Posted on August 09, 2009
The head of the SEC's Division of Enforcement, Robert Khuzamii, said last week the agency will put more attention on the Foreign Corrupt Practices Act. Among five specialized enforcement units to be created will be one devoted to the FCPA. He said:The Foreign Corrupt Practices Act unit will focus on new and proactive approaches to identifying violations of the Foreign Corrupt Practice Act, which prohibits U...

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Measuring Compliance

Posted on August 06, 2009
After a public company finds evidence of illegal payments overseas, there are decisions to make. Should the board launch an internal investigation? Should the company self-report its findings to the DOJ and SEC? What about a public disclosure? Before those decisions are made, though, there's usually a discussion about "materiality...

Jefferson Convicted of Conspiracy to Violate the FCPA

Posted on August 05, 2009
William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges on Wednesday by a federal jury, including conspiracy to violate the Foreign Corrupt Practices Act. He was acquitted of a substantive charge of violating the FCPA...

Here Comes The SFO, Part Two

Posted on August 04, 2009
The U.K.'s Serious Fraud Office is supposed to prosecute overseas corruption. But its track record has been weak. Last month, however, it announced a break-through enforcement action against Mabey & Johnson (here). We wondered if that case could mark the emergence of an energized Serious Fraud Office...

Panalpina Hit With FCPA-Related Shareholder Suit

Posted on August 03, 2009
An investment fund that owns about 5% of Panalpina World Transport (Holding) Ltd filed suit on July 23, 2009 in the Southern District of Texas against the company, some current and former officers and directors, and its owner before its 2005 IPO in Switzerland...

Hollywood FCPA Trial Set To Open

Posted on August 02, 2009
The year's third Foreign Corrupt Practices Act trial is scheduled to start on Tuesday when the husband-and-wife movie producers arrested in 2007 face a federal jury in Los Angeles. Prosecutors allege that Gerald and Patricia Green paid more than $1.8 million in bribes to a former governor of the Tourism Authority of Thailand in return for $14 million in contracts to stage the Bangkok Film Festival...

Canadian Indicted For Iraq Bribes

Posted on August 01, 2009
The Justice Department said Friday that a Canadian citizen has been indicted for his alleged role in an eight-year conspiracy to defraud the United Nations Oil for Food Program (OFFP) and to bribe Iraqi government officials in connection with the sale of a chemical additive used in refining leaded fuel...

Guilty Plea By Control Components

Posted on July 31, 2009
Valve-maker Control Components Inc. (CCI) of Rancho Santa Margarita, California pleaded guilty Friday to violating the anti-bribery provisions of the Foreign Corrupt Practices Act (15 U.S.C. §78dd-2) and the Travel Act (18 U.S. C. §1952). It admitted bribing foreign officials in a decade-long scheme to secure contracts in about 36 countries...

SEC Settles With Nature's Sunshine, Two Officers

Posted on July 31, 2009
The Securities and Exchange Commission filed a settled enforcement against Nature's Sunshine Products Inc. (NSP), its Chief Executive Officer Douglas Faggioli. 54, and its former Chief Financial Officer Craig D. Huff, 53. According to the SEC, the charges relate to cash payments made in 2000 and 2001 by the Brazilian subsidiary of NSP, a manufacturer of nutritional and personal care products, to import unregistered products into Brazil and the subsequent falsification of its books and records to conceal the payments...

Driller Resolves FCPA Charges

Posted on July 30, 2009
Oil and gas driller Helmerich & Payne Inc. (H&P) will pay a $1 million criminal penalty to the Justice Department and disgorge to the Securities and Exchange Commission $320,604 plus prejudgment interest of $55,077.22 to settle Foreign Corrupt Practices Act violations related to improper payments to government officials in Argentina and Venezuela...

Avery Dennison Settles China-Related Violations

Posted on July 28, 2009
Label-maker Avery Dennison Corporation, whose compliance problems in China were described in an LA Times story last January, has resolved civil and administrative charges brought by the Securities and Exchange Commission.The SEC filed settled enforcement actions in the United States District Court for the Central District of California charging Avery with violating the FCPA's books and records and internal controls provisions...

Over There

Posted on July 28, 2009
Our subject is usually corruption overseas. But it's impossible to ignore the news these days from New Jersey. Arrested earlier this month -- 44 people, including three mayors and two state legislators. So what's the cause of all that alleged home-grown graft?There are lessons from the Third World...

Jefferson's Case Heads To The Jury

Posted on July 27, 2009
His defense took just two hours to present. Now, according to the Times Picayune, the jury will hear closing arguments today (Tuesday) and begin deliberations Tuesday or Wednesday on William Jefferson's fate. Here's how the paper began its report of the final day of testimony:In a moment of courtroom drama Thursday, the prosecutors in the corruption trial of William Jefferson withdrew their objections and let the former New Orleans congressman's attorneys play nearly 90 minutes of secretly taped recordings that the defense team said was crucial to his case...

Getting Loud For Justice

Posted on July 26, 2009
It's been awhile since we beat the drum about respondeat superior (here). But that's OK. A a couple of very smart guys have been doing it for us. They're Stanley A. Twardy Jr., a former U.S. Attorney for Connecticut, and Daniel E. Wenner, a former Assistant U...

Here Comes The SFO, Part One

Posted on July 23, 2009
The last time we had a serious discussion about the U.K.'s Serious Fraud Office was to report its thrashing in June 2008 by a former American prosecutor. Jessica de Grazia, who'd been an assistant district attorney in Manhattan for 13 years, was hired by the U...

Caribbean Corruption Report Leaked

Posted on July 22, 2009
WikiLeaks -- the site that publishes documents that are "classified, censored or otherwise opaque to the public record" -- has posted the suppressed final report of the Turks and Caicos Islands Commission of Inquiry. Based on the commission's findings, the British government said in June it would suspend the territory's political institutions and impose direct rule...

Seal This . . .

Posted on July 20, 2009
Nearly everything in the court's electronic record of James Giffen's criminal prosecution is beyond reach. Almost 200 pleadings and orders are in the docket but only a dozen can be viewed or downloaded, and the indictment isn't one of them. It's sealed tight, buttoned down, locked up...

Back To Bourke

Posted on July 19, 2009
The inbox brought a surprise from a generous reader -- the jury instructions Judge Scheindlin issued in Frederic Bourke's case. We talked earlier about the "knowledge" element of an FCPA offense and the two kinds of "knowledge" the government can prove: What the defendant actually knows and what he or she should know under the circumstances...

The Iron Ore War

Posted on July 16, 2009
The Chinese government this week alleged that employees of Rio Tinto bribed executives from 16 Chinese steel mills that buy its iron ore for themselves and China's 120 steel producers. Anglo-Australian Rio Tinto is among the world's largest iron ore miners and has been a major supplier to China's steel industry, which is mostly state-owned...

James Giffen And America's Secrets

Posted on July 15, 2009
In the 1990s, according to the Justice Department, American businessman James Giffen had the title of counselor to the president of Kazakhstan. His job was to help with "priority investment projects relating to the exploration, development, production, transportation, and processing of oil and gas...

The Rule Of Brutality

Posted on July 14, 2009
Evan Osnos' Letter from China in last week's New Yorker included this excerpt from a piece circulating in China (in Chinese only) about the violence in Xinjiang. It's attributed to Zhong Dajun, described as a prominent economic consultant and former editor at the China Economic Times:This problem arises from the corruption of the government...

Knowing What You Don't Know

Posted on July 13, 2009
Prosecutors told the jury during Frederic Bourke's trial that instead of doing adequate due diligence for his investment in Viktor Kozeny's Azerbaijan privatization scheme, he'd "stuck his head in the sand." It may not sound like legal jargon but the "head-in-the-sand" phrase pops up often in criminal law and appears prominently in the Foreign Corrupt Practices Act's legislative history...

Bourke's Verdict: Only In America

Posted on July 11, 2009
Nowhere else in the world would Frederic Bourke have been prosecuted on the facts of his case. His crime was to invest in a deal in a far-off country where he knew or should have known that bribes would be paid. Prosecutors said he stuck his head in the sand...

Bourke Convicted

Posted on July 10, 2009
Frederic Bourke was convicted on Friday of conspiring to violate the Foreign Corrupt Practices Act and lying to FBI agents. He was acquitted of money laundering. The judge has already said she will impose less than the 10-year maximum sentence prosecutors have asked for...

Spending Siemens' Money

Posted on July 09, 2009
Last week the World Bank announced that Siemens will pay $100 million over the next 15 years to settle corruption charges involving a project in Russia. The money is supposed to go to anti-corruption groups, for compliance training and education programs, as well as helping governments recover assets stolen by crooked leaders...

Those Are Fighting Words

Posted on July 08, 2009
Whoa. Did that guy just say the Foreign Corrupt Practices Act causes corruption and hurts poor people? What kind of person would talk that way? Doesn't he know how the FCPA spreads the good news of American business ethics to the four corners of the planet? That he's attacking a law that, as Jeffrey Garten once told us, falls into the same category as mom and apple pie?But here's the thing...

A Russian Crusader Dies

Posted on July 07, 2009
One of Russia's leading anti-corruption journalists died last week from head wounds received two months ago in an attack outside his home. Vyacheslav Yaroshenko, 63, ran the paper Korruptsia i Prestupnost (Corruption and Crime) in Rostov-on-Don. The local media had reported that he either was in a brawl or fell down the stairs...

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