April 24th, 2014

The FCPA Institute – Elevated Learning

FCPA InstituteI am pleased to announce the inaugural FCPA Institute to be held July 16-17th in Milwaukee, WI.

The FCPA Institute is a unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills.

At a typical FCPA conference, participants are a face in the crowd and information is conveyed in a disjointed fashion by dozens of speakers appearing on multiple panels with little opportunity for actual engagement.  The FCPA Institute is offered as a refreshing and cost-effective alternative to a typical FCPA conference.

The goal of the FCPA Institute is simple:  to develop and enhance fundamental skills relevant to the FCPA and FCPA compliance in a stimulating and professional environment with a focus on learning.  Information at the FCPA Institute is presented in an integrated and cohesive way by an expert instructor with FCPA practice and teaching experience.

In short, the FCPA Institute elevates the FCPA learning experience for a diverse group of professionals such as in-house and outside counsel; compliance professionals; financial and auditing professionals; and others seeking sophisticated knowledge and enhanced skills relevant to the FCPA.

The FCPA Institute places an emphasis on learning FCPA issues incrementally in the belief that foundational knowledge will best enhance understanding and comprehension of specific FCPA topics.  FCPA Institute participants will encounter FCPA legal authority and other non-legal sources of information that define this new era of FCPA enforcement as well as practice FCPA issue-spotting, receive instruction on how to conduct an FCPA risk assessment, and learn of FCPA compliance best practices.

To best facilitate the unique learning experience that the FCPA Institute represents, attendance at each FCPA Institute is capped at 30 participants.  At the end of the FCPA Institute, participants will have their knowledge assessed and upon successful completion of a written assessment tool can earn a certificate of completion.  In this way, successful completion of the FCPA Institute represents a value-added credential for professional development.

To learn more about the FCPA Institute and to register, please see here.

Posted by Mike Koehler at 12:04 am. Post Categories: Uncategorized

April 23rd, 2014

Checking In Down Under

Today’s post is from Robert Wyld (Partner, Johnson Winter & Slattery).  Wyld is the Australia Expert for FCPA Professor.


This update covers a range of important developments in Australia and overseas in the area of foreign bribery policy, investigations and regulation in the first quarter of 2014.

The key issues that are covered in this Update include:

  • Australia’s address to the G20 Anti-Corruption Roundtable
  • The Australian Securities and Investment Commission (ASIC) and whistleblower protections
  • ASIC and civil penalties
  • Australian foreign bribery investigations and prosecutions – media updates
  • Asia Pacific developments

Australia and the G20 Anti-Corruption Roundtable

The Australian Government has been remarkably quiet in the foreign bribery space. A Consultation Paper into whether facilitation payments should be abolished (published in November 2011) appears to have died an unfortunate death by inertia.

It was refreshing to read that the Attorney General, George Brandis QC, in delivering his opening address to the G20 Anti-Corruption Roundtable, made it clear that corruption is and remains one of the greatest barriers to global growth and that all governments must address the systemic problems flowing from corruption.

The Attorney General highlighted three specific issues that warranted close attention by the Roundtable group – judicial integrity, foreign bribery and the transparency of legal structures, and the identity of beneficial owners. While little was said on the detail, it is encouraging to see the topic of foreign bribery (whatever that entails) is firmly on the agenda while Australia chairs the G20 in 2014.

ASIC and Whistleblower Protections

On 18 February 2014, ASIC published its Information Sheet No. 52 entitled ‘Whistleblowers and whistleblower protection’. ASIC’s responsibilities are to regulate companies acting in contravention of the Corporations Act 2001 (Cth) (Act). ASIC’s focus is on conduct which is disclosed to it which involves a potential contravention of the Act. The Act provides a statutory framework to protect whistleblowers (see Pt9.4AAA, sections 1317AA to 1317AE).

The key elements under the statutory whistleblower protection regime that must be satisfied are:

  • the whistleblower must be an officer or an employee of the company or a contractor or employee of a contractor which has a current contract to supply goods or services to the company the disclosure is about;
  • the disclosure must be to the company’s auditor, a director, secretary or senior manager within the company, a person authorised by the company to receive whistleblower disclosures or ASIC;
  • the whistleblower must identify himself when making the disclosure;
  • the whistleblower must have reasonable grounds to suspect that the information disclosed indicates the company or company officers may have breached the Act (or ASIC’s Act); and
  • the whistleblower must make the disclosure in good faith.

The tenor of ASIC’s approach is that it still has limited resources, it prefers to focus on the disclosed conduct and it keeps emphasising that a whistleblower should seek independent legal advice. ASIC has been criticised in the past for responding very slowly at times to significant complaints. ASIC will now appoint a dedicated Liaison Officer to be in regular contact with the whistleblower. While a whistleblower may have protection from victimisation, any complaint about how a whistleblower is treated is a private matter between the whistleblower and the company.

In an Ethics Conversation hosted by the St James Ethics Centre in Sydney on 8 April 2014, the ASIC Chairman, Greg Medcraft indicated that while the protection of whistleblowers was important, he appeared less enamoured of the US whistleblower bounty scheme established under the US Securities Exchange Act. Mr Medcraft felt that such a scheme sat uncomfortably with the Australian culture of “not dobbing in a mate”. At the same event, Rod Sims, the Chairman of the Australian Competition & Consumer Commission, was concerned about how Australian courts might treat an individual who had a financial interest in a prosecution and the impact that might have on a whistleblower’s overall credibility. Perhaps the pioneering research work of Prof AJ Brown at Griffith University might help to debunk the myth of not dobbing in a mate – and encourage regulators to realise that the vast majority of Australians consider that whistleblowers who report serious misconduct should be both praised and protected. It remains to be seen how ASIC will act in the future towards whistleblowers.

ASIC and Civil Penalties

In March 2014, ASIC published its Report No. 387 entitled ‘Penalties for corporate wrongdoing’ which considered the penalties available to ASIC and whether they were proportionate and consistent with those for comparable wrongdoing in selected overseas jurisdictions. The key findings of the Report were as follows:

  • ASIC rated effective enforcement as critical to achieving its strategic priorities of fair and efficient financial markets with a range of penalties designed to deter contravention and promote greater compliance;
  • in relation to imprisonment and fines open to ASIC to seek through litigation: the maximum fines are broadly consistent with other comparable jurisdictions save for the US; other jurisdictions have greater flexibility to impose higher non-criminal fines; other jurisdictions can seek the disgorgement of profit generated by the wrongdoing,
  • within Australian legislation, there are examples where non-criminal fines can be imposed at a much higher amount than those available to ASIC.

ASIC has called for greater penalties to be available to it for corporate wrongdoing. While ASIC made it clear that it will pursue the sanctions and remedies best suited to each case on its merits, Mr Medcraft made it clear at the St James Ethic Centre Conversation that he wanted to target individuals as it was only through “scaring the hell out of people” faced with imprisonment, that he believed commercial behaviour might, in fact, change.

Australian Foreign Bribery Investigations and Prosecutions – Media Updates

The Securency banknote printing corruption prosecution continues to roll on slowly in Victoria. While the whole process is subject to suppression orders in Victoria, it is hoped significant public progress in the case occurs during 2014.

The Australian media has continued to follow the saga of an AFP investigation into the Middle East business activities of Leighton Holdings, its various entities and senior officers. While no criminal prosecution has occurred, the opening salvos in a securities class action in Victoria concerning non-disclosure to the market between aggrieved Leighton shareholders and the company suggests the case will continue to affect the company, currently under new Spanish management.

Asia Pacific Developments

The Asia Pacific region is home to both many of the world’s most active economies and to those where the perception of systemic corruption is the greatest.

Developments in China, as one of Australia’s most significant trading partners, must be followed. From mid-2013, the Chinese Government started to target multinational companies in the pharmaceutical sector, in the “supply side” of corruption rather than its traditional focus on the “demand side” of corruption, being the local Chinese public official. This must ring warnings to all Australian business that they are not immune from Chinese Government investigation.

In addition, the role of the US – China Joint Liaison Group on Law Enforcement, may yet see an increase in parallel US and China investigations, although human rights issues may see such investigations undertaken only in limited cases.

In the Asia-Pacific Economic Cooperation (APEC) Bali Declaration in late 2013, APEC called for greater regional cooperation on corruption and collaboration between regulators. A new regional authority is to be established, called the APEC Network of Anti-Corruption Authorities & Law Enforcement Agencies (ACT-NET). The goal of this agency is to, in part, “encouraging private sector stakeholders to implement APEC’s high standard principles for codes of business ethics”.

At the meeting of the APEC Anti-Corruption and Transparency Working Group held in Ningbo in China in February 2014, members agreed to further discuss ACT-NET’s development and implementation during 2014. The goal of the ACT-NET was said to advance greater collaboration among law enforcement authorities in combating corruption, bribery, money laundering, and illicit trade.. Future meetings of ACT-NET will take place during 2014.

Posted by Mike Koehler at 12:38 am. Post Categories: AustraliaGuest PostsWhistleblowers

April 22nd, 2014

Instead Of “What’s Wrong With Us?” Perhaps There Are Better Questions To Ask

As noted in this Money News article, SEC Chairman Mary Jo White was recently interviewed  by C-SPAN founder Brian Lamb as part of its Q&A series.  (See here for the full interview).

As noted in the article,”Lamb spent roughly two-thirds of the program walking through White’s career as the chief prosecutor for Manhattan under both local and federal auspices, coupled with top-level private experience as head of litigation” for a large law firm.

As further noted, “during the last part of the program, Lamb listed cases settled under the Foreign Corrupt Practices Act involving leading U.S. corporations, and he asked, “What is wrong with us?”  (The FCPA Blog posted the FCPA specific portion of the interview here).

Specifically Lamb asked “what is wrong with us” in connection with four corporate FCPA enforcement actions:  Alcoa, ADM, Diebold, and Eli Lilly.

So – “what is wrong with us?”

Well, actually not much and perhaps the more appropriate question Lamb could have asked is what is wrong with the DOJ and SEC?

In other words, perhaps Lamb was not aware (as detailed in this prior post) that the Alcoa action was primarily based on conduct over 20 years old or that the consultant at the center of the alleged bribery scheme was criminally charged by another law enforcement agency, put the law enforcement agency to its burden of proof at trial, and the law enforcement agency dismissed the case because there was no ”realistic prospect of conviction” (see here for the prior post concerning the U.K. enforcement action of Victor Dahdaleh).  Perhaps, Lamb was not aware that the SEC’s administrative cease and desist order in Alcoa specifically stated as follows.  ”This Order contains no findings that an officer, director or employee of Alcoa knowingly engaged in the bribe scheme.” Perhaps Lamb was not aware that the SEC’s enforcement action against Alcoa received not one ounce of judicial scrutiny.  Indeed, as highlighted in this previous post, as SEC Chairman White stated that “the public airing of facts, literally in open court, creates accountability for both defendants and the government” and that “trials allow for more thoughtful and nuanced interpretations of the law in a way that settlements and summary judgments cannot.”

Regarding ADM, perhaps Lamb was not aware – as detailed in my article “Why You Should Be Alarmed By the ADM FCPA Enforcement Action,” that per the DOJ’s and SEC’s own allegations, ADM and its shareholders were the victims of a corrupt Ukraine government which did not have the money to pay VAT refunds that it owed to companies like ADM that sold Ukrainian goods outside of Ukraine.  In my article I noted that the ADM enforcement action “will be blindly inserted into FCPA enforcement statistics and trotted out at every available opportunity to demonstrate how the U.S. is the leader in anti-bribery enforcement.” Lamb did just that.

Regarding Diebold, perhaps Lamb was not aware – as detailed in this prior post – that the enforcement action primarily focused on the conduct of two employees and that the SEC’s complaint specifically stated that these two employees received FCPA training in 2007, yet still continued their alleged improper practices.  In addition, the SEC specifically stated that the employees “took further steps to hide the leisure nature of [the problematic] trips including, on at least one occasion, providing false information to the company’s auditors in China.”

Regarding Eli Lilly, perhaps Lamb was not aware – as detailed in this prior post – that a focus of the SEC’s allegations (there was no DOJ enforcement) was that sales representatives at Lilly-China submitted false expense reports for items such as wine, speciality foods, a jade bracelet, meals, visits to bath houses, card games, karaoke bars, door prizes, spa treatments and cigarettes.  Perhaps Lamb was not aware that other allegations in the SEC’s complaint concerned conduct between 12 – 18 years ago.

Perhaps Lamb was not aware that the majority of the above enforcement actions, like most corporate FCPA enforcement actions, were resolved via non-prosecution or deferred prosecution agreements.

As to these resolution vehicles, it has been noted:

“To ensure that a company does not become that ‘rare’ case resulting in a corporate indictment with all of its attendant negative consequences, a company must not poke the government in the eye by declining any of its requests or suggestion of how a cooperative, good corporate citizen is to behave in the government’s criminal investigation. This template, in my view, can give prosecutors too much power.”

“[they have become] a semi-automatic response by the government in responding to corporate crime. Most cases of corporate crime should result in no action by the government against corporations that have responded appropriately to the wrongdoing and any remaining problems of controls, compliance and corporate culture.”

“[using alternative resolution vehicles] is almost becoming an automatic reaction in many cases beyond those where it should be used. Prosecutors are thinking – before we close out this case that involves any kind of corporate crime, we should get something from the companies.”

“[P]rosecutors are like anybody else – when they devote a lot of time and effort to a case, they want something to show for it. And so I fear the deferred prosecution is becoming a vehicle to show results.”

Perhaps Lamb was not aware that:

“the sweep of corporate criminal liability could hardly be broader …  its breathtaking scope always bears repeating: If a single employee, however low down in the corporate hierarchy, commits a crime in the course of his or her employment, even in part to benefit the corporation, the corporate employer is criminally liable for that employee’s crime. It is essentially absolute liability.”

Perhaps Lamb was not aware that the person who made all of the above statements was Mary Jo White – the person he was interviewing.  (See here for the prior post).

Posted by Mike Koehler at 12:04 am. Post Categories: Multimedia

April 21st, 2014

Wal-Mart Two Years Later

Two years ago this week, the New York Times ran a major story (here) titled “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle.”

The conduct at issue in the Times article related to Wal-Mart’s largest foreign subsidiary, Wal-Mart de Mexico (“Wal-Mart Mexico), and suggested that Wal-Mart Mexico “orchestrated a campaign of bribery to win market dominance” and that the entity “paid bribes to obtain permits in virtually every corner” of Mexico.

The April 2012 NY Times article resulted in intense world-wide media scrutiny of Wal-Mart.  However, it was known months before the NY Times article that Wal-Mart was under FCPA scrutiny.  (See here for the December 2011 post highlighting Wal-Mart’s FCPA disclosure).  Thus, this week is a false two year anniversary of Wal-Mart’s FCPA scrutiny, but a meaningful anniversary nevertheless.

Two years ago this week, in response to the NY Times article, Wal-Mart’s stock dropped approximately 8%.  However, savvy investors should have recognized the NY Times induced dip as a buying opportunity because the market often overreacts (perhaps because of the plethora of suspect FCPA enforcement information in the public domain).  For instance, the last trading day before the NY Times April article, Wal-Mart stock closed at $62.45.  Last Friday, Wal-Mart stock closed at $77.66 (relatively unchanged from a year ago when the stock closed at $78.29 on the one year anniversary)

A December 2012 front-page NY Times article (see here for the prior post) added additional details to the previous April 2012, but did not change much from an FCPA perspective.

In the two years since the original NY Times article, Wal-Mart’s FCPA scrutiny has followed a fairly typical pattern.  Wal-Mart’s internal review has expanded beyond Mexico, civil shareholder suits and derivative claims have been filed, Wal-Mart has engaged in various remedial measures, and the company’s pre-enforcement action professional fees and expenses have skyrocketed.

As highlighted in this recent post, in FY 2014 Wal-Mart spent approximately $1.1 million per working day on FCPA issues.  Total pre-enforcement action professional fees and expenses already disclosed plus estimates for the current fiscal year amount to approximately $659 million.  As noted here, Wal-Mart’s FCPA scrutiny has, in many respects, turned into a full employment act for FCPA Inc.

As highlighted here, some are aghast at the mere mention of Wal-Mart’s high pre-enforcement action professional fees and expenses.  Wal-Mart is a big company and “will survive its FCPA spending spree” plus it is “playing catch up for a decade of what appears to be FCPA neglect” is the response of some.

Such statement wholly ignores other aspects of the New York Times reporting.

Indeed, the conduct described in the NY Times articles was unremarkable from a Foreign Corrupt Practices Act perspective – a view I have consistently held since April 2012 (see here for a prior post and here for my article “Foreign Corrupt Practices Act Enforcement As Seen Through Wal-Mart’s Potential Exposure.”

The unremarkable portion of the NY Times articles is that a foreign subsidiary of a major multi-national company operating in an FCPA high-risk jurisdiction allegedly made payments to “foreign officials” to facilitate or grease the issuance of certain licenses or permits.  Even according to the NY Times, Wal-Mart’s subsidiary in Mexico “had taken steps to conceal [the payments] from Wal-Mart’s headquarters in Bentonville, Ark.” and Wal-Mart Mexico’s chief auditor altered reports sent to Bentonville discussing various problematic payments.

A November 2012 NY Times article (here) by David Barstow (the same author as the April 2012 and December 2012 articles) rightly noted that Wal-Mart’s investigation “was uncovering the kinds of problems and oversights that plague many global corporations.”  It was perhaps the most insightful thing the NY Times has said about Wal-Mart’s FCPA scrutiny, yet the November 2012 article received scant attention compared to the other two articles.

It is also interesting to ponder the salient question of whether the payments at issue in Wal-Mart, which are outside the context of procurement, actually violate the FCPA (and here, as in many cases, there is an important distinction between the law Congress passed and DOJ/SEC enforcement theories).  For instance, as noted in this prior post and in my above article, the government has an overall losing record in non-procurement type cases when actually put to its burden of proof.  However, as we all know, this will matter very little when it comes to any resolution of Wal-Mart’s scrutiny.

For all of the above reasons, I do not believe that Wal-Mart’s scrutiny “will test FCPA enforcement in new ways” as some have suggested.  Nor should it.

FCPA enforcement ought not be influenced merely by the fact that a talented journalist at a leading newspaper has devoted time and effort to cover an instance of FCPA scrutiny.  If Barstow and the NY Times would have focused on BizJet, the reaction likely would have been, and with good reason, more negative.  But then again, there probably would not have been any reaction at all because BizJet is obviously no Wal-Mart.  Insert many other recent FCPA enforcement actions [here], if Barstow and the NY Times would have focused on [that] instance of FCPA scrutiny, the story would have largely read the same.

Nor do I believe that Wal-Mart’s FCPA scrutiny will likely end up in the Top 5 FCPA enforcement actions of all time in terms of settlement amount.  The reason?  All of the cases in the Top 5 are procurement cases, not cases focused on licenses, permits and the like.

If Wal-Mart does indeed crack the Top 5 (and with the seeming escalation of FCPA fine and penalty amounts just because – see here - it is likely only a matter of time before a license, permit case does crack the Top 5), it will likely be for reasons unrelated to substantive FCPA issues, but rather an increase in the company’s culpability score under the advisory Sentencing Guidelines based on its alleged handling of the potential FCPA issues in 2005.

Corporate governance, or lack thereof, is what made the NY Times April 2012 remarkable.  This is the reason why Wal-Mart generated all the buzz it did two years ago this week and I’ve consistently held the view that the Wal-Mart story is a corporate governance sandwich with the FCPA as a mere condiment.

But even here, the seldom-discussed November 2012 NY Times article, adds additional relevant details.  It suggests that Wal-Mart’s December 2011 FCPA disclosure was motivated by Wal-Mart’s desire to pro-actively understand its FCPA risk (notwithstanding whatever may have occurred within the company in 2005 upon learning of potentially problematic payments in Mexico).  According to the article, Wal-Mart’s internal review began in Spring 2011 when Jeffrey Gearhart (Wal-Mart’s general counsel) learned of an FCPA enforcement action against Tyson Foods (like Wal-Mart, a company headquartered in Arkansas – see here for the prior post discussing the Tyson enforcement action).  According to the NY Times article, “the audit began in Mexico, China and Brazil, the countries Wal-Mart executives considered the most likely source of problems” and Wal-Mart hired KPMG and Greenberg Traurig to conduct the audit.

FCPA scrutiny tends to last, on average, 2-4 years from the point of disclosure to any eventual enforcement action.  Wal-Mart’s FCPA scrutiny is thus now in this range.  However, it is not uncommon for FCPA scrutiny to last 5-8 years, thus it may be many more years before Wal-Mart’s FCPA scrutiny and its eventually outcome are know.

Posted by Mike Koehler at 12:03 am. Post Categories: Wal-Mart

April 18th, 2014

Friday Roundup

Telling, scrutiny alerts and updates, and query whether.  It’s all here in the Friday roundup.


It is a rather telling indication of the nonsensical nature of criminal law “enforcement” when what is presumed to be a well-intentioned legislator introduces a bill that fails in its intended purpose.

Case in point, Representative John Conyers (D-Michigan) recently introduced the “Corporate Crime Database Act” to require the Attorney General to:

“acquire data, for each calendar year, regarding all administrative, civil, and criminal judicial proceedings initiated or concluded by the Federal Government and State governments against any corporation or corporate official acting in an official capacity involving a felony or misdemeanor charge or any civil charge where potential fines may be $1,000 or more.”

The problem of course, and why the bill fails in its intended purpose, is that a meaningful percentage of DOJ enforcement actions do not result in “judicial proceedings.”  Rather, many DOJ enforcement actions are resolved through non-prosecution agreements.  Moreover, many of the requirements in the bill hinge on “charges” and NPAs do not involve charges.

(See here and here for similar posts).

Scrutiny Alerts and Updates


In this week’s GSK news, as reported here:

“GlaxoSmithKline is facing a criminal investigation in Poland for allegedly bribing doctors to promote its lung drug Seretide, adding to problems for a company already accused of corruption in China and Iraq. Poland’s Central Anti-Corruption Bureau, or CBA, said on Monday that 13 people had been charged in connection with the investigation launched by Polish prosecutors. Britain’s biggest drugmaker said one employee had been disciplined following a company probe into the matter and it was co-operating with the Polish authorities. ”The investigation found evidence of inappropriate communication in contravention of GSK policy by a single employee. The employee concerned was reprimanded and disciplined as a result,” the drugmaker said in a statement.”

Further, as reported here:

“[GSK] is investigating claims its employees bribed doctors in Jordan and Lebanon by offering perks such as flexible travel arrangements and free samples that doctors could sell on, according to emails reviewed by The Wall Street Journal.  [...]  Glaxo has said it has launched an internal investigation into its operations in the United Arab Emirates, Qatar, Bahrain, Oman, Kuwait, Lebanon, Syria, Jordan and Iraq.  [...]  Glaxo sales representatives allegedly bribed doctors in Jordan to prescribe Glaxo drugs by issuing free samples that the doctors were then allowed to sell on, according to the emails. Glaxo representatives also allegedly permitted Jordanian doctors to bring their spouses on business trips that Glaxo paid for, according to the emails. Doctors were issued with business-class tickets to attend conferences but would exchange them at travel agencies for two economy-class tickets, allowing their spouses or other family members to come along free, a practice local Glaxo employees were aware of, according to the emails. Glaxo said that it is against company policy to allow airplane tickets to be exchanged for tickets of a lower value or refunded. The emails allege Glaxo sales representatives gave doctors in Jordan up to 60 free samples of its vaccine Synflorix, which they then sold on at up to $70 a vial. In Lebanon, Glaxo employees allegedly gave doctors free Synflorix vials as part of an incentive scheme to get them to prescribe the vaccine and not its competitors, another email to company representatives said. In both countries, Glaxo made payments to “key opinion-leader” doctors—influential and leading practitioners in their field—for lectures and other speaking engagements that may not have taken place, the emails allege, in return for them prescribing more Glaxo drugs.”

In response to the above recent media reports, GSK released this statement which states, in pertinent part, as follows.

“GSK can confirm we are investigating allegations regarding the activity of a small number of individuals in our operations in Jordan and Lebanon. We started investigating using internal and external teams as soon as we became aware of these claims. These investigations have not yet concluded.  We have zero tolerance for unethical or illegal behaviour. We expect our employees to uphold our high standards and we believe the vast majority do so. GSK welcomes and respects people speaking up where they have concerns and we have a number of channels internally to enable them to do this, including hotlines and online portals. We implement regular training for employees in compliance matters and we continue to improve compliance processes and procedures wherever we see a need. We publicly disclose all cases of misconduct identified in the company. Last year there were 161 violations relating to breaches of our sales and marketing polices, resulting in 48 dismissals and 113 written warnings. These numbers are very similar to those reported by other companies in our sector. We are confident in our processes and controls and that we do not have a systemic issue with unethical behaviour in GSK. However, we recognise there are concerns regarding interactions between pharmaceutical companies and doctors, particularly related to perceptions of conflicts of interest. That’s why we are the first company to have committed to undertake fundamental reforms to our business model to eliminate this concern by stopping payments to doctors to speak about our products, stopping payments to doctors to attend medical conferences and stopping pay for our sales reps being linked to individual sales targets.”

BSG Resources / Beny Steinmetz

Regarding BSG Resources and Beny Steinmetz, as reported here:

“Billionaire Beny Steinmetz approved millions of dollars in payments to a wife of the former president of Guinea as he fought to keep part of the world’s largest iron-ore deposit, a suspect in a U.S. graft investigation said in conversations secretly taped by the FBI.  The 109 pages of transcripts were among a cache of evidence posted on a Guinean government website April 9. The transcripts were introduced in the course of an investigation by the West African nation into whether bribery was used to obtain rights to the Simandou deposit. The Federal Bureau of Investigation shared evidence with the Guinean government from its own probe into the circumstances surrounding the award of the licenses, according to the Guinean release.  Both Steinmetz and his company BSG Resources Ltd. have denied any wrongdoing by the Guernsey-based company or its employees. BSGR said April 10 it would prove all allegations of bribery and corruption are false.”

Alstom / Marubeni Related

As reported here and here:

“Indonesia’s main anti-corruption court sentenced a lawmaker to three years’ jail today for accepting bribes from French company Alstom and Japan’s Marubeni in a multimillion-dollar contract.  Izedrik Emir Moeis was found guilty of accepting USD 357,000 from the companies to help them secure a USD 118 million joint contract in 2004 to supply and install boilers at a power plant on the island of Sumatra.”

(See here and here for previous posts on the related FCPA enforcement actions).

Query Whether

Given a common theory of FCPA enforcement, query whether hotels in the Middle East are state-owned or state-controlled.  Arabianbusiness.com reports:

“Almost 55 percent of hotel suppliers have been asked to offer a monetary bribe by a hotel procurement manager, while 72.6 percent of suppliers know of other supply firms that are using bribes, according to the results of a new industry survey carried out earlier this year.  The Hotelier Middle East Supplier Survey 2014, which received 108 responses during January and February of this year, also found 46.8 percent of suppliers believe that corruption, in terms of bribery, is a problem in the region’s hotel supply sector that is negatively impacting business.”


A good weekend to all.