Feds Using Wiretaps and Undercover Agents to Investigate Companies Bribing Foreign Officials
The federal government is using investigative techniques reserved for gangs and organized crime to catch U.S. companies from bribing foreign officials.
Over the past five years, the U.S. government has ramped up enforcement of The Foreign Corrupt Practices Act of 1977 (FCPA). The FCPA, which makes it illegal for individuals and companies to bribe officials of other countries to gain a business advantage, is enforced by the Department of Justice (DOJ) and the Securities and Exchange Commission. Companies frequently settle allegations of FCPA violations with these agencies for millions of dollars. Last year, for example, the settlements included payments of $94 million by automobile manufacturer Daimler, $40 million by chemical firm Innospec, and $265 million by oil and gas company Panalpina.
The government sees this increased enforcement as proof that anticorruption laws are working. DOJ representatives have announced that the agency took in more than $1 billion in fines in 2010. However, as the fines have increased, questions have surfaced about inconsistencies in the act and the new methods the DOJ is using to conduct its investigations. Experts suggest that issues with the law could be addressed by amending the FCPA and getting greater international cooperation for antibribery efforts.
The primary change in the government enforcement of the FCPA over the past few years is the way companies are being investigated. According to Michael Volkov, a partner with Mayer Brown LLP in Washington, D.C., the government is using investigative techniques typically reserved for gangs or organized crime. “They are using undercover officers, confidential informants, and wiretaps,” he says. “They have made it clear that they will go after white collar criminals as aggressively as [they pursue] drug dealers.”
(To finish reading "Anticorruption Efforts Seen as Flawed" from the April issue of Security Management, click here .)