1. Is Wal-Mart the only company being accused of violations of the Foreign Corrupt Practices Act (FCPA)?
No. Over the last decade the number of corporations including Wal-Mart and individuals subject to prosecution under the Foreign Corrupt Practices Act (FCPA) has skyrocketed. The Wal-Mart Mexico case is just one example of the large and well-known multinational companies that can be swept up in the FCPA enforcement net. Other well known companies that have been investigated for FCPA violations include Hewlett-Packard, Goldman Sachs, Avon and Pfizer.
2. This act was passed in 1977 but it has only been rigorously enforced in the past few years. What are your thoughts on this?
Although the FCPA has been around since 1977, increased enforcement activities have only been a recent trend. Globalization is one of the main reasons why the act has been more rigorously enforced. As American companies expand throughout the world and international companies open shop in the US, corruption and bribery have become a transnational vector to avoid regulation. As a consequence, more and more companies have been tempted to take shortcuts to success especially in developing nations where corruption is common. This has clearly been illustrated in a recent survey by the accounting firm Ernst & Young which found that 15% of 1,700 chief financial officers surveyed around the world admitted that they would be willing to pay a bribe to get ahead.
3. Why do you think it has taken over 30 years for the feds to begin enforcing this Act?
Over the last 30 years, globalization has also brought increased connections between the government agencies around the world that regulate business activity. That international cooperation has made combating global corruption a priority for most nations. Some examples of international and foreign anti-corruption legislation include the Organization of Economic Cooperation and Development (OECD) Anti-Bribery Convention, the United Nations Convention Against Corruption and the UK Bribery Act of 2010. That combination of international anti-corruption legislation and increased cross-border cooperation has influenced federal authorities in the US to act more aggressively in the expansion of FCPA enforcement. The broad scope of the statute has also given authorities wide latitude in how the law is interpreted and who and what activities are subject to its jurisdiction.
Additionally, increased media coverage of corruption and bribery cases both here in the US and overseas has put increased pressure on federal authorities to get serious about stopping corruption and that the authorities should not exempt companies from behaving badly. Finally, increased resources including more prosecutors and the assistance of the FBI in conducting FCPA investigations have allowed the authorities the means to target more violations and bring more enforcement actions.
4. What are the fines and are jail time that could be handed out if the company is found guilty of violating this act?
The two federal agencies responsible for enforcing the FCPA are the Department of Justice (DOJ) and the Security and Exchanges Commission (SEC). The DOJ can bring a suit against any company doing business in the US if it makes a payment with a corrupt intent to a foreign official in order to obtain or retain business. If found guilty, a company can be fined up to $2 million per violation and individuals such as directors or officers face up to five years in prison and fines up to $250,000. The SEC can bring suit against a company if it fails to file reports with the SEC or fails to maintain records that accurately reflect the company's transactions and assets. If found guilty, the company faces fines up to $25 million and company individuals face up to 20 years in prison and can be fined up to five million.
5. Were you able to find anyone who has already had to pay up because of violations?
One of the largest fines levied for an FCPA enforcement action was against the German engineering and electronics company Siemens AG. In 2008, it plead guilty to both criminal and civil violations of the statute and agreed to pay $800 million to US authorities and an additional $856 million to German authorities. More recently, in 2013, French oil company Total SA paid $398 million in fines for bribery charges stemming from its work in Iran. The amount paid by Total was the fourth largest fine levied for an FCPA enforcement action. Interestingly, last year also saw a spike in the enforcement actions against individual corporate officers.
Cassin, Richard L. The FCPA Blog. Ethixbase Pte Ltd, Aug. 2007. Web. 20 Jan. 2014.
Koehler, Mike. FCPA Professor. Southern Illinois U, June 2009. Web. 20 Jan. 2014.