Stemming the Export of Corruption
Bribes Beyond the Border
Stemming the Export of Corruption
Let's say you're a business exec who's about to ink a lucrative deal to sell a million widgets overseas. Suddenly, a competitor swoops in and wins the contract by discretely paying off a foreign official.
Illegal? You bet…and every bit as corrupt as bribing your local politician.
"Companies should thrive overseas through competition, not corruption," says Chip Burrus, who heads up FBI criminal investigations. "The American Dream was built on fairness and free enterprise, not on backroom deals half a world away."
The Foreign Corrupt Practices Act of 1977 banned a growing habit of bribing international officials to win business. But stopping this global brand of public corruption has never been more important—or more on our radar—than it is today.
Assistant Director Burrus explains why. "We live in an age where global commerce is enmeshed and interconnected like never before. There are a ton of U.S. businesses nowadays that have plants or offices in distant countries…or that outsource their operations overseas…or that buy and sell products and services abroad. We can't have a level playing field if there's all kind of chicanery going on beyond our borders."
And how we're tackling the problem. "We recently set up a dedicated team of special agents in our Washington Field Office who are now working all FCPA cases," he says. "This centralizes our focus and expertise and helps boost coordination with the Department of Justice's Fraud Section, which plays an important role in these cases."
We're also creating an International Contract Corruption Task Force, also based in Washington, to help identify violations of the law. The task force will include personnel based in Iraq, Kuwait, and Afghanistan because of the enormous private industry and government presence in that region.
Another reason why these task forces make sense: FCPA cases are often complicated and difficult to prosecute. Overseas bribes are typically well hidden in complex contracts and other procurement processes. The days of someone "accidentally" leaving a briefcase full of money sitting on the floor after a business meeting to help grease the skids are long gone.
A few examples of recent cases:
In September, a former executive of a Texas-based company pled guilty to conspiring to bribe government officials in two countries. He and a colleague arranged for a $1.5 million cash payment to Nigerian officials to secure gas pipeline construction business. He also helped pay at least $300,000 to officials in Ecuador to get a contract to repair a gas pipeline there.
In December, a former French telecommunications executive was indicted for allegedly bribing officials in Costa Rico with $2.5 million to get a mobile telephone contract. Why did U.S. law apply to a French citizen working for a French company? Because his company traded on the New York Stock Exchange.
A South Korean subsidiary of a U.S. steel company pled guilty to paying foreign bribes to managers of customers in China and South Korea.
"Our highest criminal priority is to curb public corruption, whether here or overseas," Burrus points out. "It's important to consumer confidence…it's important to corporate competitiveness…and it's especially important to the health of our democracy."
Editor's note: Assistant Director Burrus left the Bureau in the spring of 2007 and was replaced by Kenneth W. Kaiser.