FCPA Investigations Hit DaimlerChrysler and Oil Companies

• Posted by Geoffrey G. Gussis on August 7th, 2005


• Filed in Risk Management & Compliance

All in-house counsel working for companies that operate overseas should familiarize themselves with the Foreign Corrupt Practices Act (the "FCPA").  The FCPA prohibits corrupt payments to foreign officials for the purpose of obtaining or keeping business.  In addition, other statutes such as the mail and wire fraud statutes, 18 U.S.C. § 1341, 1343, and the Travel Act, 18 U.S.C. §  1952, which provides for federal prosecution of violations of state commercial bribery statutes, may also apply to such conduct.  The FCPA isn’t an aging statutory scheme that is rarely enforced - as the White Collar Crime Prof Blog (a must read for inhouse counsel) points out:

"Investigations of possible violations of the Foreign Corrupt Practices Act are hitting major international companies.  DaimlerChrysler has been under investigation since August 2004 for possible bribes paid by its Mercedes division, an investigation triggered by a lawsuit filed by an accountant for the company who claimed he was fired because he tried to blow the whistle on secret accounts used to pay foreign officials.  The payments were out of Germany, where Mercedes operates, which had long resisted efforts to extend the FCPA.  Because DaimlerChrysler’s shares are listed on the New York Stock Exchange, it is subject to SEC disclosure rules and the FCPA….

On a different front, the public filings of Amerada Hess (here) and Devon Energy (here)
disclose — buried deep within their 10-Qs, of course — that the SEC
has bumped up its inquiry into payments related to oil projects in
Equatorial Guinea to a formal investigation.  A story in USA Today (here)
indicates that oil giants ExxonMobil, ChevronTexaco, and Marathon Oil
are also involved in the SEC investigation.  Interestingly, the genesis
of the FCPA investigation was the money laundering and bank secrecy
investigation of Riggs Bank, which had a number of accounts for foreign
leaders, including Equatorial Guinea’s leaders and their family
members, that were suspected of being used to hide corrupt payments."

Link: White Collar Crime Prof Blog: FCPA Investigations Hit DaimlerChrysler and Oil Companies.

Link: The Foreign Corrupt Practices Act - Information from the United States Department of Justice.