The Department of Justice yesterday upped the ante in its efforts to encourage companies to self-report potential Foreign Corrupt Practices Act (“FCPA”) violations when it unveiled a one-year pilot program that includes carrots for companies who take the self-reporting route and sticks for those that don’t. This announcement follows the Department’s recent emphasis on prosecuting individuals in white collar cases, the addition of new resources to combat corruption that includes ten new FCPA prosecutors and three new squads of FBI agents dedicated to investigating corruption, and enhanced cooperation between U.S. law enforcement and their international counterparts. Assistant Attorney General of the Criminal Division Leslie Caldwell said that the objective of the pilot program is to provide greater transparency into the Department’s charging decisions and to provide an incentive for companies to self-disclose FCPA misconduct so that the Department can prosecute “individuals whose criminal wrongdoing might otherwise never be uncovered by or disclosed to law enforcement.”
On July 17, 2015, Louis Berger International, Inc., a New Jersey-based construction management company, entered into a deferred prosecution agreement (DPA) with the Department of Justice under which it agreed to pay a $17.1 million penalty for violating the Foreign Corrupt Practices Act (FCPA). In addition to the hefty penalty paid, the company agreed to implement rigorous internal controls, continue to cooperate fully with the department, and retain a compliance monitor for at least three years.
According to the DPA, from 1998 through 2010, the company paid approximately $3.9 million in bribes to officials in India, Indonesia, Vietnam, and Kuwait to win construction management contracts. The company concealed the crimes by recording them as “commitment fees,” “counterpart per diems,” “marketing fees,” and “field operation expenses.” Company employees and agents also submitted inflated and fictitious invoices to generate cash that was then later used for the payment of bribes through intermediaries. Two former executives of the company also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.