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Foreign Corrupt Practices Act PowerPoint Presentation
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Foreign Corrupt Practices Act

Foreign Corrupt Practices Act

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Foreign Corrupt Practices Act

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  1. Foreign CorruptPractices Act This presentation is for Discussion purposes only.

  2. Overview Jurisdiction Corrupt Payments Foreign Officials Case study

  3. Jurisdiction Issuers—A company with any class of stock traded in the US Domestic Concerns—US persons or companies organized under US laws Territorial Jurisdiction—Persons and companies acting on behalf of others subject to the FCPA

  4. Corrupt Payments • Obtain or retain business • Offer, promise, or actual payment • Induce the official to misuse his position • Value vs. intent • Corrupt vs. Legitimate

  5. Foreign Officials • Any officers of a government department or agency

  6. BAE Case Study

  7. BAE Systems, plc Formerly known as British Aerospace Subsidiaries throughout world (BAE Systems Inc.) One of largest defense contractors in the world

  8. Primary Focus Series of long-term contracts between the U.K. and the Kingdom of Saudi Arabia BAE served as the prime contractor Reported that total value of contracts to BAE was in excess of £43,000,000,000

  9. Primary Focus To investigate the corrupt nature of direct and indirect payments to KSA officials from BAE Jurisdiction over the corrupt acts

  10. Hurdles Typical FCPA Investigation BAE Investigation Company under investigation cooperates Documents are collected from company or individuals Foreign law enforcement partners provide assistance in the collection of evidence BAE Systems, plc was not cooperative BAE would not produce any documents SFO investigation had been closed. Within the U.S., aspects of the case touched on various levels of the U.S. Government

  11. Findings – Marketing Advisors Contracts were in legal trusts in offshore locations to avoid detection Marketing advisors were companies formed to protect the identity of the true advisor BAE made payments to these advisors via offshore companies Money from some of the known marketing advisors foreign bank accounts has been deposited into the U.S.

  12. Findings – Travel Agents BAE funded travel for government officials The travel agents fulfilled any requests the officials had and then bill the expenses back to BAE Expenses included cars, boats, houses, shopping sprees, shipping Communications between BAE and the agents were coded A large portion of expenses originated in the U.S.

  13. Findings – U.S. Deposits BAE also directly funded bank accounts within the U.S. were held by officials affiliated with the contract

  14. Findings – Non KSA • Found scheme to use marketing advisers and offshore accounts was not limited to the Al Yamamah contract • Examined contracts awarded in the Czech Republic and Hungary for the lease of Gripen Fighter Jets • The Gripens contained U.S. controlled defense materials

  15. Information Filed

  16. BAE Systems plc pleads guilty • Pleads guilty to conspiracy

  17. BAE Debarred and Fined Civil settlement with DoS for alleged violations of AECA and ITAR BAE Systems debarred and rescinded on same day Civil penalty of $79,000,000, the largest in Department history

  18. Questions? Peter Y. Spohn Supervisory Special Agent Washington Field Office Squad CR-22 703-686-6188 Peter.Spohn@ic.fbi.gov