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Catch of the Week: SAP SE

Posted  January 16, 2024

This week’s Department of Justice (DOJ) Catch of the Week goes to SAP SE (SAP).  On Wednesday (January 10), the German-based software company agreed to pay roughly $220 million to settle DOJ and SEC charges of violating the Foreign Corrupt Practices Act (FCPA) through bribes to government officials in South Africa and Indonesia.

The FCPA bars payments to foreign officials for any kind of business advantage, such as securing government contracts or other kinds of favorable treatment to support a company’s business.  The statute covers any form of consideration including gifts, meals, travel, and entertainment.  It also imposes strict record keeping and internal control requirements to prevent falsifying company books and records that might otherwise disguise foreign bribes.  According to the government, SAP violated both the anti-bribery and internal accounting provisions of the statute.

Specifically, the government charged SAP with providing payments and other things of value to  South African and Indonesian foreign officials.  These included cash payments, political contributions, and wire and other electronic transfers, along with luxury goods purchased during shopping trips.  The government further claimed the company falsified its books, records, and accounts to cover up the scheme.  All of this for the goal of obtaining improper advantages for various contracts with South African and Indonesian departments, agencies, and instrumentalities.

Enforcing the FCPA is a perennial priority for DOJ as it made clear in announcing the resolution of this matter: “We will continue to vigorously prosecute bribery cases to protect domestic companies that follow the law while participating in the international marketplace.”  The FBI weighed in with a similar sentiment: “The FBI will continue our nonstop efforts to identify, investigate, and prosecute companies willfully engaging in corrupt activities around the world.”

The government also made clear the penalty it imposed on SAP — as high as it was — would have been even higher but for SAP’s cooperation.  This included conducting its own internal investigation and promptly reporting its findings to the government; producing relevant documents and information to DOJ; making company officers and employees available for interviews; translating voluminous foreign language documents to facilitate and expedite DOJ review; and imaging the phones of relevant employees to preserve highly probative business communications sent on mobile messaging applications.  SAP also has taken significant remedial measures to prevent future misconduct in this area.

It is not clear whether a whistleblower was involved in reporting these violations to the government.  Given the difficulty in uncovering FCPA violations, the government often discovers the wrongdoing only because someone on the inside has come forward to expose it.  When they do, it is usually through the SEC Whistleblower Program given the agency’s key role in enforcing the FCPA along with DOJ.  But given the strict confidentiality the SEC maintains over its whistleblowers, the agency never discloses the identity or even the participation of a whistleblower in its enforcement efforts.

If you would like learn more about the SEC Whistleblower Program, or what it means to be an FCPA whistleblower, please don’t hesitate to contact us for a free and confidential consultation with an experienced member of our whistleblower lawyer team.

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Tagged in: Bribery and Bid-Rigging, Catch of the Week, FCPA, Securities Fraud,