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Top Ten FCPA Recoveries of 2022

Posted  January 13, 2023

In recent years, the United States government has recovered billions of dollars going after companies that bribe foreign officials in order to further their business interests, a practice that violates the Foreign Corrupt Practices Act (FCPA). Two principal United States government agencies, the Department of Justice and the Securities and Exchange Commission, investigate and prosecute FCPA violations. Whistleblowers who report FCPA violations to the SEC Whistleblower Program may be eligible to collect a whistleblower reward of up to 30 percent of the government’s recovery. A whistleblower need not be a U.S. citizen in order to be eligible for a whistleblower reward.

In 2019 and 2020, FCPA enforcement was strong, resulting in massive, multi-billion dollar recoveries. But 2021 was a slow and disappointing year for FCPA actions. That led many observers to wonder if government enforcers were losing focus and mettle.

Fortunately, as we speculated last year, 2021’s enforcement downturn seems like a pandemic-era blip. In 2022, FCPA enforcers again went after corporate scofflaws with gusto. Here are the top ten FCPA recoveries for 2022.

  1. Glencore. In May 2022, Switzerland-based mining and commodities giant Glencore plc agreed to pay penalties of $700 million to resolve bribery investigations by the DOJ, as well as $485 million to resolve market manipulation investigations by the Commodity Futures Trading Commission. The DOJ and CFTC investigations, as well as parallel inquiries by foreign law enforcement authorities, revealed Glencore paid $100 million in bribes to officials in Africa and Latin America. Glencore, which operates mining, metallurgical, and oil production facilities worldwide, reports about $200 billion in annual revenues.
  2. ABB. Swiss construction giant ABB Ltd. earned the dubious distinction of becoming the first three-time convicted FCPA violator when it agreed to pay penalties of $462.5 million in December 2022 to resolve charges that it bribed a South African official to win contracts for a power plant project. Of that amount, ABB paid $315 million to resolve criminal allegations, while the SEC netted $75 million on the civil side. The third strike was no doubt worse than the first two—ABB’s first FCPA settlement in 2004, related to conduct in Nigeria, Angola and Kazakhstan, cost the company $17 million, while its second run-in with anti-corruption authorities in 2010, concerning conduct in Mexico and the Iraqi U.N. Oil for Food program, cost it $58 million.
  3. Honeywell. American corporate conglomerate Honeywell paid $160 million in December 2022 to settle charges that it bribed officials of Brazil’s state-owned oil company, Petrobras, in order to secure a $425 million refinery contract. The company agreed to pay more than $81 million to settle the SEC’s charges, as well as to pay a criminal penalty of approximately $79 million to DOJ and Brazilian law-enforcement authorities. The SEC’s civil settlement also included misconduct in Algeria, where a Honeywell subsidiary paid more than $75,000 in bribes to a government official to obtain business with the Algerian state-owned entity Sonatrach.
  4. Stericycle. In April 2022, Stericycle, a medical waste management service in Illinois, agreed to pay over $84 million to settle parallel investigations that revealed the company forked over about $10.5 million in bribes to public officials in Brazil, Mexico, and Argentina. Stericycle paid a criminal penalty of more than $50 million and approximately $28 million to resolve the SEC’s civil investigation. Careful to leave crumbs for investigators, Stericycle staff used code words for the illicit payments; in Argentina, employees called the bribes “alfajores,” a popular sweet cookie.
  5. Tenaris. Tenaris, a Luxembourg-based global manufacturer and supplier of steel pipe products, agreed to pay more than $78 million in June to resolve civil charges that its Brazilian subsidiary paid approximately $10.4 million in bribes to a Brazilian government official in connection with the bidding process at Petrobras, Brazil’s state-owned oil company. Tenaris is among the recidivist bad boys on this year’s list. In 2011, the SEC and DOJ tagged Tenaris for millions of dollars for bribes the company paid to obtain business from a state-owned enterprise in Uzbekistan. Also of note, the SEC brought this action on its own, after DOJ declined to prosecute Tenaris.
  6. GOL Linhas. In September 2022, the DOJ and SEC announced enforcement actions against Brazilian airline GOL Linhas concerning improper payments the company made to officials in Brazil to pass legislation benefitting the airline. While GOL Linhas’s total criminal and civil penalties were about $157 million, the SEC and the DOJ accepted payment of $24.5 million and $17 million, respectively, due to the company’s inability to pay the fines in full. The SEC charged the company with paying $1.14 million in bribes to a Brazilian official to influence legislation related to payroll tax and aviation fuel tax reductions that saved the company around $39.7 million in 2013 alone.
  7. Jardine Lloyd Thompson Group. In March 2022, Jardine Lloyd Thompson Group Holdings Ltd., an insurance broker now owned by Marsh & McLennan, received good news in the form of a “declination with disgorgement” enforcement action. DOJ found that Jardine indirectly paid $3.1 million in bribes to Ecuadorian government officials to obtain contracts with that country’s state surety company, Seguros Sucre. But, exercising its discretion, DOJ declined to prosecute Jardine. While the company agreed to fork over about $29 million in disgorgement, DOJ credited the amount Jardine paid to the United Kingdom’s anti-corruption regulator. This resulted in a zero-dollar settlement for the U.S. Treasury.
  8. Oracle. In September 2022, Oracle Corporation agreed to pay more than$23 million to resolve civil charges that its subsidiaries in Turkey, the UAE, and India used slush funds to pay foreign officials and their families to attend international technology conferences in exchange for business. With this SEC-only action, Oracle joined the FCPA Recidivist Club. In 2012, Oracle paid $2 million to resolve SEC charges that its Indian subsidiary’s set aside off-books funds to make unauthorized payments to phony vendors.
  9. Safran. Despite finding that a subsidiary of French aerospace defense company Safran S.A. paid millions of dollars to a relative of a then-senior Chinese government official to obtain train lavatory contracts with the Chinese government, DOJ declined to prosecute the company. Instead, DOJ resolved its investigation of Safran in December 2022 with a “declination with disgorgement” letter, pursuant to which Safran agreed to disgorge more than $17 million; this amount represented the company’s profits from the corruptly obtained contracts. Among the reasons for DOJ’s declination were Safran’s timely and voluntary self-disclosure of the misconduct, its full and proactive cooperation, and its agreement to cooperate in any ongoing government investigations.
  10. KT Corporation. In February 2022, KT Corporation, South Korea’s largest telecom company, paid the SEC $6.3 million to resolve civil charges that it provided improper payments to government officials in South Korea and Vietnam. KT executives maintained slush funds they used for gifts and illegal political contributions to government officials who had influence over the company’s business, as well as to make payments in connection with seeking business from government customers.

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Every January, Whistleblower Insider looks back at the significant government enforcement actions of the past year. Our Top Ten lists highlight the biggest recoveries and significant enforcement efforts by different government actors in cases of interest to whistleblowers.
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