Greed drives individuals to take actions which oftentimes have us scratching our head at the level of brazen activity. Nothing fancy about the individual’s motivation, they are putting money into their pocket. A creative alternative income stream – high risk with high reward.
One need only do a media search on the keyword “bribery” to understand the prevalence. But remember, you are only reading about those who have been caught.
In the United States, if you engage in bribing your way into business transactions abroad, you’ll find yourself faced with the prospect of the Foreign Corrupt Practices Act (FCPA) being used like the Sword of Damocles to separate you from the business activity and into federal court.
Who falls within the remit and enforcement of the FCPA? Just about any corporate entity or individual doing business or residing in the United States.
With increasing frequency, the Department of Justice (DOJ) is prosecuting and obtaining guilty pleas and verdicts from those accused of bribery and/or violations of the FCPA involving the Department of Defense and the Armed Services. Some notable examples:
Fat Leonard
Perhaps one of the most far reaching cases of bribes for classified information involving the U.S. Navy is the case involving Glenn Defense Marine Asia and their use of bribery, graft, prostitution, gifts, concert tickets and more to induce members of the Navy to provide classified information to Leonard Glenn Francis (aka Fat Leonard) . Leonard’s company provided food, water, cleaning and other services to U.S. Navy vessels in several Asian ports. The DOJ has charged current and former Navy officials (ten have pleaded guilty; ten cases remain pending) including a Rear Admiral. The military brought UCMJ charges against a Navy Commander. The individuals hid their foreign contacts, and the bribes, and adjusted the flow of naval vessels.
The United Nations and the Macau Billionaire
A Macau billionaire, Ng Lap Seng, was found guilty of bribing United Nations (UN) ambassadors to obtain support to build a conferencing facility in Macua to host – wait for it – the UN Global South-South Development Expo. The DOJ tells us that “through bribes and no show jobs, Ng turned leaders of the league of nations into his private band of profiteers.” The “former” UN Ambassadors whom Ng bribed included Francis Lorenzo of the Dominican Republic and John Ashe (Antigua and Barbuda and the 68th President of the UN General Assembly).
Army Corps of Engineers Contractor Plays Both Sides
A defense contractor to the US Army Corps of Engineers pleaded guilty to soliciting $320,000 of bribes from Afghan contractors for a piece of the Corps of Engineers projects in Afghanistan, specifically the construction of a road from eastern Afghanistan to the Pakistan border.
Bribing for Alcohol at those Sweet, Sweet NEX Prices
A supervisory sales associate within the U.S. Navy Exchange Services (NEX) pleaded guilty of accepting more than $250,000 in bribes in exchange he allowed unauthorized personnel to purchase alcohol, in large quantities and repeatedly from the NEX. The purchasers provided bribes of $5-$20 per case of liquor.
Rogue Employee Runs Afoul of FCPA and SEC
One well known multi-national corporation and defense contractor found that one of their employees sidestepped the internal controls designed to monitor and assure compliance with the FCPA and other U.S. government regulations when attempting to solidify a project in Angola (non-defense). The end result, the contractor found themselves running afoul of the Security and Exchange Commission and the FCPA, and being ordered to disgorge $14 million ill-gotten gains, pay interest of $1.2 million and pay a penalty of $14 million. In addition, they will have the internal processes reviewed by an independent consultant and adjustments made to avoid repetition.
The good folks over at FCPA Tracker have identified Oil and Gas Services, Telecommunications, Healthcare, Oil and Gas Exploration and Production, and Pharmaceuticals as the top five industries which have open FCPA investigations as of early August.
The above examples were chosen to show the many ways in which corrupt business practices, driven by greed, can occur within any entity, both big and small. The need to police for corruption, fraud, and bribes, both inbound and outbound is very real.
