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Corruption can give you a very bad few days

Tom Fox | February 21, 2016

You know it is going to be a bad day when you see your company’s name splashed across a BBC investigative report into alleged payment of bribes to secure business contracts. However, your day can get considerably worse when US congressmen, call for the Justice Department to investigate your company for possible violations of the Foreign Corrupt Practices Act. Unfortunately for the British company British American Tobacco (BAT) both these eventualities have recently occurred.

Back in November, the BBC investigative television program Panorama claimed it had found evidence of bribery at one of the UK's biggest companies. The program interviewed for former BAT employee, Paul Hopkins who said that BAT had illegally paid politicians and civil servants in countries in East Africa. The BBC report claimed there were documents which indicated BAT may have paid people off to protect its corporate reputation and cover up scandals like environmental damage caused by a warehouse fire in Uganda, and even engaged in corporate espionage and sabotage of competitor tobacco corporations in Kenya.

But things took a decidedly worse turn company when nine US Senators and Representatives sent a letter to the Justice Department asking it and the SEC to investigate the company for alleged violations of the FCPA. In a Press Release, Senator Richard Blumenthal said he and Representative Lloyd Doggett had co-authored the letter to the Justice Department, which also bore the signatures of seven other Congressmen. Blumenthal wrote, “If true, the allegations lodged against BAT are an affront to public health and United States law.” Representative Doggett said, “If true, these allegations would demonstrate a deplorable choice by BAT to balloon its profits through bribery at the expense of the health of millions.  Any corporation that enjoys the benefits of our stock exchange must comply with our anti-bribery laws.”

Unfortunately for BAT, Spencer Tracy cannot show up like he did in the movie Bad Day at Black Rock. After the BBC piece, BAT released a statement which included the following, “We do not and will not tolerate corruption, no matter where it takes place." However the company may now be looking an investigation by both the Justice Department/SEC in the US and an investigation by the Serious Fraud Office in the UK as well.

 

A very bad day…