Anti-Bribery

Engineering and construction firm PBSJ has agreed to pay $3.4 million in financial remedies to the SEC for violations of the Foreign Corrupt Practices Act by offering and authorizing bribes and employment to foreign officials to secure Qatari government contracts. Details inside.

When the Justice Department settled corruption charges against Alstom SA in December, it did not require a compliance monitor—because Alstom already had one, appointed by the World Bank. How does the bank’s integrity office work? What risks do you have? Lots. “You can be a perfect company today, but if you commit a sanctionable practice, they’re going to seek to debar you,” says Michael Diamant, a partner at law firm Gibson Dunn & Crutcher.

Nortek disclosed last week in a regulatory filing with the Securities and Exchange Commission that it has launched an internal investigation into potential violations of the Foreign Corrupt Practices Act concerning potential improper payments made by its Chinese manufacturing unit. Details inside.

Foreign Corrupt Practices Act enforcement actions brought by the Justice Department and the Securities Exchange Commission in 2014 held steady in comparison to the previous year’s enforcement numbers, while the average price tag in penalty amounts continued to skyrocket. In 2014, the average total value of monetary resolutions in FCPA enforcement actions reached $156.6 million, in comparison to $80 million in 2013. Details inside.

The record $772 million criminal penalty reached between the Justice Department and French power and transportation giant Alstom is yet another real-life example of corporate governance gone haywire. Abounding with cover-ups and an overall lack of due diligence, “The Alstom case is the antithesis of the hallmarks of an effective compliance program,” says Edward Kang, a partner with law firm Alston & Bird. Details and lessons inside.

Image: Title: KronJan. 7—The $772 million bribery settlement between Alstom SA and U.S. regulators last month did not close the door on allegations plaguing the French industrial conglomerate. The company continues to face ongoing bribery probes in Poland and the United Kingdom, according to published reports, with former employees facing criminal charges and additional charges possible as the investigations evolve. In its defense, Alstom officials pointed to efforts in recent years to beef up compliance programs. “There were a number of problems in the past, and we deeply regret that,” CEO Patrick Kron said. More inside.

Image: Title: TillenThe SEC set the compliance community buzzing in December with two FCPA enforcement actions that hinge on improper travel and entertainment spending—an offense historically seldom seen in FCPA enforcement. Usually, “T&E abuses are add-on charges to an enforcement action involving a larger pool of improper activity,” says James Tillen of law firm Miller & Chevalier. Perhaps no longer. A look at internal controls to combat T&E abuse is inside.

Image: Title: Berland2015 may be the year when overseas regulators hit their stride in prosecuting companies for misconduct, as tactics get more sophisticated and investigations come to fruition. In the United States, enforcement stemming from whistleblowers will be at full speed and pressure to cooperate with prosecutors will be high. “The pipeline is finally full,” says Russ Berland of law firm Stinson Leonard Street. “We will see payouts this year that have been in the works for a least a couple of years.”

Dec. 29—Israeli police have made more than two dozen arrests in what some say is the most significant anti-corruption operation in the country’s history. Officials have been questioned on suspicion of corruption, embezzlement of public funds, and illegal money transfers. According to police, “millions” of shekels of public funds were allegedly transferred to organizations close to Lieberman’s Yisrael Beitenu party. A total of 24 people have been arrested while another four remain under house arrest. Details inside.

France still has several more improvements to make when it comes to combating the bribery of foreign public officials involving French companies, according to the Organization for Economic Cooperation and Development’s follow-up report to its Phase 3 recommendations. Of the OECD’s 33 recommendations, the group deemed four to be fully implemented; 17 partially implemented; and 12 recommendations remained non-implemented. Details inside.