U.S.-based construction management company Louis Berger International on July 17 reached a $17.1 million settlement with the Department of Justice to resolve charges that it violated the Foreign Corrupt Practices Act when it bribed foreign officials in India, Indonesia, Vietnam, and Kuwait to secure government construction management contracts. Two of the company’s former executives also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.
As part of its settlement agreement, Louis Berger International (LBI) entered into a deferred prosecution agreement (DPA) and admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the FCPA. In addition to the criminal penalty, LBI has agreed to implement rigorous internal controls, to continue to cooperate fully with the department, and to retain a compliance monitor for at least three years.
Richard Hirsch and James McClung each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA. Hirsch previously served as the senior vice president responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam. McClung previously served as the senior vice president responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam.
According to admissions in the DPA and statements in the charging documents, from 1998 through 2010, LBI and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts. To conceal the payments, the co-conspirators made payments under the guise of “commitment fees,” “counterpart per diems,” and other payments to third-party vendors. In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts.
Among other factors, in entering into a DPA in this case, the government said it considered the following factors:
LBI’s self-reporting of the misconduct;
LBI's cooperation, including voluntarily making both U.S. and foreign employees available for interviews, and collecting, analyzing and organizing evidence and information for federal investigators;
The company’s extensive remediation, including terminating the officers and employees responsible for the corrupt payments; and
The company’s demonstrated commitment to improving its compliance program and internal controls.
The sentencing hearings for Hirsch and McClung are scheduled for Nov. 5, 2015.