I am often asked how government authorities might discover evidence of bribery and corruption that could violate the Foreign Corrupt Practices Act or the U.K. Bribery Act. One of the ways not usually mentioned, but which was prominently featured this week, is through a news report.
Obviously the New York Times was an important part of impetus behind on the ongoing Walmart FCPA investigation. This time, however, the media outlet was the BBC and the allegations were that bribery had occurred in violation of the Bribery Act.
A former British American Tobacco Co. employee, Paul Hoskins, appeared on the BBC television program Panorama and alleged that the company had paid out bribes to facilitate the sale of tobacco products in east Africa. The alleged bribes given to government and local officials, UN representatives, and even members of the World Health Organization. Hoskins even revealed recordings where he alleged the company paid bribes to inhibit anti-smoking legislation in countries such as Burundi.
BAT responded aggressively, saying in a statement, “We will not tolerate corruption in our business, no matter where it takes place. We are disappointed that the BBC should decide to broadcast allegations made by former employees with a clear vendetta against us, whose employment was terminated in acrimonious circumstances, and who present a completely false picture of the way BAT does business. We have made it clear to the BBC that their sources are unreliable and that we categorically deny the suggestion that this is how BAT operates around the world.”
Whistleblower Hoskins has indicated that the documents he purloined and made available to the BBC, he will also present to the U.K. Serious Fraud Office. BAT also has operations in the United States, making it subject to the FCPA. You can expect that if the SFO gets documents suggesting evidence of bribery and corruption, copies will make their way across the pond to U.S. authorities.
There are those who have pooh-poohed the New York Times breaking story about Walmart and allegations of corruption in Mexico. It seems to me they miss the larger point that Walmart has now spent more than $600 million in investigation fees and remediation costs. Does anyone really think the company would have made that type of investment if it had not appeared on the front page of the newspaper?
The BBC story on BAT and the Times story on Walmart underline the fact that a robust and engaged press is a key factor in the global fight against bribery and corruption. Without the Fourth Estate, things could be considerably worse.