Corruption does not exist in a vacuum. It still may be possible to bribe a government official the (very) old fashioned way: with bags of cash, literally carried across a border. The much more modern equivalent is via wire transfer. A recent report spoke once again to the role of banks in modern day bribery and corruption. Without the acquiescence of these international banks, the worldwide scale of corruption might not be so great.
This case is about allegations of bribery to purchase votes on the International Olympic Committee (IOC) for the selection back in 2009 of Rio de Janeiro to host the 2016 Olympics. It turns out that immediately before the vote, a Brazilian businessman, Arthur Cesar de Menezes Soares Filho, transferred $2MM to accounts controlled by Papa Massata Diack, who was an IOC member at the time. Some five days later, however, “the money was sent back by the bank. Under French law, the bank should have reported the transaction with Tracfin, a national watchdog for suspicious transactions.” Not to be detoured Soares, subsequently split the payment into two $1M amounts and wired the money to other accounts controlled by Diack.
Additionally, French investigators have tracked several transactions made from the Société Générale-affiliated accounts linked to Diack, “including on the day Rio was picked to host the Olympics. They include more than $250,000 to jewelry businesses in Paris and Qatar.” The issue for the French bank, Société Générale is that under French law it was required to report the original $2MM transfer but failed to do so. Had the bank done so in a timely manner, French authorities may have been able to intercept the alleged bribe payments or at least be made aware of the suspicious transaction.
This matter shows once again the inter-related role of multiple participants in any bribery scheme. As was demonstrated in the Telia Company FCPA enforcement action, it takes multiple players to transfer seven or eight figure bribe payments. When will U.S. authorities or other regulators get serious about stopping these ancillary parties to bribery and corruption?