Every time The Man from FCPA thinks corruption scandals cannot get any bigger, they do. In 2012 we had the revelations about Wal-Mart and alleged corruption in Mexico. In 2013 there was GSK in China, where the first western company was prosecuted for violation of domestic Chinese anti-bribery laws. In 2014 there was Petrobras, which may yet bring down the Brazilian government. In 2015 there was FIFA, which did bring down the entrenched leadership. Now in 2016 we have Unaoil. Last week, in what can only be termed a blockbuster piece in the Huffington Post, there was a story involving the company Unaoil, which may well be one of the harbinger events in the global fight against corruption and in anti-corruption compliance.
The company, based in Monaco but incorporated in the British Virgin Islands, has done what is essentially facilitation work for a wide variety of construction and extractive mineral projects across the globe, many in countries or regions with a high propensity for bribery and corruption. Companies listed in the Huffington Post article include Halliburton, its former subsidiary KBR, Samsung, and Rolls-Royce. Countries where Unaoil did business include places such as Iraq, Kazakhstan, Libya, Syria, Tunisia, and other countries in Africa, the Middle East, and the former Soviet Union.
Unaoil operated a traditional bribery scheme by taking percentage fee for a transaction and using some of the commission to pay bribes to obtain contracts for its clients, all the while creating paper programs and documents that allowed it to pass anti-corruption muster.
The story has already brought a response from Trace International, which had issued its Trace Certification and Due Diligence Report to Unaoil attesting to ownership structure and commitment to do business in compliance with anti-bribery laws such as the Foreign Corrupt Practices Act and the U.K. Bribery Act. In a written statement Trace founder Alexandra Wrage said, “We can hope the Unaoils of the world—cynical, self-congratulatory and fraudulent—come along only rarely.”
With the Justice Department doubling the size of its FCPA unit from 10 to 20 lawyers and the FBI creating three new investigative units dedicated to investigating bribery and corruption, this may be a bellwether investigation and enforcement action. FCPA blogger Tom Fox has some large doubt as to the quantity and quality of the Unaoil internal investigation and cooperation with the Justice Department, so it may have been a propitious time for the government to have ramped it personnel.