A law passed in 1977 to stop companies with businesses in the U.S. to bribe foreign entities have brought U.S. billions of dollars, and the list of companies forced to pay include a low presence of U.S. companies, according to the New York Times (NYT).
The list of companies that have paid the highest fines to settle under this Act – Foreign Corrupt Practices Act – includes Siemens and Daimler (both German companies), Alcatel-Lucent (France) and JGC Corporation (Japan). The only U.S. company in top 10 is KBR, formerly Kellogg Brown & Root, a subsidiary of the oil services provider Halliburton.
In total, the top 10 companies have paid nearly $3.2 billion to escape the long arm of the U.S. authorities. Since the introduction of the law in 1977, its scope was extended from U.S. companies to an increasingly broad category, which includes companies listed in the U.S., whose bonds are traded in the U.S. or are doing business in the U.S.
The most famous case is that of Siemens, which paid $800 million to the U.S. and another $800 million to the German state to settle a bribery investigation. The agreement took place in 2008, but the trial of the executives continue. In December, eight former executives were accused of paying bribes of $100 million to Argentine officials, including former president Carlos Menem, in order to get a $1 billion contract to Siemens. All eight directors live in Argentina, Germany or Switzerland and none of them was arrested or extradited, a long and complicated procedure.
Siemens is an example for how the U.S. fine companies. The bribery was done in Argentina. People who bribed were not U.S. citizens, and those who accepted it were Argentinean officials. Siemens is a German company. U.S. authorities have used the fact that Siemens’ bonds are traded in the U.S. to force the German company to settle.
Many of the cases are easy wins for the Department of Justice, but others need several years of investigation and will get to the negotiations stage for a settlement agreement during this period, although in the meantime companies stopped this practice or they were not aware they fall under the American law, writes New York Times.
“Many of the cases are milking cows for the Department of Justice. It is a government program beneficial to the U.S. Treasury,” said Michael Koehler, an assistant at Southern Illinois University School of Law.
Justice Department says that it is in the U.S. interest to investigate any cases of bribery, wherever they occurred. American executives have long complained that they are disadvantaged compared to foreign competitors who pay bribes. U.S. officials say that, by investigating foreign companies, they set equal terms for all businesses.
Alcoa, Goldman Sachs, Pfizer and Wal-Mart are under investigation for violations of the law. Avon announced in august that is in talks for a settlement with the U.S. authorities to conclude an investigation of payment of bribes to foreign officials.
Reply