Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act (FCPA) is a federal law established in 1977 by the Congress that prohibits the bribing of international companies and foreign officials. Under this program, overseas corporations operating in the U.S. must also maintain a high standard of accounting by having accurate financial and business records. Whistleblowers who want to expose any fraudulent activity involving offshore companies should do so through the FCPA.
As the world becomes more closely entwined through trade and commerce, the United States has redoubled its efforts to fight corruption abroad. In today’s global economy, corrupt foreign business deals affect the quality of all kinds of goods and services. This whistleblowing program protects the functionality and integrity of international commerce and the American reputation worldwide.
FCPA Protections and Rewards
Because the FCPA is a law without an administering federal organization of its own behind it, it cannot be considered a full-fledged whistleblower program. However, it is jointly enforced by two main organizations: the Securities and Exchange Commission(SEC) and the U.S. Department of Justice. Because of this, the qui tamrelators’ provisions that normally apply to any other program, including the rewards and protections are determined by the SEC Whistleblower Program.
Relators can report fraud anonymously by hiring an attorney to represent them and are legally protected from any form of retaliation by their employers.
An individual whose claim is successful is eligible for a percentage between 10% and 30% of the total amount recovered by the authorities after conducting the investigation.
Fraud Examples Covered By the Foreign Corrupt Practices Act
The Foreign Corrupt Practices Actprohibits a U.S. company to bribe a foreign official or anyone who works for a government in an official capacity. Since these definitions are quite broad, there are several types of fraudulent schemes that violate this law.
Improper accounting and record keeping
Many corporations will often attempt to conceal bribes or other forms of illegal payments by manipulating their internal records. This unlawful practice violates the FCPA no matter whether the record-keeping manipulation occurred abroad or domestically.
Bribing or providing kickbacks to foreign officials
Providing either monetary or non-monetary kickbacks is an illegal practice that falls under this law’s jurisdiction. Anything that can be considered valuable to the recipient qualifies as a potential violation of the FCPA. These gifts can be material items, such as cars or jewelry, as well as vacations or preferential treatment for company jobs. Professionals in any industry can be considered officials if they are employed by a national government, such as doctors at public hospitals or managers of state-owned power plants.
Prominent FCPA Cases
- In December 2008, the German automation technology giant Siemens settled with the DOJ for $800 million over charges that it consistently violated the law over a 20 year period. The company paid hundreds of millions of dollarsin bribes to overseas entities around the globe. This remains the largest FCPA settlement to date.
- In February 2009 Halliburton/KBR was fined $402 million dollars for paying $182 million worth of kickbacks to Nigerian officials between 1995 and 2004 to secure the construction of natural gas facilities.
- In March 2010, the defense contractor BAE Systems paid a $400 million fine and pled guilty to illegally selling weapons abroad. BAES facilitated these sales by bribing unnamed “marketing advisors” through Caribbean shell companies.
Report Foreign Corrupt Practices Fraud
The FCPA does not require whistleblowers to be U.S. citizens: anyone who has privileged information about corrupt business practices is eligible to blow the whistle. These cases, however, often fall under both U.S. law and the laws of the foreign company’s country of origin, quickly becoming a complex web of legal considerations. If you or someone you know are aware of any ongoing illegal scheme, you should contact one of our attorneys immediately.
If you are unsure whether you have an FCPA case, contact us for a free & confidential consultation. Get in touch with an expert lawyer and do your duty to assist the American justice today. File a form or call at (800) 689-8552
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