DOJ Continues Vigorous Pursuit of FCPA Violations

February 6, 2014 — The U.S. Foreign Corrupt Practices Act (FCPA) targets multinational corporations that increase their profits abroad with illegal bribes to foreign government officials. When companies rely on pay-offs to secure overseas contracts, they create an uneven marketplace and undermine fair competition. To discourage foreign bribery, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 provides substantial financial rewards for tipsters with the courage to notify the U.S. Securities and Exchange Commission (SEC) about FCPA violations.

DOJ Files FCPA Action Against Company Officials, Rather Than Their Employer

During the first week of 2014, the U.S. Department of Justice unsealed criminal complaints alleging FCPA violations against two former CEOs and the former general counsel of PetroTiger, Ltd. (“PetroTiger”), an oil and gas services company based in the British Virgin Islands. The three men, all of whom are U.S. citizens, allegedly caused PetroTiger to make payments to an official with a Colombian state-owned oil company in return for the official’s help in securing a $39.6 million contract for PetroTiger.
According to corporate counsel writing for Lexology, the PetroTiger case is notable because it concerns allegations of payments to an official with a state-owned company, rather than an official working directly within a foreign government. The DOJ takes the view that the meaning of “foreign official” within the statute includes employees of state-owned companies, but multinational corporations hope to convince the courts to rule otherwise. The issue is now before the Eleventh Circuit in a case involving employees working for a state-owned telecommunications company in Haiti. In PetroTiger, the DOJ claims that because Colombia controls nearly 90 percent of the state-owned oil company involved, the employee who took PetroTiger’s bribe money was a “foreign official,” even if his job did not entail a traditional governmental function.
The PetroTiger case is also interesting because the DOJ’s charges were brought solely against the individuals allegedly involved and not the company. In addition, a company’s general counsel is not customarily named in an FCPA action as it was in the PetroTiger case.
The case provides strong evidence that the government will continue to pursue foreign bribery charges against companies and their employees who disrupt honest competition among businesses abroad.

Whistleblowers Tip Off SEC to FCPA Violations

Waters & Kraus enjoys a national reputation in the field of qui tam litigation because we’ve earned it. We understand how to collaborate with the SEC in whistleblower cases and we know how to protect your interests during the process. At Waters & Kraus, we’ve represented many whistleblowers in your position. Contact us or phone our FCPA attorneys at 855.784.0268 to discuss how we can work together to accomplish what’s right.

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