Mead Johnson Reveals Possible FCPA Violations in China

February 28, 2014 — The U.S. Foreign Corrupt Practices Act (FCPA) makes it a crime for corporations to build their business abroad with illegal bribes to foreign government officials. Companies that engage in foreign bribery as a way to nail down contracts overseas create a lopsided marketplace that puts honest competitors at an unfair disadvantage. To redress the problem, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 instituted a whistleblower program that makes rewards available for tipsters who collaborate with the U.S. Securities and Exchange Commission (SEC) about FCPA violations.

Illinois Baby Formula Maker Subject of Probe into FCPA Violations

Mead Johnson Nutrition’s 2013 annual report discloses that some of the company’s business dealings in China may have violated the FCPA. The Illinois maker of infant and child nutrition products paid China $33.4 million in penalties in 2013 in connection with alleged antitrust violations. China’s probe into baby formula prices there led to Mead Johnson’s agreement to cut formula prices in China by as much as 15 percent, and to payment of a multimillion dollar penalty to the National Development and Reform Commission in China.
Mead Johnson had already revealed in October 2013 that it had launched an internal review of expenditures made for the purpose of promoting its baby products in China. According to Business Week, Mead Johnson was also cooperating with the SEC’s probe into the matter. Now Mead Johnson has made the additional revelation that the expenditures may have violated company policies as well as the FCPA.
Chris Perille, a company spokesman, would not say whether the alleged FCPA violations were part of a concerted practice for Mead Johnson’s China operations or just an isolated incident.

Whistleblowers Tip Off Government to Illegal Foreign Bribery

At Waters & Kraus, our lawyers have long experience in representing company insiders in qui tam litigation. We know it can be difficult to come forward and notify the government about an employer’s FCPA violations. Our whistleblower attorneys are committed to protecting tipsters’ interests. Contact us by email or call our FCPA lawyers at 855.784.0268 to speak with an attorney about how we can work together to stop illegal foreign bribery.

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