Foreign Corrupt Practices Act (“FCPA”)
For those of you doing business in notoriously corrupt countries, I hope you saw the front page story in the October 8, 2010 edition of The Wall Street Journal detailing the Justice Department’s current FCPA investigation of Schlumberger Ltd. related to its dealings in Yemen. Schlumberger’s legal woes result from its alleged acquiescence in urgings from Yemen’s Petroleum Exploration and Production Authority to hire a local Yemeni intermediary, Zonic Invest Ltd., an entity owned by the nephew of Yemen’s president. (According to The Wall Street Journal story, Schlumberger allegedly paid Zonic a total of $1.38 million, including a $500,000 signing bonus and payments for “services” of dubious authenticity.) Schlumberger would be well advised to take the Justice Department’s investigation seriously, especially in light of a number of recent settlements and fines paid by companies accused of violating the anti-bribery provisions of the FCPA, e.g.,
Company Penalties and Fines
Halliburton Co./KBR $579 million
Baker Hughes $44 million
Siemens AG $100 million
Novo Nordisk A/S $9 million
UT Starcom Inc. $3 million
ITT Corporation $1.6 million
The above fines and penalties underscore both the significant liability attaching to FCPA violations as well as the greatly enhanced enforcement activity currently being pursued by the U.S. Department of Justice and various international law enforcement entities.
–Charles V. McPhillips
