The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Articles By Topic

By Topic: Charitable Donations

  • From Vol. 6 No.24 (Dec. 13, 2017)

    Former High-Level Chinese and Senegalese Officials Charged With Bribing Foreign Leaders in Chad and Uganda

    The U.S. government has laid out lengthy allegations against a former high-level Chinese official who is the executive of a Chinese energy company’s NGO and his “fixer,” a former Senegalese foreign minister, relating to bribes in Chad and Uganda. The schemes allegedly involved charitable “donations” and U.N. connections to secure business opportunities for a Chinese energy company. Sources told The Anti-Corruption Report that the case shows a continuing focus on individual liability, and is notable for the fact that the SDNY worked with the DOJ to bring the case. See “Significant Sentences May Signal Continuing Commitment to Individual FCPA Enforcement” (Sep. 20, 2017).

    Read Full Article …
  • From Vol. 6 No.6 (Mar. 29, 2017)

    Insights From Walmart on Using a Gift Policy to Create a Corporate Culture of Integrity

    Gifts and hospitality are an accepted part of business culture, but they are also the source of many anti-corruption law violations. Because the practice is so entrenched, creating a gift policy that suits a company’s business needs is a significant challenge. In a guest article, Daniel Trujillo, the chief compliance and ethics officer for Walmart’s international operations, discusses how Walmart has implemented a strict no-gifts policy and used it as a tool to underscore the company’s corporate culture rooted in personal and professional integrity. See The FCPA Report’s three-part series on travel and entertainment corruption risks: “Five Hallmarks of an Acceptable Hospitality Expenditure” (Mar. 9, 2016); “Three Musts for a Strong T&E Policy and Five Ways a Company Can Customize Its Program” (Mar. 23, 2016); and “Internal Controls to Ensure the Program Is Working” (Apr. 6, 2016).

    Read Full Article …
  • From Vol. 6 No.3 (Feb. 15, 2017)

    $30M SQM Settlement Demonstrates the Hazards of Discretionary Accounts for CEOs and Charitable Donations to the Politically Connected

    Chemical and mining company Sociedad Química y Minera de Chile (SQM) has agreed to pay more than $30 million in civil and criminal penalties to settle allegations that it made inappropriate payments to politicians and people closely connected to them in violation of the FCPA. Much of the company’s FCPA problems stemmed from the mishandling of a discretionary fund provided for the use of the CEO, through which some $14.75 million was funneled to politicians and their associates, often via charitable foundations. See “Room for Improvement: Miller & Chevalier Survey Reveals Troubling Perceptions of Corruption and Compliance in Latin America” (Sep. 14, 2016).

    Read Full Article …
  • From Vol. 5 No.19 (Sep. 28, 2016)

    A Charitable Donation to Avoid a Fine in China Nets Nu Skin an SEC Fine Instead

    Efforts to evade a Chinese sanction have resulted in an SEC penalty for a health and beauty company based in Provo, Utah. Nu Skin Enterprises, Inc., a manufacturer and direct marketer of cosmetics and nutritional products, has agreed to settle allegations that its subsidiary donated approximately $154,000 to a charity in order to influence a regulatory decision. The company will pay disgorgement in the amount of the fine it avoided paying – $431,088 – plus a $300,000 penalty, according to the SEC’s cease-and-desist order. See “Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations” (Jul. 11, 2012).

    Read Full Article …
  • From Vol. 5 No.19 (Sep. 28, 2016)

    Experts from PwC Discuss Compliance Audits and Common Missteps

    Compliance auditing is a critical component of an effective anti-corruption compliance program, recognized both by the U.S. Sentencing Guidelines and the government’s FCPA Resource Guide. A recent Strafford program, “FCPA Compliance Audits: Lessons From Recent Investigations,” discussed regulators’ expectations regarding compliance auditing, the process for scoping and conducting a compliance audit and common audit pitfalls. David A. Wilson, a partner at Thompson Hine, led the discussion, which featured Sulaksh Shah, a partner at PwC, and James Gargas, a director at that firm. This article discusses some of the key takeaways from the program. See also our interview series, “Best Practices for Performing Compliance Program Assessments: Pamela Passman of CREATe.org” (Apr. 6, 2016); “Susan Markel of AlixPartners” (Feb. 24, 2016); and “Jeffrey Kaplan of Kaplan & Walker” (Nov. 4, 2015).

    Read Full Article …
  • From Vol. 4 No.19 (Sep. 23, 2015)

    Regional Risk Spotlight:  Jay Holtmeier of WilmerHale Explains How to Navigate Bureaucratic Corruption Risks in India

    As the world’s second-most populous country, India presents myriad opportunities for foreign companies to sell and manufacture their products.  As an English-speaking nation with a highly educated populace, it has also become a hub for outsourcing services such as customer relations and technical support.  On the other hand, as a legacy of its colonial past, India is highly bureaucratic and companies doing business there face an intricate web of government regulations and licensing requirements, creating corruption risk.  In this installment of The FCPA Report’s Regional Risk Spotlight series, we talk to Jay Holtmeier, a partner at WilmerHale, about how companies can best navigate corruption risks in India and build strong compliance programs while doing business there.  See also “Regional Risk Spotlight:  Thomas Firestone of Baker & McKenzie Explains How to Navigate Corruption Risks in Russia,” The FCPA Report, Vol. 4, No. 16 (Aug. 5, 2015).

    Read Full Article …
  • From Vol. 4 No.9 (Apr. 29, 2015)

    Checklist of FCPA Issues to Consider Before and After Making a Charitable Donation

    Charitable donations can be effective guises for bribes, but can also be perfectly legitimate and benefit whole communities – in a sense, countering the corrosive impact of corruption.  Separating the altruistic payments from the problematic payments that improperly influence a foreign official can be challenging, especially when a foreign official has some connection to the charity.  The FCPA Report has compiled a non-exhaustive list of considerations to help companies formulate policies for smart charitable giving and to encourage good corporate citizenship while avoiding FCPA violations.  See also “Defining the Corruption Risks of Foreign Political Contributions,” The FCPA Report, Vol. 3, No. 18 (Sep. 10, 2014).

    Read Full Article …
  • From Vol. 4 No.6 (Mar. 18, 2015)

    Ceresney, Focusing on Pharma, Discusses SEC Enforcement Priorities and Compliance Expectations

    Andrew Ceresney, the SEC’s Director of Enforcement, recently reaffirmed the SEC’s emphasis on cooperation and self-reporting and highlighted three pharmaceutical company practices that have led to FCPA enforcement actions.  Speaking at CBI’s Pharmaceutical Compliance Congress in Washington, D.C., Ceresney, like others before him, emphasized the benefits of self-reporting.  See also “Top FCPA Officials Talk Compliance Tips and the Defense Bar Weighs In,” The FCPA Report, Vol. 3, No. 25 (Dec. 17, 2014).

    Read Full Article …
  • From Vol. 4 No.1 (Jan. 7, 2015)

    Recordbreaking Alstom Criminal FCPA Settlement Results from Wide-Ranging Bribery Scheme and Lack of Cooperation

    The Department of Justice ended 2014 with its largest criminal FCPA enforcement action yet.  On December 22, 2014, Alstom S.A., a French engineering, power and transportation company, agreed to pay $772 million to resolve charges relating to widespread bribery involving tens of millions of dollars paid to foreign officials across the globe.  The bribery schemes included travel for foreign officials, bribes disguised as charitable payments and funds funneled to foreign officials via third parties.  The case brings up questions of jurisdiction, the consequences of failing to cooperate, as well as successor liability, given Alstom’s pending sale to General Electric.  The intersection of U.S. and French law may also have affected the terms of this settlement.  With insight from Edward Kang, a partner at Alston & Bird, The FCPA Report analyzes the salient facts and terms of the resolution, and draws compliance takeaways.  See also “Compliance Lessons from Total S.A.’s $398 Million FCPA Settlement: Foreign Cooperation, Compliance Monitors, Broad Jurisdiction and the Effect of Reluctant Cooperation with the DOJ and SEC,” The FCPA Report, Vol. 2, No. 12 (Jun. 12, 2013).

    Read Full Article …
  • From Vol. 3 No.1 (Jan. 8, 2014)

    ADM’s $54 Million Civil and Criminal FCPA Settlement: Numerous Bribery Schemes, Tax Evasion and the Effect of Cooperation

    Archer-Daniels-Midland Company (ADM) and various subsidiaries have resolved FCPA charges with the SEC and DOJ by paying $54 million and entering into a Non-Prosecution Agreement, a guilty plea and a consent decree related to the civil action. The company’s investigation of the various creative bribery schemes began in 2008 and the company’s cooperation played a role in a 33% fine reduction from the Sentencing Guidelines range and the lack of a monitor.  This article details the settlement and compares it to previous ones.  The ADM settlement was the final settlement of 2013, announced on December 20.  For details on the other 2013 corporate enforcement actions, see “FCPA Corporate Settlements of 2013: Details, Trends and Compliance Takeaways,” The FCPA Report, Vol. 2, No. 25 (Dec. 18, 2013).

    Read Full Article …
  • From Vol. 2 No.25 (Dec. 18, 2013)

    Charles Duross and Kara Brockmeyer Discuss What Matters to Regulators When Negotiating FCPA Settlements (Part Two of Two)

    What are FCPA regulators and prosecutors looking for during company presentations?  How can a company shorten the time from its first meeting with the government to the resolution of its FCPA issues?  Charles Duross, Deputy Chief of the Fraud Section of the Criminal Division of the DOJ, and Kara Brockmeyer, Chief of the FCPA Unit of the Division of Enforcement of the SEC, provided detailed insight at a recent ACI International Conference in Washington, D.C. on what regulators are looking for, discussing the government’s FCPA charging philosophies, investigative techniques and enforcement priorities, and dispensing advice about how companies can avoid or decrease FCPA penalties.  Among other things, the regulators highlighted the government’s continued focus on problematic travel and entertainment, warned that the DOJ and SEC will pursue matters involving charitable donations and commercial bribery, and provided tips for expediting government investigations and conducting effective settlement negotiations.  The first part of this article series contained insight from Duross and Brockmeyer about five micro trends within the overarching trend of increased FCPA enforcement: prosecution of individuals, SEC administrative proceedings focused on FCPA violations, increasing coordination between global regulators on anti-corruption matters, the persistence of use of corporate monitors following FCPA settlements and the continued FCPA risk posed by use of third parties.  See also “Top Government and Private FCPA Practitioners Discuss Global Enforcement, Self-Reporting, Facilitation Payments, M&A Due Diligence, Jurisdiction and NPAs,” The FCPA Report, Vol. 2, No. 11 (May 29, 2013).

    Read Full Article …
  • From Vol. 2 No.22 (Nov. 6, 2013)

    Four Takeaways from Stryker’s $13 Million Civil Settlement of FCPA Internal Control Violations

    Six years after disclosing the SEC and DOJ investigation into possible FCPA violations, Stryker Corporation, a Michigan-based medical device company, has agreed to an SEC Consent Order that requires it to pay $13.3 million in disgorgement, interest and fines.  Stryker was not charged with violating the anti-bribery provisions of the FCPA, only the accounting provisions.  The SEC found that Stryker made approximately $7.5 million in profits as a result of the improper payments to foreign officials from 2003-2008 in Mexico, Poland, Romania, Argentina and Greece, which were described in Stryker’s books as legitimate expenses such as travel, charitable donations consulting and commissions. As discussed in The FCPA Report’s Guide to Disclosing Corruption Investigations in SEC Filings, Stryker first disclosed the government’s SEC investigation and Stryker’s cooperation in November 2007.  

    Read Full Article …
  • From Vol. 2 No.17 (Aug. 21, 2013)

    Best Practices for Reviewing Anti-Corruption Compliance Programs: Challenges, Preparation and Risk Evaluation (Part Two of Three)

    As the recent joint DOJ/SEC FCPA Resource Guide makes clear, for a company to earn meaningful credit with the government in an anti-corruption investigation, its compliance program must not only be robust, but also periodically reviewed and improved.  However, neither the Guide nor any other government resource provides specific direction on the appropriate frequency or depth of reviews.  In lieu of specific authority, companies typically turn to best practices and industry norms when deciding how frequently to review and update their compliance programs.  Best practices, though, can be hard to discern and difficult to apply.  Recognizing the challenge and importance of actionable information on this topic, The FCPA Report is publishing a series of three articles on best practices for reviewing anti-corruption compliance programs.  This article, the second in the series, discusses the chief obstacles companies face when conducting a review; provides strategies for creating management buy-in; describes four steps a company should take when preparing for a review; and outlines what risk areas the review should address.  The first article in the series discussed the importance of regular anti-corruption compliance reviews; detailed the government’s expectations for reviews; outlined how to create an efficient and effective compliance review schedule; and specified how companies should staff their compliance reviews.  See “Best Practices for Reviewing Anti-Corruption Compliance Programs: Government Expectations, Scheduling and Staffing (Part One of Three),” The FCPA Report, Vol. 2, No. 16 (Aug. 7, 2013).  The third and final article in the series will provide strategies for conducting the actual review; discuss what a company should do post-review; outline issues surrounding documentation of the review; and examine how FCPA settlement agreements affect reviews. 

    Read Full Article …
  • From Vol. 2 No.1 (Jan. 9, 2013)

    Pharma Giant Eli Lilly Agrees to $29.4 Million Consent Judgment to Settle SEC Charges of FCPA Violations Arising Out of Its Operations in Russia, China, Brazil and Poland

    Eli Lilly and Company (Lilly), a major pharmaceutical company, has consented to the entry of a final judgment against it to settle SEC charges that Lilly subsidiaries violated the FCPA in connection with their operations in China, Brazil, Poland and Russia.  The consent judgment, which includes an injunction against future FCPA violations, calls for an independent review of Lilly’s internal controls and requires Lilly to pay disgorgement, interest and civil penalties of almost $29.4 million.  In its Complaint, the SEC provides insight into its expectations for internal controls.  The Lilly settlement resolves another case in what has been considered an “industry sweep” of pharmaceutical companies by the SEC.  See also “LeClairRyan Webinar Highlights Ten Anti-Corruption Risks for Pharmaceutical and Medical Device Companies and Outlines the Elements of an Effective FCPA Compliance Program,” The FCPA Report, Vol. 1, No. 9 (Oct. 3, 2012).

    Read Full Article …
  • From Vol. 1 No.3 (Jul. 11, 2012)

    Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations

    Charitable donations by companies and their employees present at least two FCPA-related risks.  First, charitable donations may be – or may appear to be – intended to improperly influence foreign government officials associated with a charity.  Second, even bona fide donations may violate the books and records provisions of the FCPA if inadequately accounted for.  Accordingly, companies and employees contemplating charitable donations must contend with potential FCPA consequences.  Unfortunately, in the case of charitable donations – as with many other recurring business questions with potential FCPA implications – there is little authoritative guidance.  Business decision-making in this area is typically guided by experience and best practices.  The purpose of this article is to distill best practices with respect to avoiding FCPA violations when making charitable donations.  In particular, this article: discusses in greater detail the intersection of the FCPA and charitable giving; summarizes the modest volume of relevant precedent (including an ongoing investigation of a big name in the gaming industry); then details ten strategies for approaching charitable donations in a manner intended to mitigate FCPA risk.  In the background of this discussion is a macro trend.  It is becoming increasingly apparent that good corporate citizenship is good business.  As communication channels proliferate, both in terms of technology and access, the number of global customers is increasing and the average customer is becoming better informed.  Customer choices are being swayed by factors beyond product and service quality – factors including corporate reputation.  Reputation, in turn, is powerfully affected by a corporation’s charitable undertakings in the areas where it operates.  A well-orchestrated, well-positioned and judiciously publicized charitable campaign can boost the social profile of a company, which can impact revenue more quickly and directly than ever before.  But a bungled charitable campaign – for example, one that trips up the FCPA – can conjure up the uncharitable old adage: “No good deed goes unpunished.”  Companies should engage in smart charity, and doing so entails staying on the right side of the FCPA.  This article provides a roadmap for doing so.

    Read Full Article …