Foreign Bribery And Fcpa-Related Cases
The Foreign Corrupt Practices Act (FCPA) of 1977 is a U.S. federal law prohibiting:
Anti-bribery: Bribing foreign government officials to win or retain business.
Accounting provisions: Publicly traded companies must maintain accurate books and records and adequate internal controls.
Below are some of the most important and illustrative cases in FCPA history described in detail.
1. Siemens AG (2008) — One of the largest FCPA Settlements in History
Facts
Siemens, a German engineering and electronics conglomerate, engaged in a widespread system of bribery across several countries including Argentina, Bangladesh, Venezuela, Iraq, and others. The company kept slush funds and off-book accounts to pay foreign officials to secure public works contracts.
Conduct
Over $1.3 billion in bribes were paid.
Bribes were disguised as “consulting fees,” false invoices, and third-party intermediaries.
Payments were made to senior government officials to obtain large infrastructure contracts.
Legal Outcome
Siemens paid $800 million in combined DOJ and SEC penalties in the U.S.
Additional €595 million to German authorities.
Several executives were criminally charged.
Importance
This case set the benchmark for global anti-corruption enforcement, showing that:
FCPA applies even to non-U.S. companies if they are listed on U.S. stock exchanges.
Systemic internal controls failures trigger massive accounting violations.
2. Walmart (2019) — Internal Controls & Books-and-Records Failures
Facts
Walmart was accused of paying intermediaries in Mexico, India, Brazil, and China who then passed bribes to government officials to speed up permits and zoning approvals for new retail stores.
Issues
The bribes were not directly paid by Walmart’s U.S. parent, but by its foreign subsidiaries.
Walmart failed to implement proper internal controls to prevent or detect such payments.
Executives allegedly ignored internal warnings.
Legal Outcome
Walmart paid $282 million in penalties (SEC + DOJ).
The DOJ emphasized the importance of corporate culture and compliance programs.
Importance
This case expanded the understanding that:
Even “small administrative bribes” connected to business expansion violate the FCPA.
Parent companies are responsible for subsidiary control failures.
3. Petrobras (2018) — Foreign State-Owned Enterprise & Shareholder Fraud
Facts
Petrobras, Brazil’s state-controlled oil company, was involved in an enormous kickback scheme, paying politicians and political parties in Brazil through inflated contracts with construction companies.
FCPA Connection
Though Petrobras itself was the “victim” in Brazil’s criminal probe (“Operation Car Wash”), it was charged in the U.S. because:
It sold securities on the New York Stock Exchange.
Petrobras executives falsified financial statements and misled investors.
Legal Outcome
Petrobras paid $853 million in penalties.
Funds were shared between U.S. and Brazilian authorities.
Importance
This case clarified:
State-owned enterprises can be both “foreign officials” and “issuers”.
Fraud involving concealment of bribery links directly to FCPA accounting violations.
4. Odebrecht & Braskem (2016) — Coordinated International Enforcement
Facts
Odebrecht (Brazil’s construction giant) and Braskem (a petrochemical company) ran a long-term bribery operation, paying officials in 12+ countries including:
Brazil
Peru
Colombia
Mexico
Dominican Republic
They kept dedicated “bribery departments” using encrypted messaging and offshore accounts.
Legal Outcome
Odebrecht and Braskem paid $3.5 billion globally (largest-ever global bribery settlement at the time).
Senior executives were imprisoned in Brazil.
Importance
This case demonstrated:
International cooperation among U.S., Swiss, and Brazilian authorities.
Use of sophisticated criminal structures increases penalties.
5. Alstom S.A. (2014) — Failure to Cooperate Increases Penalties
Facts
Alstom, a French power and transportation company, paid bribes in:
Indonesia (for power plant projects)
Saudi Arabia
Egypt
Bahamas
Third-party consultants were used to channel bribes.
Key Element
Alstom initially refused to cooperate with U.S. investigators, which significantly worsened its punishment.
Legal Outcome
Alstom paid $772 million — the largest FCPA criminal fine at the time.
Several executives were prosecuted individually.
The company was acquired by GE shortly afterward.
Importance
DOJ stressed that:
Cooperation is critical.
Obstruction or delay increases penalties dramatically.
6. Telia Company (2017) — Bribery in Uzbekistan Telecom Market
Facts
Telia, a Swedish telecom company, bribed Uzbek officials (linked to the President’s daughter) to enter the Uzbek telecom market.
Conduct
Paid approximately $330+ million in bribes.
Used shell companies and false consulting contracts.
Legal Outcome
Telia paid $965 million in global penalties.
Executives from multiple countries were prosecuted.
Importance
Shows:
Telecom sector is highly exposed due to licensing requirements.
“Foreign officials” include family members of heads of state who control state assets.
7. KBR / Halliburton (2009) — Bribery Through Joint Ventures
Facts
KBR (then part of Halliburton) bribed Nigerian officials to win construction contracts for LNG facilities on Bonny Island.
Conduct
Used a consortium (joint venture) to funnel $180+ million in bribes.
Offshore accounts in Gibraltar and Japan were used.
Legal Outcome
KBR paid $402 million criminal fine.
Halliburton paid $177 million civil penalties.
Former CEO of KBR, Albert “Jack” Stanley, was sentenced to prison.
Importance
Established that:
Joint ventures are responsible for bribery even if only one partner pays.
Senior executive involvement dramatically increases liability.
8. Panalpina (2010) — Customs Clearance Bribery Case
Facts
Panalpina, a freight forwarding company, paid bribes to customs officials in:
Nigeria
Angola
Brazil
Russia
Purpose: to clear shipments faster or avoid regulations.
Legal Outcome
Panalpina and several clients (Shell, Transocean, etc.) paid over $236 million in penalties.
Importance
Created precedent that:
Logistics and freight companies face high FCPA risk.
“Facilitating payments” exception is narrow and cannot justify repeated bribery.
Summary Table
| Case | Year | Penalty | Key Lesson |
|---|---|---|---|
| Siemens | 2008 | $800M (US) | Systemic bribery = huge penalties |
| Walmart | 2019 | $282M | Internal controls failures trigger liability |
| Petrobras | 2018 | $853M | SOEs can be issuers & victims |
| Odebrecht/Braskem | 2016 | $3.5B | Global coordination & massive schemes |
| Alstom | 2014 | $772M | Non-cooperation increases penalties |
| Telia | 2017 | $965M | Bribes to political families = FCPA |
| KBR/Halliburton | 2009 | $579M | Joint venture bribery liability |
| Panalpina | 2010 | $236M | Supply chain bribery risks |
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