We have more than 70 years of experience conducting background investigations of individuals around the world. This includes pre-transaction due diligence focusing on the reputations of individuals central to business transactions. Information is gathered online and through conducting searches in relevant countries. We also access a network of sources with experience in business, government, law enforcement, journalism and specialty areas, to obtain intelligence. Experience has shown that the class of information our clients seek in an FCPA setting is rarely lying in the open, on Google, or in a regulatory database. It can be found only by making thoughtful inquiries of targeted sources with real-world experience and relevant knowledge of the subjects. RSI has completed due diligence cases throughout the world including but not limited to Brazil, China, Dubai, most European countries, India, Indonesia, Japan, Korea, Mexico, Panama, Saudi Arabia and Russia. In addition, a senior member of our staff spent nine years as an investigator with the Division of Enforcement a the SEC.
RISK MANAGEMENT UNDER THE FOREIGN CORRUPT PRACTICES ACT
On July 25, 2010, Attorney General Eric Holder stated, “I have made combating corruption, generally and in the United States, a top priority.” To this end, the DOJ FCPA unit is scheduled to grow by 50 % in 2010 and 2011 and is currently pursing more than 120 FCPA investigations. In 2010 the Securities and Exchange Commission established its own FCPA unit with offices across the country. Trends include:
- Aggressive enforcement in the United States;
- Increased cooperation with international regulators;
- Larger corporate penalties;
- Prosecution of individuals;
- Expansive jurisdictional reach.
An example is the investigation of liquefied natural gas facilities on Bonny Island in Nigeria. To date, Kellogg Brown & Root LLC and Halliburton (U.S.), Technip S.A.(France) and Snamprogetti Netherland B.V. a Dutch subsidiary of ENI S.pA (Italy) paid fines and disgorgements of $1.28 billion to settle charges brought by DOJ and the SEC for violating the FCPA. Substantial payments were made by indigenous joint venture partners who operated in Nigeria for years. In addition, Albert Jack Stanley, the former head of Kellogg Brown & Root pleaded guilty to charges of violating the FCPA involving Bonny Island. He agreed to 7 years in prison and $10.8 million in restitution.
THE VALUE OF DUE DILLIGENCE
The FCPA prohibits corrupt payments through intermediaries defined as agents, joint venture partners and vendors. According to an official publication issued by the DOJ, U.S. companies should, “exercise due diligence and take all necessary precautions to ensure that they have formed a business relationship with reputable and qualified partners and representatives. Such due diligence may include investigating potential foreign representatives and joint venture partners…” Reputational due diligence is an integral part of corporate risk management under the FCPA.