Global Corruption Roundup

Companies and cases in the news

October 30, 2009
The International Fight Against Bribery; An interactive map examining the world's biggest corruption cases

Interactive Timeline: Corruption in the Crosshairs: A brief history of international anti-bribery legislation

BAE to be prosecuted in Britain
The British arms manufacturer BAE Systems is going to be prosecuted for alleged bribery in Africa and Eastern Europe, Britain's Serious Fraud Office (SFO) announced in early October. The announcement came after BAE missed the October 1st deadline the SFO had set for a plea agreement regarding arms deals in Tanzania, South Africa, the Czech Republic, and Romania in which BAE allegedly paid millions of dollars in bribes. The decision to prosecute BAE marks a sea change for the SFO, which has come under harsh criticism for dropping the long-running investigation into the Al-Yamamah deal, BAE's biggest arms deal with Saudi Arabia. As The Guardian reports, the SFO still needs approval from Britain's Attorney General and is not yet ready to submit a report. This leaves the door open for a possible plea bargain past the October 1 deadline.

First major British company convicted of foreign bribery
Mabey & Johnson, a major manufacturer of steel bridges, has become the first large British company to be convicted of bribery, The Guardian reports. The company admitted paying bribes to foreign officials in six countries -- Angola, Bangladesh and Jamaica among them -- to obtain construction contracts, and has agreed to pay a penalty of more than $10 million to the Serious Fraud Office (SFO). The allegations against Mabey & Johnson, owned by one of Britain's wealthiest families, were first revealed five years ago by The Guardian and the British anti-corruption watchdog, "The Corner House."

L.A. film executives paid bribes for Bangkok Film Festival contract
Behind the glitz and the glamor, the film industry also has its shady side. This became clear when evidence surfaced that a Los Angeles couple paid approximately $1.8 million in bribes for the rights to run the Bangkok International Film Festival. According to the indictment, Gerald Green, 77, and Patricia Green, 52, paid the former governor of the Tourism Authority of Thailand, his daughter and a friend the estimated $1.8 million through bank accounts in Singapore, Britain and the Isle of Jersey.

The bribes netted more than $13.5 million in revenue for the Greens. The two executives were convicted in September and face a maximum of 25 years in prison for money laundering, violating the Foreign Corrupt Practices Act (FCPA), and conspiracy charges. Their sentencing is scheduled for December 17.

TI: Fewer than half of international businesses monitor compliance practices
The anti-corruption watchdog Transparency International says that bribes paid to politicians and government officials in developing or transition countries amount to between $20 million and $40 million annually, according to its Global Corruption Report 2009: Corruption in the Private Sector. While some corruption cases, including the recent Siemens bribery scandal, have motivated many companies to adopt business ethics codes, monitoring these codes remains weak. According to the report, 90 percent of the 200 largest businesses worldwide have adopted codes of conduct but fewer than half follow up with effective monitoring and enforcement practices.

Siemens wants former execs to pay damages in bribery case
Matthew W. Friedrich, the acting chief of the Justice Department's criminal division, called corruption at Siemens "systematic and widespread," yet no top-level executive at the German engineering giant has been held personally responsible for the scandal that cost the company more than $2 billion in fines and other penalties.

But this could soon change. Siemens' current management has taken steps to reclaim some of those costs from executives in charge at the time. The company gave 11 former executives, including former CEO Klaus Kleinfeld and former chairman Heinrich von Pierer, a mid-November deadline to pay part of the costs of the scandal. If they fail to do so, Siemens says it will sue for damages. Kleinfeld and von Pierer resigned in 2007 and have not been charged with any crime. Both have denied being involved in the bribery scandal.

Former Peruvian president Fujimori receives additional prison sentence for bribery
Peru's former president, Alberto Fujimori, was sentenced to 6 years in prison for bribery and wiretapping in a Lima courtroom in September. Already convicted of crimes against humanity for authorizing military death squads, the 71-year-old faces the rest of his life in prison.

During his rule of the country from 1990 to 2000, Fujimori secretly wiretapped politicians, businessmen and journalists. He was also found guilty of paying off a TV station and a newspaper to support his 2000 re-election campaign. Fujimori's chief of security, Vladimiro Montesinos, was earlier found guilty of bribing a congressman. The hand-over of the money was filmed with one of his own video cameras. When these videos surfaced (you can watch the secretly filmed deals on this website), Fujimori fled to Japan. He was arrested in Chile in 2005 while attempting to return to Peru to resurrect his political career.

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