Source : MainJustice.com
Posted by: Webmaster on 16-Jul-2010
Lawyers and bribery watchdogs are concerned about the almost £30 million BAE Systems will pay to Tanzania as part of the defense contractor’s settlement with the U.K. Serious Fraud Office to settle an investigation into whether it enticed Tanzanian officials to buy a radar system with illicit payments, the Washington Post and Bloomberg news reported Thursday.
“There is a grave danger that you’re returning money to the very people that took bribes in the first place,” Mark Mendelsohn, the former head of the U.S Justice Department’s Foreign Corrupt Practices Act team, said in the article. “The last thing one wants to do is fuel corruption in the name of fighting it.”
The SFO announced on Feb. 5 that BAE, Europe’s largest weapons manufacturers, had agreed to plead guilty to failing to keep reasonably accurate accounting records in relation to its activities in Tanzania. The U.S. Justice Department simultaneously announced that BAE would pay $400 million in fines for making false statements to the U.S. government about its anti-corruption efforts.
Under the U.K. agreement, BAE agreed to pay £30 million to Tanzania. In turn, the SFO said it would end its investigation into widespread allegations of BAE bribery and corruption around the world. The SFO settlement was immediately criticized as a slap on the wrist for a company that has allegedly paid millions in bribes.
SFO Director Richard Alderman has said that compensating victims of corruption is a priority for the office, and the Tanzanian payouts would the highest reparations sought by the SFO in the corporate-bribery cases it has pursued, the Post story said. But identifying the victims and determining how the money will be used is difficult
“Is it the people of the country whose government took payments? Often it is,” said Mendelsohn, now a partner at Paul Weiss Rifkind Wharton & Garrison LLP in Washington. “Are the victims the shareholders of the bribe-paying company? Maybe, maybe not.”
William “Billy” Jacobson, a former assistant chief on the U.S FCPA team, said the SFO’s approach differs drastically from the DOJ’s. In the U.S., the criminal penalties levied as the result of an FCPA enforcement action are returned to the Treasury Department.
“We’ve thought at DOJ from time to time about giving restitution, giving money to some of these governments,” Jacobson, who is now co-general counsel at Weatherford International, told Main Justice in March. “The problem is, almost by definition, you’re talking about corrupt governments. So we decided it really wasn’t the way to go. Maybe in some FCPA cases it is OK and in other’s it’s not, but as a matter of course DOJ doesn’t do it that way, and the SFO decided to do it that way.”
Alderman defended the SFO’s reparations policy.
“Some of our cases involve British companies and artificially overpriced contracts for business overseas,” Alderman told the Post. Such contracts “in a developing country could have a negative impact on infrastructure development, education or humanitarian projects” hurting “ordinary people.”
According to Post, returning the money has proven difficult for the SFO as two countries have refused to accept it in another case, perhaps seeing taking the payout as an admission of guilt.