2018: The Year in Bribery

As 2018 passes on, one of the extraordinary aspects of the past year was the seeming normalization of bribery and corruption in the media. Yet despite the year’s headlines dominated by stories regarding sexual harassment, cyber security and data privacy, bribery was nonetheless the clear winner in news stories.

One-Third of all News Headlines Involve Bribery & Corruption

An analysis of one news monitoring service found bribery and corruption accounting for roughly one-third of all headlines. The most prevalent area of business involved governments, including those of Brazil, Peru, China, Argentina, Hong Kong, Mongolia, Atlanta and New York State.

It also included these industries and related companies (a partial list):

  • Auto: Fiat Chrysler
  • Defense: Airbus, Chemring
  • Energy: Eni Energy
  • Financial: Societe Generale, Credit Suisse
  • Food: Jim Beam
  • Healthcare: Fresenius
  • Industrial: Samsung
  • Mining: Kinross Gold, Alabama Coal
  • Oil and Gas: Shell, Eni
  • Pharma: GlaxoSmithKline, Sanofi
  • Retail: Walmart
  • Sports: FIFA, San Diego State University, University of Kansas, North Carolina State, Adidas

A review of preliminary data, through Violation Tracker, on US regulatory enforcement actions begun or advanced in 2018 found the following:

  • Foreign Corrupt Practices Act penalties (before reductions) came to almost $500 million for just eleven companies (vs. $1.3 billion in 2017 involving fourteen companies).
  • Another $87 million in fines were identified in bribery/kickback schemes under False Claims Act violations.
  • An indeterminate more likely are part of fraud enforcement actions; bribery often is coupled with fraud, though not always called out in enforcement headlines.

Is this the new norm?

What’s surprising by this information is how normal bribery headlines, government charges and fines have become. While Trace International released a study in March that indicated US enforcement actions had slightly dipped from the prior year, across the board global enforcement actions continued to run at a high rate.

So, while bribery and corruption stories may lose some of their luster in place of hot topics such as harassment, cybersecurity and data privacy, these issues still command a lion’s share of regulators’ attention and continue to bring in millions and millions of dollars in fines from companies that get it wrong.

Given this information, business leaders and compliance officers are reminded to maintain a watchful eye over at-risk business activities where bribery may be prevalent within an industry. Further, this is a good time to shore up practices at preventing, detecting, mitigating and quickly responding to suspected bribery. Specifically, recent years have seen a rise in enforcement actions aimed at bribery involving third parties, such as business partners. The “conscious disregard,” “willful blindness,” and “deliberate ignorance” defenses are being proven as poor risk management practices.

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