Reinhard Siekaczek, a skeptical former accountant of Siemens A.G., expressed little optimism that Siemens’ violations of German law and the U.S. Foreign Corrupt Practices Act’s (“FCPA”) prohibitions against bribing foreign officials would deter others in a world full of corruption. Siekaczek states, “[p]eople will only say about Siemens that they were unlucky and that they broke the 11th commandment. The 11th commandment is: ‘Don’t get caught.’” At Siemens, Siekaczek participated in large-scale bribery by helping maintain a budget of tens of millions of dollars per year that was dedicated to bribing foreign officials, what one bureaucrat described as the “Siemens’ business model” and “institutionalized corruption.” Eventually, Siemens and many of its subsidiaries paid a heavy price for getting caught: over $2.6 billion spent in fees, fines to the U.S. and Germany, and corporate reform measures to replace corruption with compliance.
While many American businesspeople and companies who understand the realities of doing business in foreign countries would likely agree with Siekaczek’s lamentation, the problem with the 11th commandment is that “not getting caught” for bribery is becoming increasingly difficult in the U.S. This is so not only because of the FCPA prevents the making of “corrupt payments” to foreign officials for the purpose of promoting business interests, but because the Department of Justice is strictly enforcing the FCPA by investigating more cases levying extremely high fines in plea bargains, and even performing sting operations through the Federal Bureau of Investigation.
Avoiding notice is likely hard enough in a situation where only one individual is paying bribes, but bribery naturally becomes harder to conceal when multiple parties are involved. Such is the case in the world of international project finance. Because the FCPA’s reach is not restricted to the people who physically pay the money or make an improper offer, liability can extend much further than U.S. companies and businesspeople might expect and hope. Consequently, complicated issues of liability exist for many project finance participants because any one project can include many people and entities—lenders, agents, project sponsors, project companies, constructors, operators, and so forth. Thus, rather than hoping to “not get caught,” project finance participants should take active steps throughout the duration of a project to identify potential violations and prevent bribes. This strategy presents participants with the best opportunity for avoiding FCPA liability, possible jail time, and severe economic and other consequences to the project.
Clinton R. Long, When “Not Getting Caught” Is Not Enough: Preventing Foreign Corrupt Practices Act Violations and Liability in International Project Finance, 3 Pace Int’l L. Rev. Online Companion 111 (2012).