Doing business in a global marketplace is costly and takes time to acquire all of the permits, licenses, and approvals necessary to conduct legitimate business. Many businesses across all industries feel pressured to get in the game as quickly as possible and resort to illegal measures to subvert the required processes.

Some businesses use bribery as a way to influence foreign government officials and view it simply as a cost of doing business. While bribery is unethical, it is also illegal and a violation of the Foreign Corrupt Practices Act.

In 1977, the United States Congress enacted the Foreign Corrupt Practices Act (FCPA). The FCPA was established to prevent the bribery of foreign officials by U.S. businesses or companies that are listed on the stock exchanges. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) are responsible for enforcing the FCPA.

Bribery and corruption inhibit the growth of legitimate businesses and reduce the public’s confidence in the marketplace. Unfortunately, the telecommunications industry is rife with FCPA violations and has been the target of many enforcement actions.

Ericsson FCPA Case

In 2019, Telefonaktiebolaget LM Ericsson, an international telecommunications company, agreed to pay $1 billion in penalties for violations of the FCPA. The U.S. Department of Justice announced a deferred prosecution agreement with Ericsson to resolve criminal charges related to a bribery scheme involving high level executives across the span of 17 years and five different countries.

According to the DOJ, Ericsson admitted to conspiring with others to violate the FCPA from 2000 until 2016, “by engaging in a longstanding scheme to pay bribes, to falsify books and records and to fail to implement reasonable internal accounting controls.  Ericsson used third party agents and consultants to make bribe payments to government officials and/or to manage off-the-books slush funds.  These agents were often engaged through sham contracts and paid pursuant to false invoices, and the payments to them were improperly accounted for in Ericsson’s books and records.  The resolutions cover the Company’s criminal conduct in Djibouti, China, Vietnam, Indonesia and Kuwait.”

FCPA Complexities

The DOJ made another announcement in September 2021 that a former Ericsson employee would also be individually facing charges related to the company’s FCPA violations. The employee was an account manager working for Ericsson in Africa when he allegedly engaged in a bribery scheme to pay foreign officials in order to obtain telecommunications contracts from 2010 to 2014. This case shows that the federal government will not only seek enforcement action against companies committing FCPA violations, but also the individuals who directly help perpetuate them.

FCPA Whistleblowers

Whistleblowers are a powerful tool in the fight against corruption and bribery in the foreign marketplace. The federal government provides protection from retaliation for whistleblowers. Whistleblowers can also receive a monetary award for providing valuable information that leads to a successful FCPA prosecution. Whistleblowers should consult with an experienced whistleblower attorney to learn more about their rights and protections.

Contact Baron & Budd

With more than 30 years of experience, the attorneys on Baron & Budd’s whistleblower representation team have represented dozens of clients in government fraud cases returning over $5.4 billion to federal and state agencies, with whistleblower recovery shares as high as 49%. They are ready to help if you have evidence of FCPA violations.

Please call (866) 845-2164 or complete our contact form if you would like more information. For more information, see What You Need to Know About Becoming a Whistleblower. Please understand that contacting us does not mean that you have established an attorney-client relationship with Baron & Budd, P.C.