Top 10 International Anti-Corruption Developments for September 2023
Top 10 International Anti-Corruption Developments for September 2023
Designed for busy in-house counsel, compliance professionals, and anti-corruption lawyers, this newsletter summarizes some of the most important international anti-corruption law and enforcement developments from the past month, with links to primary resources. This month we ask: Which U.S. Senator allegedly used his position to benefit the government of Egypt in exchange for gold, cash, and home furnishings? How many countries have pursued anti-corruption enforcement actions against the daughter of Uzbekistan’s former president? Can the U.S. honest services wire fraud statute reach foreign commercial bribery? The answers to these questions and more are here in our September 2023 Top 10.
On September 22, 2023, the U.S. Attorney’s Office for the Southern District of New York announced the unsealing of an indictment charging U.S. Senator Robert Menendez, his wife, and three New Jersey businessmen, Wael Hana, Jose Uribe, and Fred Daibes, with bribery offenses arising from an alleged scheme in which Senator Menendez agreed to use his official position to benefit the government of Egypt. The indictment alleges that Senator Menendez accepted gold bars, cash, a luxury convertible, payments toward his home mortgage, compensation for a low-or-no-show job for his wife, home furnishings, and other things of value in exchange for using his official position to pressure a senior official at the U.S. Department of Agriculture to protect a business monopoly granted to Hana by Egypt, disrupt a New Jersey Attorney General’s criminal case related to Uribe’s associates, and disrupt a criminal case by the U.S. Attorney’s Office for the District of New Jersey against Daibes. According to the indictment, as part of the Egypt-related scheme, Senator Menendez provided sensitive, non-public U.S. government information to Egyptian officials, ghost wrote a letter on behalf of Egypt to other U.S. Senators advocating for them to release a hold on $300 million in aid to Egypt, and promised to use his leadership role on the Senate Foreign Relations Committee to facilitate foreign military financing and sales of military equipment to Egypt. In 2018, the U.S. Department of Justice (DOJ) dropped unrelated corruption charges against Senator Menendez based on allegations that he had done official favors for a Florida-based eye doctor in exchange for lavish travel and campaign contributions.
On September 28, 2023, the U.S. Securities and Exchange Committee (SEC) announced that Clear Channel Outdoor Holdings, Inc., had agreed to pay over $26 million to resolve allegations that it bribed Chinese officials to obtain advertising contracts in violation of the Foreign Corrupt Practices Act (FCPA). According to the SEC order, between 2012 and 2017, the company’s majority-owned Chinese subsidiary provided Chinese government officials with gifts and entertainment, sometimes using payments made to cleaning and maintenance vendors and other third parties, to obtain contracts required to sell advertising services to public and private sector clients for display on public bus shelters and other outdoor displays. SEC alleged violations of the FCPA’s anti-bribery and accounting provisions. The company neither admitted nor denied the findings. The company announced that DOJ had declined the matter.
On September 29, 2023, SEC and DOJ announced that Albermarle Corporation had agreed to resolve FCPA anti-bribery allegations related to the company’s operations in India, Indonesia, and Vietnam and FCPA accounting violations related to those countries, as well as China and the United Arab Emirates. Pursuant to the SEC Order, the company agreed to disgorge approximately $81.8 million and pay prejudgment interest of approximately $21.7 million. Pursuant to a Non-Prosecution Agreement (NPA) with DOJ, the company agreed to pay an additional $98.2 million monetary penalty and approximately $16.7 million in net forfeiture after receiving credit for the disgorgement amount paid to SEC. From a procedural standpoint, the NPA is notable for two reasons. First, this is the first FCPA-related NPA since mid-June 2019. It appears that the company did not receive a declination with disgorgement because DOJ deemed the timing of its self-disclosure to not be “reasonably prompt” for purposes of the Criminal Division’s Corporate Enforcement and Voluntary Self-Disclosure Policy (“CEP”) (which was revised in January 2023). This suggests that DOJ may be reserving NPAs for cases in which DOJ believes that the company imperfectly met the elements of the CEP. Second, this is the first FCPA resolution in which DOJ applied its Pilot Program on Compensation Incentives and Clawbacks (“Pilot Program”), which was announced in March 2023. According to the NPA, DOJ discounted the monetary penalty by $763,453, the total amount of bonuses the company withheld from employees suspected of wrongdoing, under the Pilot Program.
On September 28, 2023, SEC announced that Exelon Corporation and its subsidiary, Commonwealth Edison Company (ComEd), had agreed to pay a civil penalty of $36.2 million to resolve FCPA accounting charges, among others, stemming from an alleged domestic bribery scheme. According to the SEC Order, from 2011 through 2019, ComEd arranged for associates of the then-Speaker of the Illinois House of Representatives, Michael Madigan, to obtain jobs, subcontracts, and monetary payments with the intent to influence Madigan regarding legislation favoring ComEd. ComEd allegedly used third-party vendors to conceal the payments. According to SEC, these actions violated the FCPA’s books and records and internal accounting controls provisions. SEC also filed a civil complaint in the Northern District of Illinois against ComEd’s former CEO, Anne Pramaggiore, alleging that she participated in, and in some instances directed, the bribery scheme. According to the complaint, Pramaggiore aided and abetted the FCPA accounting violations by “knowingly or recklessly coordinating payments to Madigan’s associates … and by approving those payments” and by “knowingly or recklessly [seeking] to circumvent ComEd’s internal accounting controls and falsif[ying] records to disguise such payments.” As we noted in discussing a related criminal case in May 2023, the ComEd case is a useful reminder that a violation of the FCPA’s accounting provisions does not require the enforcement agencies to prove an underlying violation of the FCPA’s anti-bribery provisions. (For more on this point, see our Law360 article.)
On September 11, 2023, DOJ filed a criminal information in the Southern District of Florida charging Orlando Alfonso Contreras Saab with conspiring to violate the FCPA in connection with an alleged scheme to bribe Venezuelan officials to obtain multi-million-dollar contracts with Venezuelan state-owned entities for the production, importation, and distribution of food and medicine to the Venezuelan people. According to the information, the bribe recipients included Jose Gregorio Vielma-Mora, the former Governor of the Venezuelan State of Tachira who oversaw Cobisereta, a state owned and controlled company that purchased food for residents of Tachira, and two unnamed Venezuelan officials alleged to have occupied high-ranking positions in both the Venezuelan Ministry of Finance and other state-owned entities. Contreras Saab allegedly took actions within the United States in furtherance of the bribery scheme and, along with his co-conspirators, directed that bribe payments be made to bank accounts in the Southern District of Florida, among other places. The bribery scheme allegedly took place between 2016 and 2019.
On September 6, 2023, Naeem Riaz Tyab was sentenced in the District of Columbia to three years in prison for conspiring to violate the FCPA in connection with a scheme to bribe high-ranking Chadian diplomats in exchange for help securing oil rights in Chad for a Canadian startup energy company, Griffiths Energy. DOJ announced the charges against Tyab, as well as his guilty plea, in May 2021. According to the indictment, Tyab, a founding shareholder and former director of Griffiths, arranged to pay the bribes to the diplomats through their spouses and a third, unnamed Chadian individual. Based on Tyab’s “substantial assistance to the United States,” DOJ recommended a downward departure from the five-year statutory maximum applicable to Tyab’s conviction of conspiracy to violate the FCPA.
On September 1, 2023, Eastern District of New York Judge Pamela K. Chen vacated the honest services fraud convictions of two defendants prosecuted as part of the global bribery scandal involving the Fédération Internationale de Football Association (“FIFA”) and affiliated continental and regional soccer confederations. In March 2023, after a seven-week trial, a jury convicted Full Play Group, S.A., an Argentine sports marketing company, and Hernán Lopez, the former CEO of Fox International Channels, on wire fraud and money laundering charges related to allegations that they participated in a scheme to bribe South American soccer officials to secure lucrative broadcasting rights. The defendants moved for judgments of acquittal based on two U.S. Supreme Court decisions issued after the jury’s verdict that reversed wire fraud convictions in the U.S. Second Circuit Court of Appeals. Ciminelli v. United States, 598 U.S. 306, 315 (2023), rejected the Second Circuit’s “right to control” theory of fraud, which allowed for a conviction when the “defendant’s scheme denies the victim the right to control its assets by depriving it of information necessary to make discretionary economic decisions.” Percoco v. United States, 598 U.S. 319 (2023), held that a private citizen generally does not owe a fiduciary duty of honest services to the public. Judge Chen held that, under these two cases (and especially the latter), the intangible right of honest services set out in 18 U.S.C. § 1346 “does not extend to foreign commercial bribery.” As summarized by Judge Chen, “the Court concludes that in light of Percoco, the evidence at trial was insufficient to sustain Defendants’ honest services wire fraud convictions under § 1346 because the statute does not apply to foreign commercial bribery schemes.” Judge Chen therefore vacated both the defendants’ wire fraud convictions and their money laundering convictions, which were predicated on the honest services wire fraud convictions. On September 22, 2023, DOJ filed notices of appeal. (For more on this prosecution, see our April 2020, January 2022, and March 2023 Top 10s. For more on an earlier trial involving allegations of bribery in international soccer, see our November 2017, December 2017, and June 2020 Top 10s.)
On September 28, 2023, the Office of the Attorney General of Switzerland (OAG) announced that it had indicted Gulnara Karimova, the daughter of former Uzbekistan President Islam Karimov, related to allegations that she “exploited her dual status as the daughter of the President and as an Uzbek public official” to demand bribes of companies wishing to enter and operate in the Uzbek telecommunications sector beginning in the year 2000. According to the OAG, corrupt funds were moved in complex operations to various bank accounts, through several countries and different companies, before being transferred into Swiss bank accounts for Karimova’s benefit. In addition to Karimova, the OAG indicted the former general director of the Uzbek subsidiary of a Russian telecommunications company for his involvement in the alleged schemes. In announcing the indictment, the OAG touted the international cooperation related to this case. According to the OAG, “[t]he international dimension of the case has led a number of jurisdictions to open criminal investigations, often based on information provided by the OAG. Several criminal proceedings have been instigated, in Sweden, France, Norway, the Netherlands, the United States and the United Kingdom. . . . In addition, the OAG has filed and received numerous requests for mutual assistance, involving 19 countries, in connection with these proceedings.” (For other enforcement actions related to Karimova, see our February 2016, September 2017, October 2018 and March 2019 Top 10s).
On September 26, 2023, the OAG announced that it had indicted an unnamed former employee of Gunvor, a Geneva commodities trading company, charging him with bribery of foreign public officials. The indictment alleges that, between 2010 and 2011, the accused participated in a bribery scheme intended to secure contracts connected with the supply of Congolese crude oil on behalf of his employer. The accused also allegedly attempted to develop a further corrupt scheme with the aim of restoring relations with the Congo that had been broken down. To do so, the employee allegedly travelled to Paris in the spring of 2014 to meet a Congolese official and to offer him the payment of undue advantages in exchange for Gunvor obtaining further shipments of crude oil in the Congo. According to the OAG, the facts of the case are related to its October 2019 conviction of the company.
On September 25, 2023, the UK’s Serious Fraud Office (SFO) announced that Nick Ephgrave had begun his tenure as the agency’s Director. Ephgrave, whose appointment was announced in July 2023, has over 30 years of law enforcement experience and previously served as Assistant Commissioner of the Metropolitan Police Service. On his first day, Ephgrave said he was “committed to building the strong, dynamic and pragmatic authority the UK needs to fight today’s most heinous economic crimes.” Ephgrave takes over from Lisa Osofsky, who served as the SFO’s Director since June 2018. On September 4, 2023, the SFO’s Chief Capability Officer, Michelle Crotty, praised Osofsky’s directorship in the keynote speech at the 2023 Cambridge Symposium on Economic Crime. Crotty highlighted the SFO’s success in obtaining historic bribery penalties against Airbus and Glencore. Both cases, Crotty explained, “reflect the global nature of corporate criminality and economic crime.” Crotty also lauded Osofsky’s “ambitious programme of internal SFO reform,” noting that earlier this year, an outside inspector recognized progress in the SFO’s reforms. Crotty welcomed the arrival of Ephgrave, citing his “near-unrivalled expertise in leading large, complex and multidisciplinary law enforcement organisations.”
 Information, United States v. Contreras Saab, No. 1:23-cr-20364, ECF No. 1 (S.D. Fla. Sept. 11, 2023).
 Judgment, United States v. Naeem Tyab, No. 1:19-cr-38, ECF No. 93 (D.D.C. Sept. 22, 2023).
 Government’s Motion for a Downward Departure and Memorandum in Aid of Sentencing, United States v. Naeem Tyab, No. 1:19-cr-38, ECF No. 84 (D.D.C. Aug. 30, 2023).
 Memorandum & Order, United States v. Full Play Group, S.A., et al., No. 1:15-cr-252, ECF No. 2023 (E.D.N.Y. Sept. 1, 2023).