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FCPA Blog Daily News

Entries in Bulgaria (15)


Bulgaria anti-graft journalist raped, murdered

The body of a Bulgarian journalist who reported on alleged corruption involving the local handling of EU funds was found in the city of Ruse Saturday.

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Event: Doing good in Sofia, Bulgaria (December 4)

Photo courtesy of the IWC-SofiaEarlier this week, Richard Bistrong talked in a post about expats engaging with the local community as a way to understand the challenges and struggles of people who live nearby.

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Bulgaria anti-graft unit could target more than 7,000 officials

Bulgaria's Deputy Prime Minister Meglena Kuneva (Image courtesy of the Republic of Bulgaria)Bulgaria's deputy prime minister announced the launch of a special unit to investigate major cases of government graft. The new unit started operations Monday under Chief Prosecutor Sotir Tsatsarov. 

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Ukraine and the New Cold War: Compliance and enforcement risks rise in Eastern Europe

Since the start of the Ukraine crisis, NATO Secretary General Anders Fogh Rasmussen has called on NATO countries to increase defense spending. Poland has announced plans to accelerate a major military modernization program. And Latvia, Lithuania, Romania and the Czech Republic have all promised to increase their defense spending.

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DOJ declination for Merck

Big-pharma Merck said an SEC filing Thursday that the DOJ has closed its FCPA investigation of the company.

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Can Bulgaria ever meet EU clean-government standards?

Marin Raykov became the Bulgarian Acting Prime Minister in March 2013 (photo courtesy of Wikimedia Commons)Just two percent of companies win 98 percent of all public procurement deals in Bulgaria, according to the head of BORKOR, Bulgaria’s state anti-corruption and organized crime agency.

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Spanish pharma wins DOJ declination

In an SEC filing this week, Spanish pharmaceutical firm Grifols SA said the DOJ issued an 'official declination to all inquiries related to the possible violation of the Foreign Corrupt Practices Act (FCPA) that were underway since July 2009.'

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Mandatory polygraph tests for all Singapore soccer players

Photo courtesy of Limestone Technologies IncProfessional footballers in Singapore are now required to take polygraph tests and answer questions about match fixing and corruption in the sport.

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Pfizer, Wyeth Pay $60 Million In Settlement

The SEC said Pfizer's employees and agents paid bribes in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia. Improper payments went to foreign officials 'to obtain regulatory and formulary approvals, sales, and increased prescriptions for the company’s pharmaceutical products.'

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A Blight On Their Lives

Dan Bilefsky of the New York Times is a roving reporter with a knack for revealing the heart of things. He's done that now for the problem of petty corruption in Romania. His story is about the human consequences of the countless little bribes so often ignored and unreported, and categorized as those pesky and insignificant facilitating payments. Here's how he starts:

BUCHAREST, Romania — Alina Lungu, 30, said she did everything necessary to ensure a healthy pregnancy in Romania: she ate organic food, swam daily and bribed her gynecologist with an extra $255 in cash, paid in monthly installments handed over discreetly in white envelopes.

She paid a nurse about $32 extra to guarantee an epidural and even gave about $13 to the orderly to make sure he did not drop the stretcher.

But on the day of her delivery, she said, her gynecologist never arrived. Twelve hours into labor, she was left alone in her room for an hour. A doctor finally appeared and found that the umbilical cord was wrapped twice around her baby’s neck and had nearly suffocated him. He was born blind and deaf and is severely brain damaged.

Now, Alina and her husband, Ionut, despair that the bribes they paid were not enough to prevent the negligence that they say harmed their son, Sebastian. “Doctors are so used to getting bribes in Romania that you now have to pay more in order to even get their attention,” she said.

Romania, a poor Balkan country of 22 million that joined the European Union two years ago, is struggling to shed a culture of corruption that was honed during decades of Communism, when Romanians endured long lines just to get basics like eggs and milk and used bribes to acquire scarce products and services.

Alarm is growing in Brussels that Romania and other recent entrants to the European Union are undermining the bloc’s rule of law. The European Commission, the European Union’s executive body, published a damning report last month criticizing Romania for backtracking on judicial changes necessary to fight corruption. And Transparency International, the Berlin-based anticorruption watchdog, ranked Romania as the second most corrupt country in the 27-member European Union last year, behind neighboring Bulgaria.

Those who have faced corruption allegations in recent years have included a former prime minister, more than 1,100 doctors and teachers, 170 police officers and 3 generals, according to Romanian anticorruption investigators.

Romanians say it is the everyday graft and bribery that blights their lives, and nowhere are the abuses more glaring than in the socialized health care system.

Interviews with doctors, patients and ethicists suggest that the culture of bribery has infected every level of the system, sometimes leaving patients desperate.

One doctor said a patient recently offered him a free shopping trip to Dubai . . . .

Dan Bilefsky's article is well worth a trip to the New York Times here.

The EU's February 12, 2009, "Interim Report from the Commission to the European Parliament and the Council" on Romania's progress to remedy judicial shortcomings and fight against corruption can be downloaded here.


Aon Pays £5.25 Million Corruption Fine

The U.K.'s Financial Services Authority said yesterday that it has fined Aon Ltd £5.25 million ($8.05 million) for failing to recognize and control the risks of overseas payments being used as bribes. The fine is the largest the FSA has levied for financial crimes. Aon Ltd is the principal U.K. subsidiary of Chicago-based Aon Corporation, the world's biggest insurance broker.

Aon Corporation disclosed in November 2007 an internal investigation into possible violations of the Foreign Corrupt Practices Act and non-U.S. anti-corruption laws. Aon said then in its Form 10-Q that it had self-reported the investigation to the Department of Justice, the Securities and Exchange Commission and others, and that it had already agreed with U.S. prosecutors to toll any applicable statute of limitations. The U.S. investigations are still pending.

This is now the third case brought by U.K. authorities involving overseas bribery by U.K. companies. In September 2008, the Overseas Anti-Corruption Unit of the City of London Police said an employee of CBRN Team Ltd, a U.K. security consulting firm, and an official of Uganda, had pleaded guilty to bribery charges. The CBRN employee received a suspended sentence and the Ugandan official was sentenced to twelve months in jail. And in October last year, the U.K.'s Serious Fraud Office reached a £2.25 million civil settlement with construction firm Balfour Beatty plc for alleged unlawful accounting in connection with overseas "payment irregularities" which it self-reported.

Apparently to emphasize the new willingness of her agency and other U.K. authorities to prosecute overseas bribery, Margaret Cole, the FSA's director of enforcement, said:

The involvement of UK financial institutions in corrupt or potentially corrupt practices overseas undermines the integrity of the UK financial services sector. The FSA has an important role to play in the steps being taken by the UK to combat overseas bribery and corruption. We have worked closely with other law enforcement agencies in this case and will continue to take robust action focused on firms’ systems and controls in this area.
According to its website, the Financial Services Authority is an independent non-governmental body with statutory powers under the Financial Services and Markets Act 2000. It has a range of rule-making, investigatory and enforcement powers intended to "promote efficient, orderly and fair financial markets and help retail financial service consumers get a fair deal." The Treasury appoints its 12-member board.

Between January 2005 and September 2007, according to the FSA, Aon Ltd didn't properly assess or control the risks involved in its dealings with overseas firms and individuals who helped it win business. "As a result of Aon Ltd’s weak control environment, the firm made various suspicious payments, amounting to approximately US$7 million, to a number of overseas firms and individuals." The payments were made in Bahrain, Bangladesh, Bulgaria, Burma, Indonesia and Vietnam.

The FSA said Aon cooperated fully and agreed to settle early in the investigation, qualifying for a 30% discount under the FSA’s settlement discount scheme. Without the discount the fine would have been £7.5 million.

View the FSA's January 8, 2009 release here.

Download the FSA's Final Notice (January 6, 2009) here.

View Aon's January 8, 2009 statement here.


The FCPA, With All The Fixins . . .

U.S. v. Kozeny. Bloomberg's David Glovin continues his great coverage of Frederic Bourke's prosecution under the Foreign Corrupt Practices Act. His latest story says the government's witnesses will include a former U.S. Defense Department analyst, Christine Rastas, who worked for an investment bank run by co-defendant Victor Kozeny, and John Pulley, an ex-agent with the Drug Enforcement Administration who was Kozeny's security chief. Testifying with immunity, Rastas and Pulley are among at least "six people [who] have now said they were aware of wrongdoing in the deal" to privatize Azerbaijan's state oil company, reports Glovin.

Blasts from the past. A story yesterday by Lynne Marek of The National Law Journal (carried in here) mentions the potential resolution of a couple of FCPA investigations that have been pending for years -- Halliburton (from 2003) and DaimlerChrysler (from 2004). "Halliburton," the story says, "disclosed in 2003 that regulators were probing $2.4 million in payments by one of its subsidiaries for favorable tax treatment in Nigeria. The DaimlerChrysler probe was triggered when a former employee alleged in a now-settled 2004 whistleblower lawsuit that the company had secret bank accounts for bribing foreign officials."

No telephones, please. We're Bulgarian. About our post yesterday, Thomas in Tokyo believes the cell phone ban is meant to prevent the store's disarmed patrons from calling for help. Others have speculated it's somehow related to electronic surveillance or, as one imaginative reader put it, to keep detonating devices off the premises. We're still scratching our head.

Real heroes. A special salute to the men and women in uniform everywhere who serve their countries and communities, and to their loved ones.

We're thankful for . . . These words spoken by Robert F. Kennedy in March 1968: Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.

Happy Thanksgiving.