Richard L. Cassin Publisher and Editor
Andy Spalding Senior Editor
Jessica Tillipman Senior Editor
Elizabeth K. Spahn Contributing Editor
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Benjamin Kessler Contributing Editor
Michael Kuria Contributing Editor
Thomas Fox Contributing Editor
Philip Fitzgerald Contributing Editor
Marc Alain Bohn Contributing Editor
Michael Scher Contributing Editor
Bill Waite Contributing Editor
Shruti J. Shah Contributing Editor
Dr. Henry Wong Contributing Editor
Russell A. Stamets Contributing Editor
Mark R. Friedman Contributing Editor
Andrew Reichardt Editorial Intern
Andy Spalding | Tuesday, April 16, 2013 at 2:28AM 
The Siemens enforcement action is a powerful example of what FCPA enforcement is today . . . and what it is not.
Richard L. Cassin | Wednesday, March 20, 2013 at 7:02AM 
Emblem of the Israeli police (image courtesy of Wikipedia)Israel arrested a former judge and state electric company executive who allegedly took bribes from Siemens in exchange for huge contracts to supply gas turbines.
Richard L. Cassin | Tuesday, August 7, 2012 at 7:08AM Israel's Teva Pharmaceutical Industries Limited said last week it was subpoenaed by the SEC because of potential FCPA compliance problems in Latin America.
Richard L. Cassin | Tuesday, July 10, 2012 at 10:28AM Former Israeli Prime Minister Ehud Olmert was cleared yesterday by a Jerusalem court of accepting bribes from a Morris Talansky, an American businessman.
Richard L. Cassin | Wednesday, April 13, 2011 at 7:21AM Does foreign aid cause corruption? It does, mainly by helping corrupt regimes stay in power. And because corrupt regimes are the most unstable, aid also fuels civil unrest.
Richard L. Cassin | Thursday, April 7, 2011 at 2:07PM New York-based Comverse Technology Inc. today settled Foreign Corrupt Practices Act violations with the DOJ and SEC for $2.8 million.
Richard L. Cassin | Sunday, October 4, 2009 at 9:05PM
Corruption, of all things, may be the deciding factor in Washington's debate about troop deployment and military strategy in Afghanistan. The Christian Science Monitor said last week: "The concern is that the Afghan government has become so rotted with corruption that it cannot consolidate the gains the U.S. military makes. In other words, the U.S. will never be able to leave Afghanistan unless there’s at least a minimally effective government to help in the near term and then take over in the future."
The 77,000-member Afghan police force illustrates the problem. Writing in this month's Atlantic (here), Anup Kaphle said:
Talk with any taxi driver or farmer in Lashkar Gah, and you’ll hear stories about police shakedowns. One farmer from the nearby town of Gereshk, who was transporting his wheat harvest to Lashkar Gah, said that a police officer had taken 1,000 Afghanis ($20) from him the previous week. “They will search your pockets and take money and valuables from you,” he said, “and you can’t say anything because you know you will have to deal with them again the next day.”
Echoing Kaphle's reporting, the Christian Science Monitor said:
Law and order in the country has collapsed as many police use their posts primarily as a platform for bribe-taking. Even before the election, President Karzai had lost broad public support in Afghanistan because of his government’s inability – or unwillingness – to stifle corruption. Indeed, it is corruption, not insecurity, that most angers Afghans.
Kaphle cites low pay as a cause of police corruption. He says their monthly wages are about $110. That's a lot higher than the average Afghan income of $25. But it's also "nearly two and a half times less than that earned by the Afghan National Army."
Those looking at countries like Afghanistan often assume low pay equals more local graft. Conversely, people living, for example, in Hong Kong, Singapore and Israel, credit high civil-service pay with reducing corruption. It's simple, they say: government employees won't risk their cushy jobs and pensions by taking bribes.
Oddly, however, there's no consistent data linking low wages with increased corruption. Researchers have been frustrated for years by what one called "puzzling empirical evidence on the relationship between corruption and bureaucratic wages." That is, in countries with high corruption rates, paying bureaucrats more doesn't always reduce corruption. That means other factors must be at work -- tribal or ethnic alliances and rivalries, education, civil rights, press freedom, relationships between local and national leaders, and so on. But no one has found a dependable way to measure those ingredients or quantify how they influence corruption.
That knowledge gap can be a problem for policy-makers. G. Pascal Zachary, author of the memoir Married to Africa, made that point this summer in the Wilson Quarterly (here). He said:
Are nations poor because their governments are corrupt, or does a nation’s poverty corrupt its officials? Traditional scholars of economic development hold that once a nation achieves a sufficient level of prosperity, corruption naturally withers as the incentives to cheat diminish. But in recent years, the continuing poverty in countries in Africa, Latin America, and the former Soviet bloc spurred revisions to that way of thinking . . . International donors, such as the World Bank, and activist groups, such as the corruption-monitoring organization Transparency International, promote the idea that if only governments in poor countries were honest, their citizens would be much wealthier.
But the debate, he said, suffers from "a paucity of data, especially case studies."
Richard L. Cassin | Monday, August 31, 2009 at 8:28PM 
Will the American businessman implicated in Israel's political corruption scandal be charged with violating the Foreign Corrupt Practices Act? Morris Talansky has said that over nearly a decade he gave Israel's former prime minister, Ehud Olmert (left), envelopes stuffed with cash that was used to fund political campaigns and pay for personal expenses. On Sunday, Olmert was indicted in Israel for fraud, breach of faith and deception. He had resigned last year because of the allegations.
One of the three cases against him, arising from the time he was mayor of Jerusalem and later a government minister, concerns the payments he received from Talansky.
The New York Times said,
The most sensational of the three cases involved Morris Talansky, a Long Island businessman, from whom Mr. Olmert is alleged to have received more than $600,000, partly in cash-stuffed envelopes, from 1997 to 2005. Prosecutors accuse Mr. Olmert of hiding the money and failing to report it to the authorities. Though Mr. Olmert has not been charged with taking bribes in the Talansky case, he is accused of abusing his position as a government minister to promote Mr. Talansky’s private business interests in Israel and abroad, constituting a major conflict of interest.Talansky, 76, testified against Olmert in a deposition in Israel in May 2008. According to the Times, he provided details about "how he had transferred huge sums of cash to Mr. Olmert. Mr. Talansky said that much of the money was for election campaigns, but that some was for Mr. Olmert’s personal use." The deposition forced Olmert to resign a few months later.
The payments appear likely to have violated the antibribery provisions of the Foreign Corrupt Practices Act (corruptly giving anything of value to a foreign official for the purpose of obtaining or retaining business). Will Talansky be indicted?
In January, New York magazine said Talansky could face FCPA charges. “FBI agents are flying all over the place,” the magazine reported. "And U.S. investigators are now using the testimony he gave in Israel as a road map to a possible prosecution." A federal grand jury sitting in New York City was also reportedly looking into possible tax and money-laundering offenses.
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Richard L. Cassin | Thursday, December 25, 2008 at 4:55PM 
One of ProPublica's outstanding investigative reporters, T. Christian Miller, wrote the story below (which ProPublica co-published with MSN Money). We reprint it under ProPublica's generous license ("You can republish our articles for free, if you credit us, link to us, and don't edit our material or sell it separately.")
If you have trouble accessing the DOJ and SEC charging documents linked in the story (we did), you can also find them at the bottom of our earlier post here.
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Help Us Name Names in Siemens Corruption Scandal
by T. Christian Miller, ProPublica - December 22, 2008 1:05 pm EST
Get ready for the Siemens World Corruption Tour, 2001-2008. Siemens pleaded guilty last week to corruption across the globe, receiving a record-setting fine -- $1.6 billion (which sounds like a lot, but really, it's just 0.3 percent of their revenue during those years.)
In announcing the fine, the Justice Department and the Securities and Exchange Commission released formal complaints detailing how Siemens bribed government officials all around the world. (We published a story in Sunday's New York Times profiling the Siemens accountant at the center of the scandal.)
However -- and this is a big "however" if you're into accountability -- they released none of the names of the corrupt bureaucrats that took the cash or the Siemens officials who paid it.
This was done, Justice folks said, to protect the integrity of ongoing investigations and to comply with privacy laws in various countries.
At the hearing prosecutors seemed a bit wistful that they couldn't reveal the names, which were provided to Judge Richard Leon in a sealed file. Lori Weinstein, the dogged prosecutor who pursued the case, said the department could not provide exact names. But, she said, the documents were sprinkled with clues to provide "sufficient clarity" for the court to figure out who was who.
Some identifications are vague -- there are plenty of "government officials." But others are more specific. (Hello, "Wife of the former Nigerian Vice President, a dual U.S.-Nigerian citizen.") ProPublica figures that with the help of readers, we might be able to ID at least some of these folks. Below, you'll find descriptions of the bribees. Send us a name and a link sourcing the information.
To get things started, take the case of the Argentine identity card contract. The SEC's complaint said that Siemens paid bribes to a certain "president of Argentina" who left office in 1999. Not too hard to figure out that one -- Carlos Menem ran the country from 1989 to 1999. Looks like the buck really did stop there.
This is by no means an exhaustive list. As of last count, 16 countries had investigations ongoing into Siemens. Our list below includes only those bribery schemes detailed in the formal complaints by the Justice Department and the Securities and Exchange Commission.
E-mail us if you find clues to figure out the other grafters.
Argentina
Source: SEC Complaint, p. 21
National Identity Card contract (1998-2004)
Contract Amount: $1 billion
Bribe Amount: $40 million
Recipients:
Bangladesh
Source: SEC Complaint, p. 19
Mobile Phone contract (2004-2006)
Contract Amount: $40.9 million
Bribe Amount: $5.3 million
Recipients:
Venezuela
Source: SEC Complaint, p. 14
Metro contracts (2001-2007)
Valencia and Maracaibo metro systems
Contract Amounts: $642 million
Bribe Amount: $16.7 million
Recipients:
Israel
Source: SEC Complaint, p. 17
Power plants (2002-2005)
Contract Amount: $786 million
Bribe Amount: $20 million
Recipients:
Nigeria
Source: SEC Complaint, p. 20
Telecommunications projects (2000-2001)
Contract Amount: $130 million
Bribe Amount: At least $4.5 million
Recipients:
Vietnam
Source: SEC Complaint, p. 22
Hospital equipment sales (2005-2006)
Contract Amount: $6 million
Bribe Amount: $383,000
Recipients:
Source: SEC Complaint, p. 27
Mobile network (2002)
Contract Amount: $35 million
Bribe Amount: $140,000
Note: Siemens did not win the project but agreed to pay 8 percent to 14 percent of project value to Vietnamese government officials
Recipients:
China
Source: SEC Complaint, p.16
Metro trains and signaling devices contracts (2002-2007)
Contract Amount: $1 billion
Bribe Amount: $22 million
Recipients:
Source: SEC Complaint, p. 18
High voltage lines (2002-2003)
Contract Amount: $838 million
Bribe Amount: $25 million
Recipients:
Source: SEC Complaint, p. 23
Medical equipment sales (2003-2007)
Contract Amount: $295 million
Bribe Amount: $14.4 million
Recipients:
Source: SEC Complaint, p.24
Hospital equipment sales (1998-2004)
Contract Amount: Unknown
Bribe Amount: $650,000
Recipients:
Russia
Source: SEC Complaint, p. 25
Traffic control system (2004-2006)
Contract Amount: $27 million
Bribe Amount: $741,419
Recipients:
Source: SEC Complaint, p. 27
Hospital equipment (2000-2007)
Contract Amount: Unknown
Bribe Amount: $55 million
Recipients:
Mexico
Source: SEC Complaint, p. 26
Refinery modernization (2004)
Contract Amount: Unknown
Bribe Amount: $2.6 million
Recipients:
Iraq
Source: SEC Complaint, p. 28
Oil for Food program (2000-2003)
Contract Amount: $124 million
Bribe Amount: $1.7 million
Recipients:
Will readers of the FCPA Blog contribute to this story? Let's see.
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A Siemens / Jefferson Link? Meanwhile, a story in the Dec. 24 edition of Harper's Magazine by Ken Silverstein refers to the earlier joint ProPublica/New York Times story about Siemens, and then says: "Now ProPublica has asked for help identifying some of the alleged recipients of the bribes who are described but not named in the SEC complaint. One of those people appears to be Jennifer Atiku-Abubakar, who is tied to the scandal involving the former Louisiana congressman William Jefferson and is also a donor to the Republican Party. But I want to emphasize that I have no way of knowing whether the charges made in the complaint about her are accurate. . . . According to this Washington Post story, she is the wife of Atiku Abubakar, the very controversial former vice president of Nigeria from 1999 to 2007."
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Richard L. Cassin | Monday, December 15, 2008 at 7:22PM As expected, Siemens AG pleaded guilty Monday to violating the internal controls and books and records provisions of the Foreign Corrupt Practices Act, reaching settlements with the U.S. Department of Justice and the Securities and Exchange Commission. Also on Monday, Siemens resolved charges by the Munich Public Prosecutor’s Office based on its corporate failure to supervise its officers and employees.
It will pay a criminal fine of $450 million in the DOJ settlement and $350 million in disgorgement of profits under its agreement with the SEC. In the German case, it will pay €395 million (about $569 million), on top of the €201 million it paid in October 2007 to settle a related action brought by the Munich Public Prosecutor.
In Monday's hearing in Washington, D.C. before U.S. District Judge Richard J. Leon, the German industrial giant pleaded guilty to one count each of violating the FCPA's internal controls and books and records provisions. Its Argentina subsidiary also pleaded guilty to conspiracy to violate the books and records provisions of the FCPA, and its Bangladesh and Venezuela subsidiaries pleaded guilty to conspiracy to violate the anti-bribery and books and records provisions.
The U.S. dispositions require appointment of a compliance monitor for four years. Siemens has already named Theo Weigel, a lawyer who served in the German Parliament and as the country's finance minister.
In a sign that U.S. prosecutions of individuals tied to the case may follow, the DOJ said Siemens "also agreed to continue fully cooperating with the Department in ongoing investigations of corrupt payments by company employees and agents."
At a press conference after Monday's hearing, Matthew Friedrich, the Acting Assistant Attorney General at the DOJ's Criminal Division, said the Justice Department "in recent years significantly increased its FCPA enforcement. From 2001 to 2004, the Department resolved or charged 17 FCPA cases. For the period of 2005 to 2008, that number is 42 resolutions, representing an increase of more than 200 percent within these four years as compared to the prior four-year period."
What's potentially even more significant, he said, is that fighting public corruption has gone global:
Through international instruments like the OECD convention and the U.N. convention against corruption, we have seen our international partners significantly step up their anti-corruption efforts. Everything we're seeing suggests that this trend will continue. South Africa, for example, became the 37th country and the first African nation to become a party to the OECD convention in 2007. Israel followed suit in September of this year, becoming the 38th signatory.And on the nature of graft and why the fight against it is important, he said:
For let there be no doubt that corruption is not a victimless offense. Corruption is not a gentlemen's agreement where no one gets hurt. People do get hurt. And the people who are hurt the worst are often residents of the poorest countries on the face of the earth, especially where it occurs in the context of government infrastructure projects, contracts in which crucial development decisions are made, in which a country will live by those decisions for good or for bad for years down the road, and where those decisions are made using precious and scarce national resources._____________
View a copy of the DOJ's Dec. 15, 2008 release here.
Download a copy of the DOJ's Dec. 15, 2008 plea offer here.
View a transcript of the DOJ's Dec. 15, 2008 press conference here.
Download the DOJ's charging documents, sentencing memo and joint statement at the bottom of our prior post here.
View the SEC's Litigation Release No. 20829 (December 15, 2008) and Accounting and Auditing Enforcement Release No. 2911 (December 15, 2008) in Securities and Exchange Commission v. Siemens Aktiengesellschaft, Civil Action No. 08 CV 02167 (D.D.C.) here.
Download the SEC's complaint against Siemens here.
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