This previous post highlighted the recent $14.4 million Foreign Corrupt Practices Act enforcement actions against Boston Consulting Group (BCG) concerning conduct in Angola.
This post highlights additional issues to consider.
Voluntary Disclosure
The DOJ’s “declination with disgorgement” letter mentions “BCG’s timely and voluntary self-disclosure of the misconduct, which occurred after BCG uncovered evidence, in the form of a 2014 email, of a potential FCPA violation.”
It is unclear when BCG “uncovered” this evidence or when the purported voluntary disclosure was made to the DOJ.
What is clear is that since at least 2020 there has been several media articles about BCG (as well as other consulting firms such as PwC and McKinsey) questioning its business dealings in Angola. (See here, here, here and here).
The DOJ’s Corporate Enforcement and Voluntary Self Disclosure Policy defines voluntary disclosure to include, among other things, as occurring “prior to an imminent threat of disclosure or government investigation.”
Embarrassing
It is likely embarrassing for any company to resolve an FCPA enforcement action.
But when the company resolving the action is a consulting company that has corporate compliance and risk management offerings (see here) as well as a company that it is a sponsor of FCPA’s Inc. largest dog and pony show – well that is sort of embarrassing.
Statute of Limitations
According to the DOJ, “the Government’s investigation found evidence that from in or about 2011 until in or about 2017, BCG, through its Lisbon, Portugal office, paid its agent in Angola the equivalent of approximately $4.3 million in commissions to help BCG obtain business with agencies of the Angolan Government …”.
In other words, the alleged improper conduct took place 7-13 years prior to the enforcement action.
The statute of limitations for an FCPA anti-bribery violation is five years.
However, statute of limitations (like other legal issues) often matter very little in FCPA matters given that companies “cooperate” in the DOJ’s investigation. Part of cooperation is often waiving statute of limitation defenses or agreeing to toll the statute of limitations.
More Detail Please
The DOJ’s “declination with disgorgement” letter states:
“BCG’s timely and appropriate remediation, including termination of the personnel involved in the misconduct with compensation-based penalties, including requiring implicated BCG partners in Portugal to give up their equity in the Company, denying access to financial transition normally accorded to BCG employees leaving the firm, and withholding bonuses.”
It would have been nice for the DOJ to describe in more detail the dollar amounts associated with these issues.
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