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The Friday Blotter

Eric Stenberg from PWC's Investigations & Forensic Services in Alberta, Canada offered some practical advice in response to Hired Guns And The FCPA:

Dear FCPA Blog,

As a former security consultant to a Canadian drilling company in Nigeria, I can tell you there is only one way for foreign companies to effectively gain protection. That is by the use of private security contractors combined with the use of privately paid national police officers. Only the Nigerian Police Force and the Military are allowed to have firearms for the execution deadly force protection. That is the law. Foreigners and private security would be prosecuted if found in the possession of a firearm.

Violence and kidnapping occurs throughout Nigeria without warning. The behavior of the police and the military requires accountability to their superiors. Should there be a national emergency those privately contracted national police officers can be called back for priority duty. It is an odd arrangement, but one that seems to work.

If the FCPA were to block American-based business from using the official existing security arrangements in a particular country, then they should not bother with doing business there. It is just too dangerous.

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U.S. Rep. William Jefferson (D-La.) lost an election for his Congressional seat on Saturday to Republican Anh "Joseph" Cao, who will become the first Vietnamese-American in Congress. Rep. Jefferson, 61, was indicted in June last year by a federal grand jury for violating the antibribery provisions of the Foreign Corrupt Practices Act. He's also charged with soliciting and accepting bribes, wire fraud, money laundering and obstruction of justice. He faces a maximum of 235 years in prison if convicted on all 16 counts. His trial in Alexandria, Virginia is scheduled to start early next year.

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Another politician in serious trouble for alleged corruption is Illinois Governor Rod R. Blagojevich. He was arrested Tuesday on federal charges for trying to sell President-elect Barack Obama's senate seat.

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So which state is more corrupt -- Louisiana or Illinois? According to the Corporate Crime Reporter's 2007 survey, it's Louisiana. Illinois ranked 6th worst but may move higher if Gov. Blagojevich is convicted. The ten most corrupt states, by the way, are Louisiana (1), Mississippi (2), Kentucky (3), Alabama (4) Ohio (5) Illinois (6), Pennsylvania (7), Florida (8), New Jersey (9) and New York (10). The survey covered the 35 most populous states, so the fifteen states with under two million people weren't included. The least corrupt states in the survey were Utah (31), Kansas (32), Minnesota (33), Iowa (34) and Oregon (35).

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Strange arbitrage? According to Border's in-store book locator, Bribery Abroad is out of print. Not true. It's available from Amazon here for under $20 and can be downloaded here for about half that. Strangely, the Border's computer system offered a used copy at $69.26. The blurb said its condition is "Fine -- Carefully handled. Has no marks or blemishes on text, binding, or dust jacket. Almost new, but lacking new book crispness." Our advice: Buy new and save a bundle.

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Dependable sources told us earlier this week to expect some blockbuster FCPA enforcement news. And stories out today say Siemens is close to settling with the SEC. The Associated Press quotes a Siemens supervisory board member as saying, "We're hoping on an agreement with the SEC before Christmas. If necessary, we'll meet December 23rd."

But Siemens also had some bad news this week. European Union antitrust regulators charged it with forming a price-fixing cartel among makers of power transformers. A separate AP report said Siemens, France's Areva and Swiss engineering group ABB confirmed they had received the EU charges. Public and private corruption sometimes accompany cartel activity, as illustrated by recent cases involving the makers of marine hose and orthopedic devices.

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We'll be wheels up for a few days. Enjoy the weekend.

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Full post as published by The FCPA Blog on December 11, 2008 (boomark / email).