By understanding the behaviour that drove these fines and settlements, hopefully, you can avoid the same fate!
Key bribery fines & settlements in 2022
- Glencore - $1bn settlement
- FirstEnergy - $180m settlement
- Tenaris - $78m settlement
- Stericycle - $84m settlement
- K.T. Corporation - $6.3m settlement
- Boulting Group - £500k fine
- Tritec and Electron - £70k fine each
Whilst companies face multi-million settlement penalties, the consequences for individuals can include jail time.
Biggest bribery fines in 2022 in detail
1. Glencore - $1bn settlement
The Serious Fraud Office (SFO) has found Glencore Energy (UK) Ltd guilty of all seven counts of bribery brought against it. The business pleaded guilty to several counts of bribery to gain access to oil and make illegal gains.
The SFO's investigation revealed that Glencore paid over $28m (£22.2m) in bribes through its employees and agents in exchange for preferential access to oil, including larger cargoes, more valuable oil grades, and preferred delivery dates.
The firm gave the go-ahead for these activities across its oil operations in South Sudan, Equatorial Guinea, Nigeria, Cameroon, and the Ivory Coast. Glencore's sentencing is scheduled for November 2nd and 3rd of this year. The company expects to pay around $1bn to settle the bribery allegations.
2. FirstEnergy - $180m settlement
FirstEngergy's senior management orchestrated a $63m bribery scheme which says the exchange of payment to a top legislative leader and regulator for official action. CEO Charles "Chuck" Jones and Senior Vice President Michael Dowling were fired after initial FBI arrests.
Shareholders in the company filed a derivative lawsuit against the company, which claimed that the bribery action and subsequent legal and political fallout damaged the company and violated its policy.
FirstEnergy agreed to settle. The settlement included the company's agreement to adopt certain corporate governance reforms and the payment of $180m. This amount is to be funded by D&O insurance.
3. Tenaris - $78m settlement
The Securities and Exchange Commission (SEC) announced that Tenaris would pay over $78m to settle violation charges of the Foreign Corrupt Practices Act (FCPA) concerning a bribery scheme. The global manufacturer and supplier of steel pipe products were involved in a bribe scheme concerning its Brazilian subsidiary.
This scheme allegedly aimed to obtain and retain business from Petrobras, a Brazilian state-owned entity. Approximately $10m in bribes were paid to the Brazillian government. Tenaris has consented to the SEC's order without admitting or denying the findings. They agreed to pay more than $78m in combined disgorgement, prejudgment interest, and civil penalties.
4. Stericycle - $84m settlement
The medical waste management company, Stericycle, will pay over $84m to settle parallel civil and criminal charges relating to bribery schemes in Argentina, Brazil and Mexico. The company violated the FCPA when it paid millions to obtain and retain government customers in these countries between 2012 and 2016.
Furthermore, Stericycle failed to have sufficient internal accounting controls to detect and prevent misconduct. The company agreed to the cease-and-desist order that it violated anti-bribery, books and records, and internal accounting controls provisions of the FCPA.
5. K.T. Corporation - $6.3m settlement
South Korea's largest telecommunications company, K.T. Corporation, has agreed to pay over $6.3m to settle FCPA charges. The SEC's order shows that the company engaged in multiple schemes to make improper payments to Korea and Vietnam.
For nearly a decade, K.T. Corp lacked sufficient internal accounting controls that allowed employees, including executives, to generate funds for gifts and illegal political contributions to government officials. The company consented to the SEC's order without accepting or denying the charges.
They agreed to pay approximately $3.5 million in civil penalties and $2.8 million in disgorgement.
6. Boulting Group - £500k fine
Former Coca-Cola enterprise manager provided several companies with confidential and sensitive information, giving them an advantage over rivals in contract bids. One of these companies was Boulting Group, now named WABGS Ltd.
Boulting was fined £500k for failing to prevent briber,y while the other two companies received a fine of £70k each. Noel Corry received £950k from Boulting, which benefited by £13m. Boulting admitted to failure to prevent bribery.
7. Tritec and Electron - £70k fine each
Tritec Systems and Electron Systems are the other two companies involved in the bribery scheme orchestrated by Noel Corry. Both of these companies paid over £600k in bribes to Corry. Tritec and Electron were accused of failing to prevent bribery. They admitted to this failure as well as corruption and were each fined £70k.
Key takeaways for companies
- Never give or offer any inducement, nor request or accept one from others - remember that bribery is a criminal offence and a predicate offence to money laundering.
- Ensure that any gift or hospitality you give or accept is proportionate and in line with industry-standard policies and thresholds.
- Conduct due diligence on all third parties and make your company's stance on bribery clear - lookout for any bribery red flags.
- Never attempt to disguise a bribe as something legitimate, for instance, as a 'scholarship' or 'loan repayment'.
- Report any knowledge or suspicion of active bribery via your company's whistleblowing channels.
Biggest individual bribery prosecutions in 2022
- Noel Corry - 20-month imprisonment / £1.7m repayment
- Peter Kinsella - 12-month imprisonment
- Gary Haines - 20-month imprisonment
The consequences for individuals guilty of bribery and corruption are severe, with penalties that could include time in prison.
1. Noel Corry - 20-month imprisonment
Noel Corry is the former Coco-Cola Enterprises manager responsible for providing Boulting Group, Tritec Systems, and Electron Systems with confidential information that gave them an advantage over rivals in contract bids.
Corry was ordered to pay Coco-Cola Enterprises Ltd. £1.7m when his nine-year scam was discovered. To do this, he needed to sell his family home and empty his pension pot. Corry admitted to five counts of corruption and was sentenced to 20 months in prison, a 21-month suspension and 200 hours of unpaid work.
2. Peter Kinsella - 12-month imprisonment
Peter Kinsella is a former contract manager at Boulting Group who was involved in Corry's bribery scheme. He admitted to three counts of corruption and three counts of conspiracy to bribe. Kinsella was sentenced to a 12-month suspended prison term and 200 hours of unpaid work.
3. Gary Haines - 20-month imprisonment
Gary Haines is the former director of Tritec Systems and Electron Systems and another participant in Corry's bribery scheme. He pleaded guilty to two counts of corruption. Haines was sentenced to a 20-month suspended prison term and 200 hours of unpaid work.
Key takeaways for individuals
- Ensure that you conduct adequate due diligence on all third parties and make our stance on bribery clear to them.
- Have a suitable Gifts and Entertainment Policy in place so that everyone is clear on what is and is not acceptable.
- Never make facilitation payments - they're just bribery by another name.
- Remember that bribery is a crime resulting in hefty fines or a stretch in jail!
Want to learn more about Bribery & Corruption?
To help you plan and execute compliance in your organisation, we have created a comprehensive Bribery & Corruption roadmap.
We also have 80+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, posters, training presentations and even e-learning modules!
If you'd like to stay up to date with Bribery & Corruption best practices, industry insights and key trends across regulatory compliance, digital learning, EdTech and RegTech news, subscribe to the Skillcast FCA Compliance Bulletin.
Last but not least, you can interact in person with thought leaders and your peers at one of our popular live webinars and face-to-face events.
If you've any questions or concerns about compliance or e-learning, please get in touch.
We're happy to help!