By understanding the behaviour that drove these fines and settlements, hopefully, you can avoid the same fate!
Key bribery fines & settlements in 2023
- Glencore - $700m fine & forfeiture
- Televisa - $95m settlement
- Recidivist Philips - £62m fine
- Frank's International - $8m settlement
- Gartner - $2.5m settlement
Whilst companies face multi-million settlement penalties, the consequences for individuals can include jail time.
We track these settlements continuously; find out more in our posts about the biggest bribery fines of 2020, 2021 and bribery fines from 2022.
Biggest bribery fines in 2023 in detail
1. Glencore - $700m fine & forfeiture
Glencore plc has been ordered to pay $700m after it pleaded guilty to its decade-long scheme of bribing foreign officials across several countries. This sentence consists of a $428.5 million fine and $272 million in forfeiture, in line with a plea deal reached by Glencore and federal prosecutors.
The fine amount is 15% less than US guideline recommendations, which indicates Glencore's cooperation. Upon investigation, it was found that Glencore had paid over $100 million in bribes to officials in various countries to avoid audits or win business.
This is not the first time the commodities trader has been in hot water. Last year, Glencore had to pay a fine of $341 million and $144 million in forfeiture after pleading guilty to a charge of market manipulation.
2. Recidivist Philips - £62m fine
Dutch-based medical device company Koninklijke Philips has agreed to pay $62m over alleged bribery in China.
According to the SEC, for five years, Philips’ representatives “engaged in improper conduct to influence foreign officials in connection with tender specifications in certain public tenders to increase the likelihood that Philips’ products were selected”.
Philips' subsidiaries also engaged in “improper bidding practices” with state-owned hospitals. For example, they tailored the technical specifications in the tender to match Philips’ products. In addition, Philips prepared its own bids, as well as fake bids describing other companies’ products, to “give the appearance of legitimacy” and satisfy China’s three-bid criteria.
Philips’ subsidiaries also used “special price discounts” with distributors of its medical diagnostic imaging equipment in China, which were then used “to fund improper payments to employees of government-owned hospitals”.
In Hainan Province, a sales manager reportedly took $14,500 in local currency to the home of the director of a hospital’s radiology department and subsequently won sales for two devices worth $4.6 million.
It is Philips' second FCPA action in ten years. In 2013, the company paid $4.5 million for records and controls offences relating to similar practices in Poland.
3. Televisa - $95m settlement
Mexican broadcaster Televisa has reached a $95m settlement to resolve a lawsuit by a US investor. The company was accused of bribing FIFA soccer officials to win the rights to broadcast four World Cup tournaments.
Investors claimed to have suffered losses when the bribery was uncovered, and Televisa's ADR price fell. Televisa still denies any wrongdoing in their settlement.
4. Frank's International - $8m settlement
The Dutch oil services company, Frank's International has agreed to settle a long-running investigation into bribery violations by paying $8m. The alleged misconduct by the company's operations in Angola took place between January 2008 and October 2014, according to the Securities and Exchange Commission ( SEC) of the US.
The investigation has found that the company paid a sales agent commissions knowing that they would be likely to use these funds to bribe Angolan government officials. Some of these funds were also siphoned off to an employee of Angola’s state oil and gas company, Sonangol, in order to influence the acquisition of oil and natural gas service contracts.
5. Gartner - $2.5m settlement
Technological research and consulting firm, Gartner, will pay a $1.6m penalty and disgorgement and prejudgment interest of around $857k for violating the FCPA's anti-bribery, books and records, and internal accounting controls provisions.
The SEC revealed that the company entered into a corrupt agreement with a private South African company that had a close connection with South African government officials. They did this with the knowledge or conscious disregard that the funds paid to the private company would be used to bribe government officials to influence the award of consulting contracts to Gartner.
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 2023
- John Raphael - 6-month imprisonment
- Graeme Hossie, Rachel Rhodes & Ariel Armon - sentence pending
- Frank Partridge - sentence pending
The consequences for individuals guilty of bribery and corruption are severe, with penalties that could include time in prison.
1. John Raphael - 6-month imprisonment
John Raphael has been convicted twice and will now serve 6 months in prison for a food service bribery scheme that began about a decade ago. Originally, Raphael was sentenced to house arrest and no prison time. The U.S. Attorney's Office for the Southern District of Ohio appealed the judge's decision which resulted in the resentencing.
Despite six months of jail time being greater than none, this sentence is still less than the recommended 41 to 51 months under federal sentencing guidelines. Raphael was a board member of the Franklin County Facilities Authority that oversees the convention centre and Nationwide Arena.
Raphael secretly took on a national food vendor, Centerplate, as a lobbying client in 2013 for $5,000 a month. The investigation found that his aim was to help Centerplate land public food service contracts in Columbus. There was a $40,000 "success fee" should it get the convention centre's exclusive food contract.
In total, Raphael collected $144,000.
2. Graeme Hossie, Rachel Rhodes & Ariel Armon - sentence pending
The Serious Fraud Office (SFO) has charged London Mining plc's former Chief Executive Officer(CEO) and Chief Financial Officer (CFO) with bribery. Former CEO, Graeme Hossie, CFO Rachel Rhodes and international business consultant Ariel Armon were charged with conspiring to make multiple corrupt payments which would secure preferential treatment in Sierra Leone.
The SFO initiated an extensive investigation after the company collapsed in 2016. As part of this investigation, many arrests and multiple searches were carried out. The sentencing will take place in July 2023.
3. Frank Partridge - sentence pending
Former Metropolitan officer, Frank Partridge, was found guilty of four counts of bribery. While working in the Westminster licensing unit between 2013 and 2015, he accepted bribes that included a £7000 luxury family holiday in Morocco, home renovations, tickets to exclusive events and a bespoke monogrammed £1,350 suit.
He formed close relationships with people linked to the West End nightlife instead of policing them - these relationships benefited him financially as well as those who had "someone with Frank Partridge's powers in their pocket". Partridge will be sentenced in July 2023.
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 anti-bribery compliance?
We have created a comprehensive bribery & corruption roadmap to help you navigate the compliance landscape, supported by several financial crime prevention courses in our Compliance Essentials Library.
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