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The FCPA Files Series

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The FCPA Files

Below is a list of all the current posts in our "The FCPA Files" series, complete with direct links for easy access. We hope you find this series both informative and engaging!



Legal Cases

The Foreign Corrupt Practices Act (FCPA), first enacted in 1977, prohibits U.S. firms and individuals from paying bribes to foreign officials to further business deals. The FCPA’s enforcement history provides valuable insights to compliance professionals. These cases serve as helpful legal precedents, highlighting organizational vulnerabilities and reflecting changing global economic and political conditions.






Katy Industries, Inc.

As one of the earliest FCPA enforcement actions, the Katy Industries case helped to establish a pattern for how future FCPA cases would be resolved. The CEO of Katy Industries bribed high level Indonesian government officials in order to obtain an oil production sharing contract, and was consequently issued a fine, a permanent injunction, and ordered to pay restitution. This case highlighted the importance of third party due diligence, accurate record-keeping, and thorough risk assessment in high-risk industries and regions.  





Airplane

In this case, Page Airways bribed foreign officials in Africa, the Middle East, and Southeast Asia in order to facilitate aircraft sales of their luxury business jets. This case highlights the close relationship between aviation sales and national security concerns, demonstrating how the involvement of intelligence agencies in such cases can complicate the enforcement of anti-corruption laws. 






Oil rig

The Carver-Holley case in Qatar highlights the complexities and risks of international oil deals in the 1970s. Roy Carver and Eugene Holley paid bribes to the Oil Minister of Qatar to secure oil exploration rights in Qatar; however, the oil wells turned out to be unusable. This case highlights the need for thorough due diligence on business opportunities, verification of information provided by business partners and intermediaries, and careful documentation and justification of all payments to foreign officials and third parties.






International Systems and Controls Corporation

In the 1970s, International Systems & Controls Corp. (ISC) engaged in systematic financial misconduct in multiple countries, including bribing officials in Saudi Arabia and Iran, improperly recording bribes as reimbursable expenses, and attempting to conceal their corrupt practices during a subsequent internal investigation. This case exemplifies the precise type of misconduct the FCPA was designed to prevent, highlighting the need for robust internal controls and transparent financial reporting in international business operations.








Postcards

The Finbar B. Kenny case resulted in the first FCPA conviction in 1979. Finbar B. Kenny, President of Kenny International Corporation, improperly diverted postage stamp revenue from his company to fund a voter fraud scheme in the Cook Islands. This case highlights the importance of robust internal controls and due diligence for companies engaging in international business in high-risk jurisdictions. 






Tesoro

The O’Halloran-Tesoro case marked the first time a small developing country successfully sued a U.S. company for bribery and was able to recover funds. John O’Halloran, a powerful political figure in Trinidad and Tobago, accepted bribes from Tesoro Petroleum, amongst other companies, in exchange for oil concessions. This case underscores the long-term consequences of corruption in resource-rich developing nations and the importance of transparent governance in natural resource management.







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