U.S. DOJ Declines to Prosecute Boston Consulting Group After It Admits to Paying Bribes in Angola – Practitioner Takeaways
Last week, Boston Consulting Group (BGC) announced that the U.S. Department of Justice (DOJ) declined to prosecute the firm despite paying bribes to win deals in Angola. BCG, which self-reported the payments, will disgorge $14.4 million in profits it received through the corrupt contracts.
The declination reflects the DOJ’s efforts to encourage companies to come forward if they discover potential misconduct.
BCG, through its Lisbon office, paid roughly $4.3 million in commissions to an agent to secure business with Angolan government agencies. The firm knew that this agent had close connections with government officials and members of the ruling party in Angola but agreed to pay between 20% and 35% of the value of any government contracts obtained, with the payments being routed through three different offshore entities. The payments were made between 2011 and 2017.
For risk and compliance teams, the declination offers several insights:
BCG would probably have seen a considerably worse outcome had it not come forward after discovering potential wrongdoing, as news reports later implicated BCG in questionable deals relating to Angola’s state-owned oil company, as well as a jewelry company owned by the former president’s daughter, Isabel dos Santos. Corporate wrongdoers are not eligible for declinations if the potential misconduct is already in the news. (Note, though, that the DOJ declination letter does not specify whether these were the specific deals that were corruptly won.)
When BCG chose to self-disclose, it did so under a less generous DOJ policy that did not grant declinations as easily. Since then, in 2023, the DOJ listed the criteria for a presumption of a declination: voluntary self-disclosure, full cooperation, and timely and appropriate remediation. In granting the declination, the DOJ cited factors from the 2023 policy to support its decision, even though it would not have been in effect when BCG turned itself in.
In order to quality for the presumption, a company’s executive management cannot have been involved in the misconduct. Yet there were equity partners in BCG’s Portugal office that were “implicated” in the activity, suggesting that they are not considered “executive management.” This may be because they manage a local office, and not the global enterprise. (Alternatively, there may be an unexplained distinction between being “involved in” and being “implicated” in misconduct.)
While details of BCG’s control failures are scant, the company appears to have taken a very aggressive approach to risk. While the egregiousness of a violation does not necessarily preclude a declination, it does mean that a company must take significant remedial steps to enhance its compliance program and oversight.
TRACE members may learn more about self-disclosure in the Voluntary Disclosure Under the Foreign Corrupt Practices Act white paper.
FCPA Compliance Consultant