After analyzing almost 400 cases over 13 years, the World Bank reports that only 3.3 percent of $6 billion in fines have been shared with developing countries whose officials accepted bribes.
Governments and businesses in western nations know that corruption in developing countries undermines the fiscal soundness of the entire region by enriching those that circumvent the law and keeping reputable businesses from wanting to do business in the region. We have had several discussions about this topic on the FCPA Blog, quoting leaders who have underlined these sentiments.
So how could western regulators not pass along the monies collected from out-of-court settlements to those developing economies?
In its report released on Wednesday, the Stolen Asset Recovery Initiative (StAR) of the World Bank and the United Nations Office of Drugs & Crime describes how those countries affected by the bribes accepted by their government officials have been left out of the equation. “In the majority of settlements, the countries whose officials were allegedly bribed have not been involved in the settlements and have not found any other means to obtain redress.”
One example offered in the report is construction company firm Mabey & Johnson Ltd., which was caught paying bribes to Iraqi officials in Ghana and Jamaica. In 2009, Mabey & Johnson entered into a plea bargain with the Serious Fraud Office and was ordered to pay £658,000 to Ghana and £139,000 to Jamaica and £618,000 to Iraq. Payments were made to Iraq and Jamaica, but no transfer of funds have been sent to Ghana.
Most foreign bribery cases are decided using settlements conducted by and in the countries in which the bribers are located, leaving the countries where the bribes were accepted little means of information to pursue their own redress opportunities. There is an open-ended question as to whether many of these settlements feature sanctions that are high enough to serve as a deterrent, and the absence of any voice from the victims of the bribery conduct, including countries and victims.
The World Bank plans to present the report in Panama this week as 1,500 delegates of the UN Convention Against Corruption meet. The hope is that its membership will agree that developing nations should be parties to these prosecutions going forward and larger recipients of money obtained from any judgments.
Julie DiMauro is the executive editor of FCPA Blog. She can be reached here.