Deals let companies avoid prosecution
NEW YORK (Reuters) — Anti-bribery groups are raising concerns about governments expanding the use of deals that let companies accused of crimes avoid prosecution if they promise to implement reforms and pay heavy fines, ahead of an OECD anti-bribery meeting in Paris on Wednesday.
Transparency International, the London-based Corruption Watch and other groups sent a letter to the secretary general of the Organisation for Economic Co-operation and Development questioning whether settlements actually deter corporate crime.
The groups said settlements should only be allowed when a company self-reports crimes and admits wrongdoing, and officials and employees involved in bribes should be named and prosecuted. The letter said there should be judicial oversight of the deals, which are often negotiated out of court, and monitoring of compliance programs should be made public.
U.S. prosecutors over the past decade have increasingly relied on settlements known as deferred prosecution agreements to resolve allegations of corporate wrongdoing ranging from foreign bribery to environmental violations.
In exchange for often large payouts and promises to improve internal compliance controls, companies can avoid criminal charges for a period of time. If the companies comply with the terms of the deal, the case is dismissed.
The corruption watchdog groups said they were concerned about other countries like Australia,Canada and Ireland looking to adopt corporate settlements similar to those used in the United States.
Britain's Serious Fraud Office entered into its first ever deferred prosecution agreement with ICBC Standard Bank Plc in November. The bank paid nearly US$37 million to resolve allegations it bribed officials in Tanzania.
British and U.S. prosecutors and regulators see the deals as useful tools to tackle corporate wrongdoing, given the cost and complexity of prosecuting large companies. Corporate defense attorneys say they can avoid costly trials for companies that might hurt shareholders or employees.
The OECD said it did not have a formal position on corporate settlements but would be taking stock of the various models.
"A common approach on this issue would certainly be a plus," said the OECD's Director for Legal Affairs Nicola Bonucci in a statement.
A U.S. judge recently ordered the release of a report by a corporate monitor after the British bank HSBC Holdings Plc was fined US$1.9 billion for allegations it failed to stop money laundering by drug cartels and terrorists.
The outside monitor was imposed as part of a deferred prosecution agreement. HSBC has fought the release of the report.