FCPA Compliance and Investigation Defense for the Construction Industry - Federal Lawyer
WSJ logo
Forbes logo
Fox News logo
Bloomberg logo
Los Angeles Times logo
The Epoch Times logo
Telemundo logo
NY Post logo
NBC logo
Daily Beast logo
USA Today logo
Miami Herald logo
CNBC logo
Dallas News logo

FCPA Compliance and Investigation Defense for the Construction Industry

Experienced FCPA Compliance and Defense Team

If you are being investigated for violations of the FCPA, it is time to take prompt action in your defense by retaining an experienced FCPA defense attorney.

Companies in the construction industry receive special attention by many federal authorities due to the ability to engage in bribes and corruption in construction projects—especially cross-border deals.

Agencies such as the Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) continue to increase their investigative tools and efforts against the construction industry for FCPA violations.

These agencies understand how lucrative construction jobs may be. The DOJ and SEC understand that big construction projects in emerging markets are a breeding ground for corruption and bribery.

An FCPA investigation could lead to severe civil and criminal penalties and jail time as well as disgorgement orders, injunctions, and permanent reputational harm.

Our FCPA Defense Team at Oberheiden, P.C. is composed of an experienced group of attorneys ready to represent you and your company against unwarranted, aggressive FCPA charges.

Do not wait to get in touch with a FCPA defense attorney right away. Put Oberheiden, P.C. on your side to prepare your defense and protect your reputation.

Put our highly experienced team on your side

Dr. Nick Oberheiden
Dr. Nick Oberheiden

Founder

Attorney-at-Law

John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

Local Counsel

Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

Local Counsel

Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

Local Counsel

Roger Bach
Roger Bach

Former Special Agent (OIG)

Michael Koslow
Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Overview of the FCPA

The Foreign Corrupt Practices Act (“FCPA”) contains two very important provisions:

  1. The antibribery provisions (15 U.S.C. §§ 78dd-1, 78dd-2, and 78dd-3), and
  2. The accounting and recordkeeping provisions (15 U.S.C. § 78m(b)).

Briefly, the FCPA prohibits bribing foreign officials to obtain or retain business and requires that companies maintain adequate books, records, and internal controls in their accounting practices.

The FCPA is a U.S. federal statute. While it primarily applies and intends to apply to U.S. persons and U.S. companies, its reach is in fact much more extensive.

Jurisdiction under the FCPA can reach all companies—including foreign companies—controlled by a U.S. parent corporation and all companies registered to carry out business in the United States. This means that a wholly foreign corporation can be liable under the FCPA for corrupt payments or bribery undertaken in the United States.

The DOJ is the primary federal authority enforcing the FCPA along with the SEC. Most investigations are initiated from whistleblowers who reveal various instances of bribery and corruption.

The FCPA includes some important defenses. For instance, it permits certain “facilitation payments” given to foreign officials to help them perform routine government actions. However, because this exception has great potential for abuse, it is heavily scrutinized by federal authorities.

The FCPA also permits payments in another country where those payments are lawful under the written laws of the foreign official’s country. However, this too is narrowly construed since agencies such as the DOJ draw a fine line between what they deem to be legal payments versus unlawful bribery.

Sanctions under FCPA are extensive and can include civil and criminal penalties, imprisonment, injunctions, disgorgement orders, debarments from federal programs, exclusion from ability to work with the government in the future, and the inability to receive export licenses.

Therefore, the need to secure a FCPA defense attorney as soon as possible is critical for the future of your business, construction projects, and overall reputation—both domestically and internationally.

FCPA Compliance Issues in the Construction Industry

FCPA issues in the construction industry are mainly associated with government contracts. This can cause serious concerns and risks for global construction companies.

For instance, big construction projects in foreign countries often involve multiple layers of contractors, subcontractors, and foreign consultants—each of which present new opportunities for corruption.

This risk is heightened in some countries where foreign officials expect payments of value in order for the construction company to receive a much-needed license or permit in order to continue doing business. In other words, bribery and corruption are viewed as normal parts of doing business in these countries.

Below is a brief list of the most common issues construction companies face when dealing with compliance under the FCPA:

  • Many global construction projects are undertaken in emerging markets, which oftentimes are foreign jurisdictions where bribery and corruption are rampant.
  • Corruption in the government is commonplace in certain emerging countries and may be an inherent part of any construction project in those countries. Therefore, companies obtaining government approval for licenses, permits, etc. may be asked for payments—bribes—by foreign officials in order to approve their requests.
  • The high prevalence of bribery in international construction contracts creates a culture where companies view such payments as acceptable and legal in order to complete the project, even though such payments run afoul of the FCPA.
  • Local firms or counsel in the foreign countries where the construction project is carried out may help the company conceal the bribery.

Therefore, it is hard to stay compliant with the FCPA where bribery and corruption are viewed as ordinary and common by foreign officials in the country where the construction project is undertaken.

For this reason, it is imperative to tread lightly and always receive the advice of an experienced FCPA attorney.

Examples of Bribery and Corruption in the Construction Industry

Instances of bribery and corruption in the construction industry can be found from the initial procurement stage to the final stages of the construction contract. Below are common examples:

  • Tendering bribes to government officials in a foreign country to secure a contract in that country.
  • Offering value to government officials to receive approval or permission for a license needed to begin construction.
  • Bribing foreign officials in order to receive a permit to continue the construction project.
  • Payments of value either directly or through procurement agents in order to secure a preferred supplier or subcontractor.
  • Payment of improper “facilitation payments” to receive imports of certain goods and materials from customs for the construction project.

In order to complete your construction contract, engaging in bribery can appear to be the only choice. It is important to remember that such actions could violate the FCPA and subject you to severe penalties and jail time.

Protecting yourself from such risks is the key to FCPA compliance.

How Can Construction Companies Guard Against Corruption and Bribery Risks?

Corruption and bribery, as mentioned, are common components of securing global construction contracts and carrying out the project over the long run. However, such conduct can lead to serious liability–fines and imprisonment–under the FCPA.

So how can construction companies guard against these corruption and bribery risks?

The best defense against corruption risks in global construction contracts is to establish a comprehensive compliance program within your company. A compliance program is designed to identify, prevent, correct, and monitor internal weaknesses in an entity’s business operations.

An effective compliance program cannot merely look good on paper. It must be effective in practice by both rooting out instances of fraud, corruption, and bribery and also remedying these issues as quickly as possible.

A robust compliance program must include the following elements:

  • Comprehensive code of conduct and code of ethics;
  • FCPA compliance training for all company personnel—including upper management, consultants, and lower-level employees;
  • Strong internal controls and accounting policies designed to detect irregular and suspicious payments and flag them for further review;
  • Required annual audits for the company’s internal operations and payment processes, especially those involving foreign countries and foreign parties;
  • Due diligence procedures conducted on all foreign consultants, local foreign counsel, agents, suppliers, and subcontractors as well as on transactions that pose a high risk to the construction company;
  • Regular and consistent risk assessment procedures personalized to the business needs of the construction company and the particular project at issue;
  • Detailed provisions on monitoring and recordkeeping of all contracts, agreements, payments, etc. relating to the construction company and its construction projects;
  • Policies that mandate that all contract terms include provisions on anti-bribery and anti-corruption;
  • An open policy that encourages whistleblowers, discourages retaliation, and promotes an honest corporate culture.

Construction companies—especially those engaged in global projects or who have dealings with foreign parties—should ensure that their policies for gift-giving, political contributions, charitable donations, and travel and entertainment expenses are properly reviewed for compliance with the FCPA.

Need Advice with the FCPA for the Construction Industry?

Construction projects are increasingly being carried out in emerging markets which are especially prone to bribery and corruption. This puts your company and your project at risk of increased federal scrutiny.

Federal agencies are targeting the construction industry for corruption, abuse, and bribery charges under the FCPA.

Maintaining a strong compliance program that identifies, monitors, and corrects internal weaknesses and ensures compliance with the FCPA is an excellent safeguard against corruption and bribery.

If you are being targeted for potential violations of the FCPA, it is time to retain legal counsel experienced in FCPA defense.

At Oberheiden, P.C., our team of FCPA defense attorneys include former FBI agents, former U.S. attorneys, and former prosecutors. We have the experience necessary to guide you through every stage of a FCPA investigation, including securing a favorable result for your company.

We can help defend your business against federal charges and implement a robust compliance program for your business.  Call us or contact our office for a free consultation.

If you are under
investigation
you should contact us today

Contact the Experienced Attorneys of Oberheiden, P.C. Now for a Confidential Consultation

Contact Us Now