Overseas Corruption Probes: Beyond Wal-Mart

Recent allegations of widespread bribery of government officials at Wal-Mart’s (NYSE:WMT) Mexican subsidiary grabbed headlines and provided fresh ammunition to its critics. But the big-box retail chain is hardly alone in finding itself under scrutiny for unsavory actions abroad.

In fact, around 81 companies are currently being investigated for possible violations of the U.S. Foreign Corrupt Practices Act (FCPA) by federal agencies, Fortune reports. The Department of Justice says it’s pursuing 150 FCPA investigations against both companies and individuals.

The list of companies under investigation for  overseas corruption includes household names like Deere (NYSE:DE), Hewlett-Packard (NYSE:HPQ), Avon (NYSE:AVP), Qualcomm (NASDAQ:QCOM) and casino operator Las Vegas Sands (NYSE:LVS).

Some companies argue that bribes are often simply part of the business landscape in other countries and that penalizing American businesses for playing by local rules just hamstrings their international operations. Fortune cites the case of Lakeland Industries (NASDAQ:LAKE), which says that its failure to bribe foreign officials has hurt its international sales.

Many investigations go nowhere. However, some result in fines. Johnson & Johnson (NYSE:JNJ) settled allegations arising from a U.N. program for $78 million last year, while Halliburton (NYSE:HAL) paid out $550 million for bribing Nigerian officials in 2009.

Legal experts cited by Fortune said FCPA violations represented a fast-growing field for law firms. A number of companies doing business abroad are now warning investors of potential FCPA infractions on financial statement disclosures.

Article printed from InvestorPlace Media, https://investorplace.com/2012/04/overseas-corruption-probes-beyond-wal-mart/.

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