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January 23 January 29, 2012 Bloomberg Businessweek

Politics&Policy

Quicko ce brings work to tablets page 35

Freight company Panalpina admitted to a culture of corruption and paid a ne of $70.6 million

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the company could have faced cripmade some of the depling nes or even a ban on receiving tails available to the U.S. government contracts. public on its webBut proving bribery would have site. In exchange, the taken prosecutors years of work and Justice Dept. agreed plenty of money to untangle the denot to prosecute. The company, which tails. The 15 Justice lawyers who work admitted to a culture of corruption, full-time on foreign corruption cant got o with a ne of $70.6 million, far devote that manpower to every case. less than it could have been forced to So the government did something that pay. Spokesperson Sandro Hofer wrote has become increasingly common: It got in an e-mail that Justice praised its coPanalpina to investigate itselfand to operation as exemplary. Panalpina pick up the tab. has since made dramatic changes in its Panalpina enlisted law rm Baker management culture. & McKenzie and accounting giant Panalpina is one of more than 20 Ernst & Young to conduct a threecompanies that have agreed to rat on year, multimillion-dollar investigathemselves in exchange for deferred tion that revealed a prosecution agreedecade of corrupments from the Daimler admitted subsidiaries were responsible for millions in bribes tion and bribes togovernment. The to o cials in 22 countries talling $27 million, U.S. made one such including payo s in agreement with Nigeria on behalf of French telecomclients who wanted munications giant to transport exploAlcatel-Lucent in sives. The company 2010 in exchange turned over a trove for paying nes of of information to the $92 million, coopJustice Dept., which erating with investi-

Equality

A new push for gay marriage rights

At least six states may tackle the issue of same-sex marriage this election year, potentially allowing them to join the six other states and Washington, D.C., where the practice is legal. Putting the question to the test on the ballot is risky: Voters have blocked e orts to approve gay vows in all 31 referendums so far. Esm E. Deprez
Same-sex marriage legal Under debate Gay rights groups in Maine may work to put the question to another vote; the state rejected it in 2009

DATA: COMPILED BY BLOOMBERG

The bottom line The U.S. government is increasingly relying on agreements that allow companies to investigate themselves for bribery in return for leniency.

AP PHOTO

; CORBIS

The governors of Washington and Maryland have said theyll bring gay marriage proposals this year

Last year, Minnesota legislators voted to amend the state constitution to ban gay marriage. Voters will be asked to ratify during the November election

North Carolinas legislature voted to amend the state constitution in 2011 to ban gay marriage. Residents will vote whether to ratify during the May primary

; GETTY IMAGES

New Jersey lawmakers said this month they will seek legalization, but the Republican governor has threatened to veto

gators, and bee ng up compliance. The company admitted it believed contractors for some of its subsidiaries paid millions of dollars in bribes to government o cials in Honduras, Costa Rica, Malaysia, and Taiwan, according to the deferred prosecution agreement available on the DOJs website. That same year, Daimler, which admitted certain subsidiaries were responsible for bribes in 22 countries, also reached agreement with the U.S. after conducting an internal investigation and paying $185 million to settle with the U.S. It absolutely helps us get additional evidence that would otherwise be more challenging for us to get, says Denis J. McInerney, the Justice Dept.s Fraud Section Chief, who adds it incentivizes companies to come forward. Of course the government must trust corporations to pony up all the un attering details, which is why companies often turn to former Justice lawyers who once prosecuted foreign bribery cases before joining big-name Washington rms. These investigations help ll a void where the government doesnt have the authority or resources, says Kirk Ogrosky, a partner at Arnold & Porter and a former prosecutor in the Justice Dept.s Fraud Division. Corporations comply in part out of fear. Since 2005, the government has won more than $4 billion from companies for bribery violations. In 2008, Siemens and three of its subsidiaries pleaded guilty to FCPA violations. The investigation uncovered a massive worldwide bribery scheme, Justice records show. The company paid $800 million to resolve the U.S. investigation. Even companies that plead guilty can end up with more lenient treatment for cooperating. Siemens spent nearly $1 billion investigating itself. Ultimately, the U.S. accepted a guilty plea to books and records o enses, instead of bribery. The company also won a much more valuable concession: Permission to continue doing business with the U.S. government. Elizabeth Dwoskin and David Voreacos