IDB List of Sanctioned Firms and Individuals

The firms and individuals listed below have been sanctioned by the IDB Group’s Sanctions Committee because they were found to have engaged in fraud, corruption, collusion or coercion, in violation of the IDB Group’s anti-corruption policies. These findings were made through an administrative process that permitted the accused firms and/or individuals to respond to the allegations pursuant to the Sanctions Procedures. Sanctions are meant to prevent and deter fraud and corruption in IDB Group-financed activities. 

The Sanctions Committee may impose any sanction that it deems to be appropriate under the circumstances, including but not limited to reprimand, conditions on future contracting and debarment. Debarred firms are declared ineligible to be awarded and participate in any IDB-financed contract for the periods indicated. Ineligibility may extend to any firm or individual who directly or indirectly controls the debarred firm or any firm which the debarred firm directly or indirectly controls. In the case of a debarred individual, ineligibility may extend to any firm which the debarred individual directly or indirectly controls.

IDB Group's list of Sanctioned Firms and Individuals

Search the sanctioned list: Loading...

Name	Entity Type/Nationality	Title Affiliation	Country of Project	Ineligibility From	Ineligibility To	Grounds
Öztaþ Ýnþaat inþaat Malzemeleri Ticaret Anonim Þirketi of Iller Sokak	Corporation/Turkey		Georgia	9/26/20111	9/26/2014	Fraudulent Practices, Cross-Debarment notice from the World Bank
Glosolve Limited	Corporation/United Kingdom		Mongolia	04/01/2014	03/31/2018	Fraudulent Practices, Cross-Debarment notice from the World Bank
Global Technology Solutions, Inc	Corporation/USA		Mongolia	04/01/2014	03/31/2018	Fraudulent Practices, Cross-Debarment notice from the World Bank
The Glocoms Group, Inc.	Corporation/USA		Mongolia	04/01/2014	03/31/2018	Fraudulent Practices, Cross-Debarment notice from the World Bank
Maurence Anguh	Person/USA		Mongolia	04/01/2014	03/31/2018	Fraudulent Practices, Cross-Debarment notice from the World Bank
Glocoms, Inc	Corporation/USA		Mongolia	04/01/2014	03/31/2018	Fraudulent Practices, Cross-Debarment notice from the World Bank
Gregory Ilias Lee also known as Greg Lee or Gregory Lee	Individual/Australia	Individual	Indonesia	08/02/2011	08/01/2014	Fraudulent Practices - Cross Debarment from The World Bank
Hefei Highway & Bridge Project Co. Ltd.	Firm/China		China	06/28/2011	06/27/2013	Fraudulent Practices - Cross Debarment from The World Bank
Human Resources Development Organization (HURDO)	Firm/Bangladesh		Bangladesh	07/29/2011	07/28/2015	Fraudulent Practices - Cross Debarment from The World Bank
Mr. Md. Shamul Alam	Individual/Bangladesh		Bangladesh	07/29/2011	07/28/2015	Fraudulent Practices - Cross Debarment from The World Bank
Lasservice NV	Firm/Belgium		Gambia	06/03/2011	06/02/2013	Fraudulent Practices - Cross Debarment from The World Bank
Mr. Joseph Nuijten	Individual/Belgium		Gambia	06/03/2011	06/02/2013	Fraudulent Practices - Cross Debarment from The World Bank
Marvel Novedi	Firm/France		Democratic Republic of Congo	07/26/2011	07/25/2014	Fraudulent Practices - Cross Debarment from The World Bank
Marvel SA	Firm/France		Democratic Republic of Congo	07/26/2011	07/25/2014	Fraudulent Practices - Cross Debarment from The World Bank
Marvel SAS	Firm/France		Democratic Republic of Congo	07/26/2011	07/25/2014	Fraudulent Practices - Cross Debarment from The World Bank
Societe Marvel	Firm/France		Democratic Republic of Congo	07/26/2011	07/25/2014	Fraudulent Practices - Cross Debarment from The World Bank
Dr. Hans Peter Schone	Individual/Germany		Russia	08/17/2011	08/16/2016	Fraudulent Practices - Cross Debarment from The World Bank
Proveeduría Medica	Firm/Argentina		Argentina	06/16/2011	06/15/2014	Fraudulent Practices - Cross Debarment from The World Bank
Association Muhandison	Firm/Tajikistan		Tajikistan	06/01/2011	05/31/2014	Fraudulent Practices - Cross Debarment from The World Bank
LLC UN&CO	Firm/Tajikistan		Tajikistan	06/01/2011	05/31/2014	Fraudulent Practices - Cross Debarment from The World Bank
Mr. K. M. Rahman	Individual/Bangladesh		Bangladesh	07/29/2011	07/28/2015	Fraudulent Practices - Cross Debarment from The World Bank
Samajik Sangha (SS)	Firm/Bagladesh		Bangladesh	07/29/2011	07/28/2015	Fraudulent Practices - Cross Debarment from The World Bank
Sego Ventures Nigeria Limited	Firm/Nigeria		Nigeria	06/03/2011	06/02/2013	Fraudulent Practices - Cross Debarment from The World Bank
Mrs. Shamsunnahar	Individual/Bangladesh		Bangladesh	08/22/2011	08/21/2015	Fraudulent Practices - Cross Debarment from The World Bank
Development Action Centre (DAC)	Firm/Bangladesh		Bangladesh	08/22/2011	08/21/2015	Fraudulent Practices - Cross Debarment from The World Bank
Mr. Sealtiel Orozco	Individual/Nicaragua		Nicaragua	08/23/2011	08/22/2013	Fraudulent Practices - Cross Debarment from The World Bank
Telecomunicaciones y Sistemas S.A.	Firm/Nicaragua		Nicaragua	08/23/11	08/22/2013	Fraudulent Practices - Cross Debarment from The World Bank
Karma Mara, Indonesia	Individual/Indonesia		Indonesia	05/17/2011	05/16/2013	Non-specified Practices - Cross-debarment from The Asian Development Bank
Tiyasa Suwarly M	Individual/Indonesia		Indonesia	05/17/2011	05/16/2017	Non-specified Practices - Cross-debarment from The Asian Development Bank
lr. Widhiastoto	Individual/Indonesia		Indonesia	05/17/2011	05/16/2017	Non-specified Practices - Cross-debarment from The Asian Development Bank
Akhtar M. Babul M	Individual/Bangladesh		Bangladesh	05/17/11	05/16/15	Non-specified Practices - Cross-debarment from The Asian Development Bank
PT Multi Area Conindo	Firm/Indonesia		Indonesia	05/17/2011	05/16/2017	Non-specified Practices - Cross-debarment from The Asian Development Bank
YANG LIN	Individual/China		Sudan	05/11/2011	05/10/2014	Fraudulent Practices - Cross-Debarment from The World Bank
Zhejiang Zheda Insigma Technology Co. Ltd	Firm/China		Bulgaria	08/01/2011	07/31/2014	Fraudulent Practices - Cross-Debarment from the European Bank for Reconstruction and Development
Zhejiang Zheda Insigma Group Co. Ltd.	Firm/China		Bulgaria	08/01/2011	07/31/2014	Fraudulent Practices - Cross-Debarment from the European Bank for Reconstruction and Development
Idreco S.p.A	Firm/Italy		Bulgaria	08/01/2011	07/31/2014	Fraudulent Practices - Cross-Debarment from the European Bank for Reconstruction and Development
Idreco Invest S.p.A.	Firm/Italy		Bulgaria	08/01/2011	07/31/2014	Fraudulent Practices - Cross Debarment from the European Bank for Reconstruction and Development
SDC Consulting Co. Limited Cambodia	Firm/Cambodia		N/A	07/12/2011	07/11/2021	Fraudulent Practices - Cross Debarment from the Asian Development Bank
Sustainable Development Consultants Cambodia Limited	Firm/Cambodia		N/A	07/12/2011	07/11/2021	Fraudulent Practices - Cross Debarment from the Asian Development Bank
Ly Moni Roth	Individual/Cambodia		N/A	07/12/2011	Indefinite	Fraudulent Practices - Cross Debarment from the Asian Development Bank
Syani Phirom	Individual/Cambodia		N/A	07/12/2011	Indefinite	Fraudulent Practices - Cross Debarment from the Asian Development Bank
Sukhjin Co. Ltd	Firm/Mongolia		N/A	07/12/2011	07/11/2018	Fraudulent Practices - Cross-Debarment from the Asian Development Bank
Luis Adolfo Pérez Obregón	Individual/Nicaragua		Nicaragua	06/22/2011	06/22/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1702/SF-NI
Teresa Antonia Pérez Brenes	Individual/Nicaragua		Nicaragua	06/22/2011	06/22/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1702/SF-NI
Luis Adolfo Pérez Brenes	Individual/Nicaragua		Nicaragua	06/22/2011	06/21/2016	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1702/SF-NI
Empresa Constructora Luis Pérez Brenes S.A.	Firm/Nicaragua		Nicaragua	06/22/2011	06/22/2016	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1702/SF-NI
Mario Alirio Palacios Quiceno	Individual/Colombia		Colombia	06/22/2011	06/22/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1950/OC-CO
Gabriel Jean-Charles	Individual/Haiti		Haiti	06/22/2011	06/22/2021	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1491/SF-HA
Marylyn Paul Theodore	Individual/Haiti		Haiti	06/22/2011	06/22/2016	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1491/SF-HA
Ronald Theodore	Individual/Haiti		Haiti	06/22/2011	06/22/2016	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1491/SF-HA
Chantiers Modernes d'Haiti	Firm/Haiti		Haiti	06/22/2011	06/22/2016	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1491/SF-HA
Marcos Mario Medina Castillo	Individual/Bolivia	Legal Representative of Fokus Proyecciones	Bolivia	03/22/2011	03/22/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1091/SF-BO
Fokus Proyecciones	Firm/Bolivia		Bolivia	03/22/2011	03/22/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1091/SF-BO
Gean Carlo Gutiérrez Morón	Individual/Peru		Peru	03/22/2011	03/22/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1591/OC-PE
Pedro Miguel Távara Salazar	Individual/Peru		Peru	03/22/2011	03/22/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1591/OC-PE
Miguel Ángel Zárate Mardueño	Individual/Mexico	Legal Representative of Moctezur Construcciones S.A. de C.V. (MOCTEZUR)	Mexico	03/03/2011	03/03/2014	Fraudulent practices. Art. 3.1 (a)(iii)General Conditions applicable to the Tender Documents. Contract Agreement 1744/OC-ME
Moctezur Construcciones S.A. de C.V. (MOCTEZUR)	Firm/Mexico		Mexico	03/03/2011	03/03/2014	Fraudulent practices. Art. 3.1 (a)(iii)General Conditions applicable to the Tender Documents. Contract Agreement 1744/OC-ME
Abraham de Jesús Berrios Hernández	Individual/Guatemala	Legal Representative of Administradora de Marcas S.A.	Guatemala	03/02/2011	03/02/2014	Fraudulent practices. Art. 1.14 (a)(ii)General Conditions Contract Agreement 1469/OC-GU
Administradora de Marcas S.A.	Firm/Guatemala		Guatemala	03/02/2011	03/02/2014	Fraudulent practices. Art. 1.14 (a)(ii)General Conditions Contract Agreement 1469/OC-GU
Lenin Medina Porras	Individual/Mexico	Legal Representative of Probain de Occidente SRL de C.V. (PROBAIN)	Mexico	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1383/OC-ME
Probain de Occidente SRL de C.V. (PROBAIN)	Firm/Mexico		Mexico	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1383/OC-ME
Gustavo Cimar Unzueta Sossa	Individual/Bolivia		Bolivia	02/07/2011	Permanent	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1075/SF-BO
José Luis Valadez	Individual/Mexico	Legal Representative of Constructora y Arrendadora Cogral, S.A. de C.V.	Mexico	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1744/OC-ME
Constructora y Arrendadora Cogral, S.A. de C.V.	Firm/Mexico		Mexico	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1744/OC-ME
Constructora Carrera	Firm/Guatemala		Guatemala	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1469/OC-GU
Israel Carrera Palencia	Individual/Guatemala	Legal Representative of Constructora Carrera	Guatemala	02/07/2011	02/07/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1469/OC-GU
Gerardo Rafael Barreto Maldonado	Individual/Bolivia		Bolivia	01/20/2011	01/20/2014	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1557/SF-BO
Víctor Juan Pereira	Individual/Bolivia	General Manager of Ingeniería Prefabricados y Construcción S.R.L. - IPRECO	Bolivia	01/20/2011	01/20/2016	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1557/SF-BO
Ingeniería Prefabricados y Construcción S.R.L. - IPRECO	Firm/Bolivia		Bolivia	01/20/2011	01/20/2016	Fraudulent practices, Art. 5.02 (c)(ii) General Conditions Contract Agreement 1557/SF-BO
Ramón Enrique Moreno	Individual/Honduras		Honduras	01/21/2011	01/21/2014	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1059/SF-HO
Leonardo Morales Ordoñez	Individual/Ecuador		Ecuador	10/08/2010	10/08/2013	Corruptive practices. Art 5.02 (c) General Conditions Contract Agreement 1802/OC-EC
Escuela Andaluza de Salud Pública (EASP)	Firm/España		Argentina	09/15/2010	09/15/2013	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1193/OC-AR
Juan José Pérez Brenes	Individual/Nicaragua	Legal Representative of Compañía Ing. Juan José Pérez Brenes	Nicaragua	09/15/2010	09/15/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1100/SF-NI
Carlos Fernando Laje	Individual/Argentina		Argentina	09/15/2010	09/15/2015	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1193/OC-AR
Enrique Eduardo Rozenblat	Individual/Argentina		Argentina	09/15/2010	09/15/2015	Fraudulent practices, Art. 5.02(c)(iii) General Conditions Contract Agreement 1193/OC-AR
Proveedora Ferretera	Firm/Honduras		Honduras	5/3/2010	Permanent	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1077/SF-HO
Ramon de Jesus Flores Castro	Individual/Honduras	Legal representative and general manager of Proveedora Ferretera	Honduras	5/3/2010	Permanent	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1077/SF-HO
Juan José Zavala Reyes	Individual/Nicaragua	Legal Representative of Construcciones Alaniz y Compañía Limitada	Nicaragua	4/5/2010	4/5/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1702/SF-NI
Judith Leticia Ayala Talavera	Individual/Paraguay		Paraguay	4/5/2010	4/5/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1448/OC-PR
Compañia de la Construccion Sociedad Anonima de Capital Variable – CODECON S.A. de C.V.	Firm/Honduras		Honduras	3/19/2010	Permanent	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1048/SF-HO
Vladimir Su Yañez	Individual/Honduras	Legal Representative of Compañia de la Construccion Sociedad Anonima de Capital Variable – CODECON S.A. de C.V.	Honduras	3/19/2010	Permanent	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1048/SF-HO
S y S Ingeniería y Consultoría Ltda.	Firm/Colombia		Colombia	3/19/2010	3/19/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1825/OC-CO
Janeth Patricia Sanabria Rodríguez	Individual/Colombia	Legal Representative of S y S Ingeniería y Consultoría Ltda.	Colombia	3/19/2010	3/19/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1825/OC-CO
Juan Carlos Sanabria Rodríguez	Individual/Colombia	Engineer of S y S Ingeniería y Consultoría Ltda.	Colombia	3/19/2010	3/19/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1825/OC-CO
Juan Domingo Tablares Aliaga	Individual/Bolivia		Bolivia	7/10/2009	Permanent	Fraudulent and extortionary practices, Art. 6 (d)(ii) (iii), Applicable Norms to Technical Cooperation ATN/ME-9627-BO
José Raymundo Velásquez Zepeda	Individual/Honduras		Honduras	7/10/2009	7/10/2012	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1115/SF-HO
Felipe Edgardo Oyuela Silva	Individual/Honduras		Honduras	7/10/2009	7/10/2012	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1115/SF-HO
Nicolás Javier Meléndez Velásquez	Individual/Honduras		Honduras	7/10/2009	7/10/2012	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1115/SF-HO
Ivar Demóstenes Castellanos Ibañez	Individual/Bolivia		Bolivia	6/30/2009	6/30/2012	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1057/SF-BO
Martín Javier Battiti	Individual/Honduras		Honduras	6/30/2009	6/30/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1059/SF-HO
Raúl Pernia Ruíz	Individual/Colombia		Colombia	6/15/2009	6/15/2013	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 910/OC-CO
Ricardo Augusto Reynoso González	Individual/Guatemala	General Manager, Vice President, Partner and Legal Representative of Sistemas de Investigación de Mercados, SA (SIM)	Guatemala	6/15/2009	Permanent	Fraudulent practices, Art. 6 (d) (iii), Applicable Norms to Technical Cooperation ATN/ME-6537-GU
Hans Estuardo Caderón Palacios	Individual/Guatemala	Project Supervisor and Sub-coordinator	Guatemala	6/15/2009	Permanent	Fraudulent practices, Art. 6 (d) (iii), Applicable Norms to Technical Cooperation ATN/ME-6537-GU
Acceso, Accesorios, Complementos y Servicios	Firm/Guatemala		Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Luis Rafael Guerra Sandoval	Individual/Guatemala	Owner of Acceso, Accesorios, Complementos y Servicios	Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Proyectos Elite	Firm/Guatemala		Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Marvin Estuardo Escobar Ruano	Individual/Guatemala	Owner of Proyectos Elite	Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Maquimar S.A.	Firm/Guatemala		Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Francisco Javier Martinez Espinoza	Individual/Guatemala	Owner of Maquimar S.A.	Guatemala	3/12/2009	3/12/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Consultora Tecnodinámica S.R.L.	Firm/Paraguay		Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Consultora Guaraní S.A. Ingenieros Civiles	Firm/Paraguay		Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Consorcio Tecnodinámica y Asociados	Firm/Paraguay		Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Graciela Beatriz Modesto Merlo	Individual/Paraguay	Legal Representative of Consultora Guaraní	Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Julio Vicente Ullón Espinola	Individual/Paraguay	Legal Representative of Consultora Tecnodinámica	Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Pericles Modesto Schussmuller	Individual/Paraguay	Legal Representative of Consultora Guaraní	Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
José Gustavo Modesto Merlo	Individual/Paraguay	Legal Representative of Consultora Guaraní	Paraguay	2/9/2009	Permanent	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1278/OC-PR
Constructora RGH Contratistas Generales S.R.L.	Firm/Perú		Perú	2/9/2009	2/9/2012	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1325/OC-PE
Consorcio Leoncio Cárdenas Morán y Constructora RGH Contratistas Generales S.R.L.	Firm/Perú		Perú	2/9/2009	2/9/2012	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1325/OC-PE
Richard Guevara Herrera	Individual/Perú	Manager of Constructora RGH Contratistas Generales S.R.L.	Perú	2/9/2009	2/9/2012	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1325/OC-PE
Leoncio Cárdenas Morán	Individual/Perú	Legal Representative of Consorcio Leoncio Cárdenas Morán y Constructora RGH Contratistas Generales S.R.L.	Perú	2/9/2009	2/9/2012	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1325/OC-PE
Diseño y Construccion en Ingenieria Civil y Agricola S.A.	Firm/Guatemala		Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Luis Fernando Espino Montenegro	Individual/Guatemala	Legal Representative and Owner of Diseño y Construccion en Ingenieria Civil y Agricola S.A.	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Diseño de Ingenieria de Riego y Agua S.A.	Firm/Guatemala		Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.2 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Victor Manuel Chavez	Individual/Guatemala	Legal Representative and Owner of Diseño de Ingenieria de Riego y Agua S.A.	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.2 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Agroservicios M&M	Firm/Guatemala		Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Milagro Amparo Escobar Sandoval de Sandoval	Individual/Guatemala	Owner of Agroservicios M&M	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Consulfrutha S.A.	Firm/Guatemala		Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Jorge Mario Cabrera Madrid	Individual/Guatemala	Owner and Manager of Consulfrutha S.A.	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Cesar Augusto Juarez Barreta	Individual/Guatemala	Legal Representative and Owner of Consulfrutha S.A.	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Agrosistemas B.S.	Firm/Guatemala		Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Byron Leonel Sandoval Castañeda	Individual/Guatemala	Legal Representative and Owner of Agrosistemas B.S.	Guatemala	1/26/2009	1/26/2014	Collusive Practices, Art. 5.02 (c)(iv) General Conditions Contract Agreement 1331/OC-GU
Gabinete Tecnico, S.A. de C.V. (GATESA)	Firm/Honduras		Honduras	1/26/2009	1/26/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Juan Jacobo Káttan Káttan	Individual/Honduras	Partner of GATESA	Honduras	1/26/2009	1/26/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Osmar Danilo Castellanos Vásquez	Individual/Honduras	Partner of GATESA	Honduras	1/26/2009	1/26/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Joséfina Salazar Barrera	Individual/Honduras	Partner of GATESA	Honduras	1/26/2009	1/26/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Telma Iris David de Licona	Individual/Honduras	Legal representative, general manager and majority shareholder of GATESA	Honduras	1/26/2009	1/26/2014	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Santa Berlioz Bendaña de Ocampo	Individual/Honduras	Project Chief of GATESA	Honduras	1/26/2009	1/26/2012	Fraudulent practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1053/SF-HO
Claudia Díaz Durán de Rocco	Individual/Guatemala		Guatemala	1/16/2009	1/16/2012	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 1221/OC-GU
Carlos Olivella	Individual/Colombia		Colombia	7/16/2008	7/16/2013	Bribery Practices, Art. 6 (d)(i) General Conditions of Technical Cooperation Agreement ATN/ME-7978-CO
Patricio Galindo Vargas	Individual/Bolivia		Bolivia	7/16/2008	7/16/2013	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 995/SF-BO
Amparo Navia de Camacho	Individual/Bolivia		Bolivia	7/16/2008	7/16/2013	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 995/SF-BO
Juan Jose Chacon Bozo	Individual/Bolivia		Bolivia	7/16/2008	7/16/2013	Fraudulent Practices, Art. 5.02 (c)(iii) General Conditions Contract Agreement 995/SF-BO
Camara Agropecuaria de La Paz (CALP)	Firm/Bolivia		Bolivia	4/28/2008	4/28/2012	Fraudulent Practices, Art. 6 (d) (iii) General Conditions of Technical Cooperation Agreement ATN/MH-7005-BO
Juan Carlos Zamorano Rodriguez	Individual/Bolivia		Bolivia	4/28/2008	4/28/2012	Fraudulent Practices, Art. 6 (d) (iii) General Conditions of Technical Cooperation Agreement ATN/MH-7005-BO
Hernan Tito Velasquez	Individual/Bolivia		Bolivia	4/28/2008	4/28/2012	Fraudulent Practices, Art. 6 (d) (iii) General Conditions of Technical Cooperation Agreement ATN/MH-7005-BO
Ivan Aguirre Peña	Individual/Bolivia		Bolivia	4/28/2008	4/28/2012	Fraudulent Practices, Art. 6 (d) (iii) General Conditions of Technical Cooperation Agreement ATN/MH-7005-BO
Oscar Alberto Díaz	Individual/Argentina	Principal Technical Advisor of the Programa de Eficiencia y Transparencia en las Compras y Contrataciones del Estado	Honduras	2/20/2008	2/20/2018	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1059/SF-HO
Ana Noemí Santamaría	Individual/Argentina	Legal representative of Swiss Purchasing Company S.A. (Swip.Co)	Honduras	2/20/2008	2/20/2018	Corruptive practices. Art 5.02 (c)(i) General Conditions Contract Agreement 1059/SF-HO
Luis A. Ledezma	Individual/Bolivia		Bolivia	9/27/2007	9/27/2012	Fraudulent and collusive practices, Art 5.02 (c)(iii)(iv) General Conditions Contract Agreement 1050/SF-BO
Santiago Romero	Individual/Bolivia		Bolivia	9/27/2007	9/27/2012	Fraudulent and collusive practices, Art 5.02 (c)(iii)(iv) General Conditions Contract Agreement 1050/SF-BO
Anibal Aldana Ortega	Individual/Bolivia	Manager of Empresa Constructora ALINCO SRL	Bolivia	9/27/2007	9/27/2012	Collusive practices, Art 5.02 (c)(iv) General Conditions Contract Agreement 1050/SF-BO
Renan Alfredo Rodriguez	Individual/Bolivia	Manager of Empresa Constructora del SUR CONSUR SRL	Bolivia	9/27/2007	9/27/2012	Collusive practices, Art 5.02 (c)(iv) General Conditions Contract Agreement 1050/SF-BO
Empresa Constructora ALINCO SRL	Firm/Bolivia		Bolivia	9/27/2007	9/27/2012	Collusive practices, Art 5.02 (c)(iv) General Conditions Contract Agreement 1050/SF-BO
Empresa Constructora del SUR CONSUR SRL	Firm/Bolivia		Bolivia	9/27/2007	9/27/2012	Collusive practices, Art 5.02 (c)(iv) General Conditions Contract Agreement 1050/SF-BO
Manuel Herce	Individual/Spain	Manager of Enginyeria i Gestió d’Infraestructures S.L. (EGI)	Honduras	9/13/2007	9/13/2017	Corrupt practices, Art 5.02 (c)(iii) General Conditions and Art 2.01 Annex B Contract Agreement 1106/SF-HO
Enginyeria i Gestió d’Infraestructures S.L. (EGI)	Firm/Spain		Honduras	9/13/2007	9/13/2017	Corrupt practices, Art 5.02 (c)(iii) General Conditions and Art 2.01 Annex B Contract Agreement 1106/SF-HO
Miguel Rojas Alba	Individual/Bolivia	General Manager of CIACONST Srl	Bolivia	5/18/2007	5/18/2012	Fraudulent and corrupt practices, Art 5.02(c) (iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1075/SF-BO
CIACONST S.R.L.	Firm/Bolivia		Bolivia	5/18/2007	5/18/2012	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1006/SF-BO
Gabriel Mejía Valdivieso	Individual/Bolivia	General Coordinator of the Congreso Digital project	Bolivia	3/23/2007	Permanent	Fraudulent and Collusive Practices, Art 6 (d)(iii) and Art 6 (d)(iV) General Conditions of Technical Cooperation Agreement ATN/SF- 8904-BO
Dolores Conde Villegas	Individual/Bolivia	Legal Representative of Desarrollo en Sistemas y Computación DELCOM	Bolivia	3/23/2007	Permanent	Fraudulent and Collusive Practices, Art 6 (d)(iii) and Art 6 (d)(iV) General Conditions of Technical Cooperation Agreement ATN/SF- 8904-BO
Desarrollo en Sistemas y Computación DELCOM	Firm/Bolivia		Bolivia	3/23/2007	Permanent	Fraudulent and Collusive Practices, Art 6 (d)(iii) and Art 6 (d)(iV) General Conditions of Technical Cooperation Agreement ATN/SF- 8904-BO
Juan Batista	Individual/Panamá	Director and Member of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Mirna Murillo de Vergara	Individual/Panamá	Owner and Secretary of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Adán Acosta Sánchez	Individual/Panamá	Owner, Director and Treasurer of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Geneva Alonso	Individual/Panamá	Vice President and Director of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Siria Rodríguez de Batista	Individual/Panamá	President, Director and Legal Representative of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
José Gonzalez	Individual/Panamá	Employee of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Benigno Tomás Rodríguez	Individual/Panamá	Employee of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Reynaldo Anel Córdoba	Individual/Panamá	General Coordinator and Legal Representative of Educación Técnica Especializada S.A. EDUTEC	Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN
Educación Técnica Especializada S.A. EDUTEC	Firm/Panamá		Panamá	3/23/2007	Permanent	Fraudulent Practice, Art 5.02(c)(iii) General Conditions and Art. 2.01 Annex B Contract Agreement 1403/OC-PN

---

Recent guilty plea in US demonstrates ongoing commitment to corruption prosecutions

On May 19 2011 the US Department of Justice (DOJ) announced that Jorge Granados, former chief executive officer (CEO) of Miami-based telecommunications company Latin Node Inc (LatiNode), pleaded guilty to one count of conspiracy to violate the Foreign Corrupt Practices Act. On December 21 2010 the DOJ obtained a 19-count indictment against Granados and other LatiNode senior executives for their roles in a conspiracy to pay over $500,000 in bribes to Honduran government officials to retain a lucrative telecommunications contract. Granados's plea represents the latest example of the US government's ongoing and aggressive commitment to prosecute high-level business executives for Foreign Corrupt Practices Act violations.

Background

In December 2005 LatiNode was awarded a contract with Empresa Hondurena de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras. Almost immediately after winning the contract, LatiNode executives learned that LatiNode would need to bribe Hondutel employees in order to keep them from rescinding the contract. The indictment alleged that Granados and other LatiNode executives agreed to a secret deal to pay bribes to Hondutel officials, including the general manager, a Hondutel senior attorney and a minister of the Honduran government who became a representative on the Hondutel board of directors(1). The indictment also alleged that Granados actively participated in making concealed payments by laundering money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by government officials(2). On April 7 2009 LatiNode pleaded guilty to a one-count criminal violation of the Foreign Corrupt Practices Act (3). As part of the plea agreement, LatiNode agreed to pay a $2 million fine and cooperate with any further investigations by law enforcement agencies(4).

Three other former LatiNode senior executives – Manuel Salvoch, chief financial officer (CFO), Juan Pablo Vasquez, chief commercial officer, and Manuel Caceres, vice president for business development – have already pleaded guilty to the Foreign Corrupt Practices Act violations this year for their involvement in the Hondutel bribery scheme. Granados is scheduled for sentencing on August 22 2011 and faces up to five years in prison and a fine of $250,000 or more(5).

Comment

Granados's plea agreement reflects the DOJ's aggressive stance on holding high-level business executives accountable for the Foreign Corrupt Practices Act violations. During a Senate committee hearing last November, Senator Arlen Specter had expressed concern regarding the lack of significant prosecutions of individuals who are responsible for the Foreign Corrupt Practices Act violations, notwithstanding the penalties against companies and shareholders for such violations(6).

Recent cases suggest that, in fact, high-level business executives are being held accountable for Foreign Corrupt Practices Act violations. For example, on January 24 2011 the former CEO and CFO of Innospec Inc, Paul W Jennings, agreed to settle the Foreign Corrupt Practices Act charges with the Securities and Exchange Commission for approving improper payments to Iraqi and Indonesian government officials(7). On May 10 2011 a federal jury in California found Lindsey Manufacturing Co president, Keith Lindsey, its CFO, Steve Lee, and an intermediary guilty on all counts in a criminal prosecution for the Foreign Corrupt Practices Act violations(8). As Assistant Attorney General Lanny A Breuer of the Criminal Division of the DOJ remarked about the Granados case: "[f]oreign bribery undermines competition in the marketplace, and weakens democratic institutions. CEOs and other corporate executives should know that now, more than ever, violating the Foreign Corrupt Practices Act will lead to criminal prosecution"(9).

For further information on this topic please contact Richard Craig Smith, John Kelly, Fatema Merchant orRabeha Kamaluddin at Fulbright & Jaworski LLP by telephone (+1 202 662 0200), fax (+1 202 662 4643) or email (rcsmith@fulbright.com, jkelly@fulbright.com, fmerchant@fulbright.com,rkamaluddin@fulbright.com)

Endnotes

(1) Criminal Indictment, United States v Latin Node Inc, Case 10-20881, available athttp://www.justice.gov/criminal/fraud/fcpa/cases/granados-jorge/12-21-10granados-indict.pdf

(2) Id at 22-23

(3) In early 2007, Florida-based eLandia International Inc (eLandia) acquired LatiNode. Following the acquisition, eLandia discovered the bribes and self-disclosed the violations to the DOJ and Securities and Exchange Commission.

(4) Criminal Plea Agreement, United States v Latin Node Inc, Case 09-20239, available athttp://www.justice.gov/criminal/fraud/fcpa/cases/litton-applied/04-03-09latinnode-plea-agree.pdf

(5) Specifically, Granados faces a fine of the greater of $250,000, or twice the gross amount of any pecuniary gain or loss that any person derived or sustained from the offence. See Criminal Plea Agreement, 10-CR-20881 (SD Fla May 19 2011)

(6) See "Granados and Caceres Indictments Latest in FCPA Individual Prosecutions," Fulbright & Jaworski LLP Briefing, December 22 2010

(7) See Securities and Exchange Commission Press Release, "SEC Charges Former CEO of Innospec for Role in Bribery Scheme", available at http://www.sec.gov/news/press/2011/2011-21.htm

(8) United States v Noriega et al, 2:10-CR-01031 (CD Cal May 10 2011)

(9) DOJ Press Release, "Former CEO of US Telecommunications Company Pleads Guilty to Foreign Bribery Conspiracy" (May 19 2011), available at http://www.justice.gov/opa/pr/2011/May/11-crm-644.html

Contributed by Fulbright & Jaworski LLP

New Anti-Corruption Laws passed in Mexico - Spotlight on Contractors and Concession Holders

Introduction

The Senate has passed the Federal Anti-corruption Law regarding Government Contracts. It is expected to be passed by the lower house in the course of 2011, probably before the end of the congressional term.

Mexico is a member state of the United Nations Convention against Corruption, the Inter-American Convention against Corruption and the Organisation for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. When the law comes into force, it will fill one of the main legislative gaps in the government's fight against corruption, which focuses specifically on private contractors that do business with the government. This anti-corruption drive will also affect business undertaken with state institutions (eg, Pemex and the Comisión Federal de Electricidad (CFE), the government-owned oil and power companies), and with the agencies in charge of awarding and handling infrastructure concessions (eg, the Ministry of Communications). The purpose of the law is to penalise individuals and companies, from Mexico or abroad, that engage in unethical behaviour in the context of government contracting in Mexico - the law refers to such actions as 'irregular activities'. Public servants are already subject to the Federal Law on the Administrative Responsibilities of Public Servants, but this statute is enforceable only in respect of wrongdoing on the government side, whereas OECD studies and international practice show that corrupt practices are more likely to originate with a contractor or concession holder. In seeking to be more active in regulating and overseeing contractors, Mexico is following an international trend.

Key features

The Anti-corruption Law applies only at federal level, but at which nearly 70% of the federal budget is spent through contracts and concessions. It covers all forms of contract, agreement and concession; it even extends to the granting of permits, from the design, bid preparation, tendering and award stages to their execution and completion. It explicitly applies to Pemex and CFE contracts, and to infrastructure projects. Like most foreign legislation implemented by OECD countries, and following a trend that was started by the US Foreign Corrupt Practices Act, the law also applies to acts beyond the Mexican territory, covering irregular activities by national companies or individuals in international commercial transactions where a foreign official is involved.

The federal agency in charge of enforcing the law is the Bureau of the Federal Comptroller, along with its internal comptroller departments which are integrated into most government agencies and public entities. The bureau is also in charge of enforcing the Law on the Administrative Responsibilities of Public Servants and supervising budget spending at federal level.

The Anti-corruption Law empowers the bureau to punish persons and companies involved in irregular activity. This includes intermediaries, agents and consultants, but also extends to the beneficiaries of irregular activities - which will typically be Mexican-domiciled companies and their shareholders, parents and affiliates, whether foreign or Mexican.

The law identifies eight forms of irregular activity. As well as bribery and peddling influence, these include a catch-all provision that penalises any action that involves obtaining - or has the purpose or effect of obtaining - an undue benefit or advantage in a government contract. 'Bribery' is broadly defined to include promises, undue influence or the giving of money or anything of value to a private contractor that is involved in the design, preparation or execution of a bid or public contract. Unlike anti-bribery laws in some other jurisdictions, the law makes no exception for facilitation or similar payments made to accelerate the receipt of a service or contract that would have been rightfully assigned or granted in any case.

The law provides for large fines, which may be increased in proportion to the benefit gained. It also allows the authorities to blacklist individuals and companies, debarring them from participation in federal government contracts or concessions for up to 10 years. Fines imposed by the bureau will be treated as tax credits and may be collected pursuant to tax laws and regulations. The bureau's penalties are independent and additional to any criminal penalties which may be imposed following prosecution by the Attorney General's Office. The law provides for a 10-year statute of limitations.

The law includes a leniency programme whereby individuals and companies involved in irregular activity may plead guilty to involvement and assist the bureau in conducting its investigation, thereby qualifying for a 50% to 70% reduction in fines.

Anyone has standing to file a claim under the law. In practice, many claims are likely to be filed by the agency or public entity in charge of the government contract or concession in question. However, the law allows claims to be filed online, anonymously, or through the filing of a claim submitted under oath with respect to knowledge of the facts, the indication of evidence and information about the responsible parties - such a claim can be brought only by a private contractor, not by the government. The bureau is mandated to maintain claimant confidentiality. This factor is expected to encourage competitors to file corruption claims if there is reason to believe that a case for corruption may exist, although concerns remain about the submission of false information.

A public servant must make known a fact or activity that violates the law; otherwise, he or she is subject to penalties under the Federal Law on the Administrative Responsibilities of Public Servants and is liable under the Federal Criminal Code.

The bureau may start an investigation on its own initiative or on the basis of information provided in a claim. The law confers broad powers to request production of documents and information not only from government agencies or state entities, but also from third parties. For the purposes of its investigation, the bureau may access information that is classified or reserved under the Freedom of Public Information Laws and Regulations.

If, on the basis of an investigation, the bureau can show probable cause of a violation, it must begin administrative penalty proceedings. Once notified, the defendants have 15 business days to file a plea in response. Thereafter, the bureau must allow the production and admission of evidence by the defendants under the terms of the Federal Rules of Civil Procedure. Thereafter, the defendants have five business days to submit closing arguments. The bureau will then have 10 business days to issue its resolution.

Comment

In future, the law is expected to open up a broad area of practice in respect of claims and investigations. The coming months and years are likely to see the development of significant precedents and further legislation.

Contributed by López Velarde, Heftye y Soria

Jury convicts first corporate Foreign Corrupt Practices Act defendant

Comment by Fulbright & Jaworski LLP

On May 10 2011 Lindsey Manufacturing Company, two of its executives and a Mexican intermediary were convicted by a federal jury on all counts for their alleged respective roles in a bribery scheme involving Mexican government officials. After a five-week trial, the jury took just one day to return the guilty verdicts. Executives Keith E Lindsey and Steve K Lee were each convicted of one count of conspiracy to violate the Foreign Corrupt Practices Act and five counts of Foreign Corrupt Practices Act violations. Angela Aguilar, the Mexican intermediary, was convicted of one count of money laundering conspiracy.

Facts

Lindsey Manufacturing hired Grupo Internacional de Asesores SA to act as its Mexican sales representative and to obtain contracts for Lindsey from Mexico's state-owned utility company, Comisión Federal de Electricidad (CFE). Grupo received a percentage of Lindsey Manufacturing's revenue from CFE contracts. Aguilar and her husband, Enrique Aguilar,(1) were directors of Grupo.

At trial, the Department of Justice presented evidence that from approximately February 2002 until March 2009, Lindsey Manufacturing and Lindsey, Lee and others orchestrated a bribery scheme whereby Mr Aguilar was paid a 30% commission on Lindsey Manufacturing's sales to CFE, a significantly higher commission than that given to previous Lindsey Manufacturing sales representatives. According to the department's evidence, Lindsey and Lee understood that all or part of this commission amount would be used to bribe CFE officials in exchange for contract awards. According to the evidence presented at trial, Lindsey Manufacturing then increased the price of the goods and services sold to CFE by 30% to ensure that CFE, rather than Lindsey Manufacturing, absorbed the cost of the bribes.

The Department of Justice also presented evidence that:

• Grupo submitted fraudulent invoices to Lindsey Manufacturing for the commission amount;
• Lindsey and Lee then wired the money requested into Grupo's account, knowing that the invoices were fraudulent and that at least some of the funds were being used as bribes;
• Lindsey and Lee learned that Mr Aguilar had a corrupt relationship with a top CFE official;
• Mrs Aguilar authorised money in the Grupo account to be used to buy a CFE official a $297,500 Ferrari Spyder and a $1.8 million yacht, in addition to paying more than $170,000 worth of the official's credit card bills; and
• Mrs Aguilar also authorised the transfer of $500,000 from Grupo's account to relatives of another CFE official.

Comment

The convicted defendants face a penalty of up to five years in prison and a fine of the greater of $250,000 or twice the value gained or lost on the Foreign Corrupt Practices Act conspiracy charge. Each of the five Foreign Corrupt Practices Act counts carries a penalty of up to five years in prison and a fine of the greater of $100,000 or twice the value gained or lost. The money laundering conspiracy count carries a penalty of up to 20 years in prison and a fine of the greater of $500,000 or twice the value of the property involved in the transaction. In addition, the government is seeking forfeiture against all of the defendants. Sentencing for Lindsey Manufacturing and Lindsey and Lee is scheduled for September 16 2011, while sentencing for Mrs Aguilar is scheduled for August 12 2011.

Before trial, the defendants challenged the Department of Justice's definition of 'foreign official' under the Foreign Corrupt Practices Act; however, the court upheld the department's definition, finding that CFE was an "instrumentality" of the Mexican government.(2) Therefore, the CFE officer who allegedly accepted the bribes was a "foreign official" for Foreign Corrupt Practices Act purposes.

In its press release regarding the convictions, the Department of Justice quoted Assistant Attorney General Lanny Breuer as saying:

"Lindsey Manufacturing is the first company to be tried and convicted on Foreign Corrupt Practices Act violations, but it will not be the last... As this prosecution shows, we are fiercely committed to bringing to justice all the players in these bribery schemes – the executives who conceive of the criminal plans, the people they use to pay the bribes, and the companies that knowingly allow these schemes to flourish."(3)

Several points from the verdicts are noteworthy:

• The Department of Justice will continue to pursue Foreign Corrupt Practices Act enforcement aggressively against companies and individuals – and currently plans to do so under a broad definition of 'foreign official'.(4)
• Coupled with the department's aggressive pursuit of Foreign Corrupt Practices Act enforcement, the speed with which the jury convicted the defendants is also noteworthy.
• Although historically there have been relatively few enforcement actions leading to trial, this case confirms that the department can prevail at trial against both companies and individuals.
• Multiple theories of potential liability will be pursued by the enforcement authorities in Foreign Corrupt Practices Act enforcement actions; here, violation of the Foreign Corrupt Practices Act, conspiracy to violate the Foreign Corrupt Practices Act and conspiracy to money launder were theories on which the government prevailed.
• The department acknowledged in its press release the assistance that it received from the Mexican authorities during the investigation, marking another continuing enforcement trend of increased international enforcement cooperation.

Given the continuing upswing in aggressive enforcement, companies subject to the Foreign Corrupt Practices Act must ensure that they and their employees, agents, consultants or other third-party representatives take steps to comply with the Foreign Corrupt Practices Act.(5) Those steps include:

• assessing the company's international business reach and environment and establishing a robust risk-based compliance programme;
• conducting due diligence on third parties and subsidiaries;
• training company personnel and third parties to understand anti-corruption obligations and identify red flags; and
• ensuring transparency and accuracy when recording financial transactions.

As US Attorney André Birotte remarked in connection with the convictions, the Department of Justice:

"remains committed to prosecuting violations of the Foreign Corrupt Practices Act to ensure that the payment of bribes can no longer be viewed simply as the cost of doing business in a foreign nation. Bribery, wherever it occurs, will carry the potential cost of criminal prosecution, hefty fines and prison terms."(6)

For further information on this topic please contact Marsha Z Gerber, Richard Craig Smith or Paul Simonat Fulbright & Jaworski LLP by telephone (+1 202 662 0200), fax (+1 202 662 4643) or email (mgerber@fulbright.com, rcsmith@fulbright.com or psimon@fulbright.com).

Endnotes

(1) Mr Aguilar has also been charged with conspiracy to violate the Foreign Corrupt Practices Act, violations of the Foreign Corrupt Practices Act and money laundering. Mr Aguilar remains a fugitive and is presumed innocent unless and until proven guilty.

(2) For an analysis of the court's ruling on the definition of 'foreign official' please see "California court retains government's broad interpretation of 'foreign official'".

(3) Department of Justice press release, May 10 2011, "California Company, Its Two Executives and Intermediary Convicted by Federal Jury in Los Angeles on All Counts for Their Involvement in Scheme to Bribe Officials at State-Owned Electrical Utility in Mexico," available atwww.justice.gov/opa/pr/2011/May/11-crm-596.html

(4) The definition of 'foreign official' under the Foreign Corrupt Practices Act has also been challenged in two other current cases – see US v O'Shea (No 4:09-cr-00629 (SD Tex)) and US v Carson (No 8:09-cr-00077 (CD Ca)). Those courts have yet to rule on the pending motions.

(5) Companies with operations providing a nexus to the United Kingdom must equally ensure compliance with the UK Bribery Act of 2010, which will come into force on July 1 2011.

(6) Supra note 3.

Pondering section 27 Integrity in Public Life Act 2000 (as amended) of Trinidad and Tobago

The Hon. Prime Minister, Kamla Persad Bissessar

From the first time I heard that the Hon. PM's "free lodging" at the Gopaul's was being interpreted as a "fee, gift or personal benefit" under section 27 (1) of the Integrity in Public Life Act 2000 as amended, I intuitively thought it an uncomfortable interpretation but I could not put my finger on exactly why it was so.  It was certainly a benefit received and so I understand the readiness to conclude that it must be covered under the section dealing with the prohibition and declaration of gifts by public officials. I held my tongue on the topic ( even though as most of you know I am most inclined to comment on topics of this sort) and pondered a little.  Why was I uncomfortable with this interpretation?  Why did it seem like forcing a square peg into a round hole to me?  

Let us look at section 27 closely :

"27. (1) A person to whom this Part applies shall not accept a fee, gift or personal benefit, except compensation authorized by law, that is connected directly or indirectly with the performance of the duties of his office.

         (2) Subsection (1) does not apply to a gift or personal benefit that is received as an incident of the protocol or social obligations that normally accompany the responsibilities of office.

          (3) Where a gift or personal benefit referred to in subsection (2) exceeds five thousand dollars in value or where the total value received directly or indirectly from one source in any twelve-month period exceeds five thousand dollars, a person in public life shall file with his declaration, a statement indicating the nature of the gift or benefit, its source and the circumstances under which it was given or accepted.

           (4) For the purposes of this section, the amount of a gift comprising property, other than money, shall be deemed to be an amount equal to the value of the property.”

If we were to look at 27 it would appear that there is not there created an absolute bar to the receipt of any gift whatsoever.  Further from a consideration of the section in its entirety it is clear that there are distinctions made between categories of gifts etc.  Let us break it down.  From my reading of it there are at least four potential categories of gifts :

Gift Category 1

Defined by section 27 (1) - those fees, gifts, personal benefits, not authorized by law, that are connected directly or indirectly with the performance of one's duties of office. -Prohibited

Gift Category 2

Defined by section 27 (2) - those gifts/benefits received as an incident of the protocol or social obligations that normally accompany the responsibilities of office (under the value of 5000TT) - Permitted

Gift Category 3

Defined by section 27 (3) - those gifts/benefits received as an incident of the protocol or social obligations that normally accompany the responsibilities of office (over the value of 5000TT) - To be declared

Gift Category 4

Not defined by the section but nonetheless must exist - those fees, gifts, personal benefits received by public officials which are NOT connected directly or indirectly with the performance of one' duties of office. - Not Covered by the Act

It is of course category 4 which causes the most concern but given the manner in which the section 27 is drafted - it must exist.  Section 27 (1) breaks down the elements which one must find in the type of fee, gift or benefit which is prohibited eg. 

1. Must be a Fee, gift or personal benefit

2. Must not be authorized by the law (wages, salaries, benefits or perks of office)

3. Must be connected directly or indirectly to the performance of one's duties of office. 

The Gift of Free Lodging 

In the instant situation relating to the benefit of "free lodging", whilst elements 1 and 2 are made out, it is questionable whether element 3 is made out. There are two sub elements to 3 which are (a) must be connected directly or indirectly and (b) to the performance of one's duties of office. 

Taking the latter sub element first, the reference in s.27(1) (as amended) to “the duties of office” would seem to be a reference to public duties, ie duties which are an incident of the holding of a public office. Section 23 provides that Part IV of the Act applies to “a person in public life and to all persons exercising public functions”. Such persons are defined in section 2 and include all persons holding office under the Public Service. “Public functions” is a term not defined in the Act but “persons exercising public functions” is defined in s.2 to include, inter alia, the Judicial, Police and Teaching services.  Sections 24 to 27 are concerned with the use and misuse of office. This must, ex hypothesi, mean ‘public’ office. Similarly, the reference in s.24(1) to the performance of functions must be a reference to ‘public’ functions.

S.24(1)(a) makes express reference to the exercise of “public duty”. The term is not defined. However, it must necessarily encompass duties which are an incident of the public office and, possibly, which are owed to the public. A public duty may, in principle, be distinct from a ‘private’ duty, which may, eg, include those duties arising by way of contract of employment.

Accordingly, holding a public office may, in principle, give rise to both public and private duties. So a teacher’s duties might include, eg, one to mark exam papers impartially which could properly be characterized as a public duty; and a duty to work the hours stipulated in her contract, which is perhaps more readily categorized as a private duty. 

If this public/private distinction is in principle valid, then one can interpret s.27(1) as being concerned with matters “connected directly or indirectly with the performance of the [public] duties of his office”.

Leaving aside, for one moment, the meaning of “connected directly or indirectly”, one can interpret s.27(1) as, therefore, being concerned with the relationship between the acceptance of a fee, gift or personal benefit and the performance of a public duty which is an incident of the holding of a public office.

Considering the first sub element (a) “Connected” is defined in Collins English Dictionary as meaning “joined or linked together”. Using this definition, the term is suggestive of there being a link or relationship between said acceptance and said performance. That is to say that the acceptance of the benefit (and presumably also its offering) is referable to the performance of the public duty, or is linked to the performance of the public duty. 

It can be seen that s.27 distinguishes between benefits connected directly or indirectly with the performance of the duties of office (s.27(1)) and benefits “received as an incident of the protocol or social obligations that normally accompany the responsibilities of office” (s.27(2)). As explained above, this is not an exhaustive characterization of all benefits that a holder of public office could receive. Thus, by way of example, a birthday present from a family member would not fall under either category of benefit identified in s.27(1) or (2). The gift does not fall within s.27(1) because it is not connected with the performance of the duties of office. It does not fall within s.27(2) because it was not received as an incident of the protocol or social obligations that normally accompany the responsibilities of office, and therefore would not fall within s.27(3) either, even if its value exceeded TT5,000. Let us refer to this type of gift/benefit as the Category 4 gift outlined above. 

Similarly, the gift of free lodging from a friend without any evidence of a "connection directly or indirectly" with the performance of a public duty (for example the public duty to award a contract fairly and impartially) would not therefore appear to infringe section 27 (1). It would also not infringe section 27 (2) as it is not a gift given as an incident of protocol or social obligation accompanying the office and neither is it declarable under section 27 (3). 

On the above interpretation of the Act, it follows that, the mere fact that a fee, gift or benefit may be convenient to the performance of a public duty does not by itself establish the connectivity required by section 27(1).  

A Note on the Integrity in Public Life Act

Ok so I understand the discomfort with this.. it may be readily accepted that the Act is not the best example of parliamentary draftsmanship. Party financiers who are friends can give gifts of value and once no evidence can be adduced showing a connection with the performance of a public duty there is no infringement.  I am uncertain whether this was the intention of the framers. Perhaps a simpler expression of the rules would be 

1. Create an absolute bar on all gifts received in connection with the performance of duties of office (as is done by section 27 (1) as amended). 

2. However, require full disclosure of ALL gifts received over the value of 5000TT so that in the event of an allegation being made there should be appropriate records to assist with the investigation.  Our section 27 (3) requires only the declaration of gifts over 5000TT which are received as an incident of protocol or social obligation relating to the public office, thereby creating a fairly large loophole relative to Category 4 gifts. 

A Note on the NP Procurement Process 

All of this to say, I am not defending the NP procurement process nor am I saying that the Hon. PM did or did not interfere and or influence the process.  All I am saying, is

(1) the mere fact of the acceptance of the gift/benefit of free lodging by the Hon. PM  does not of itself establish a breach of section 27 (1) and

(2) the award by an SOE of a contract to the donor of the said gift/benefit of free lodging,  is not, without more, sufficient to support an allegation of impropriety.  

This notwithstanding, there may be evidence which is adduced later on pointing to unfairness of procedure, breaches of duties to award the contract as tendered, to disqualify non compliant bids etc, and there may even be evidence elicited relating to political interference and influence over the award.   In such circumstances, it may be that the Hon.PM or other public officials may have a case to answer.  

New Anti-Corruption Compliance Checklist issued by TI Canada

Transparency International Canada (TI-Canada) today announced the launch of its Anti-Corruption Compliance Checklist (TI-Canada ACC).

In line with Canada’s Corruption of Foreign Public Officials Act (CFPOA), the TI-Canada ACC is a critical tool for those Canadian corporations seeking to significantly enhance their risk management processes.

Implementation of the TI-Canada ACC will enable a Canadian corporation of any size to conduct itself in international markets in compliance with ethical and legal obligations to avoid corruption and operate with transparency, accountability and integrity.

As the Canadian chapter of TI, the global coalition leading the fight against corruption, TI-Canada’s mandate is to promote methods to eradicate corruption in Canada, and via education to help Canadian companies address and avoid corruption in their international business activities.

The recent revelation from the RCMP Sensitive Investigations and International Anti-Corruption Unit that 23 CFPOA investigations are underway means that, “Canadian companies can no longer hide behind the world’s perception that business is done here in a completely ethical manner. Companies must learn to operate internationally without paying bribes,” according to James M. Klotz, Chair and President of TI-Canada. The TI-Canada ACC, available for free download from www.transparency.ca, is a solid tool for Canadian corporations faced with the challenges of operating ethically in today’s global environment.