“Mexico is an extremely important player in the world economy. With respect to the United States alone, Mexico is its third largest goods trading partner,” TRACE President Alexandra Wrage said. “Knowing the pressure points of doing business in Mexico is a critical first step in tailoring an effective anti-bribery compliance program. The BRIBEline Mexico Report gives concrete information about the people who are requesting bribes in Mexico, how frequently such requests are made and what the bribe seekers hope to achieve.”

The largest percentage of overall bribe solicitations, 45 percent, comes from the police, according to the BRIBEline study. Bribe demands from federal officials come in at 12 percent overall.

“The BRIBEline Mexico results present two compliance challenges,” Wrage said. “First, frequent demands for small amounts of cash are very difficult to track and properly record on a company’s books and records. Second, training employees and third party agents who are conducting business in Mexico to properly respond to extortionate demands for cash, which are often made by a police officer, is no easy task either.”

The full BRIBEline report is available at www.bribeline.org.

Today’s financial crisis allows the opportunity for many research based organizations to publish studies on just that. One such study, conducted by Transparency International in January, discovered that as the economy sinks, the amount of corruption in the business world goes up.

As Jermyn Brooks, a Director at TI, put it, “For the business world, when the economic parameters get tight there is a much stronger temptation to focus on survival … regardless of what that means in terms of perhaps cutting corners.”

He suggests that business leaders are more concerned about job cuts than preventing bribes in time like this. So what should companies to do? Ensure that you have up-to-date compliance and anti-corruption systems, Brooks says.

If there is a lesson to be learned from the recession we find ourselves in, it’s that now, more than ever, companies need to focus on their compliance systems and reinforce ethical culture, rather than shy away from them for budgetary reasons.

A portion of the money comes from Siemens Bangladesh, which admitted in December 2008 that it paid over $5 million in bribes to Bangladeshi officials over the period of May 2001 to August 2006. In return for the bribes, Siemens asked for favorable treatment during the bidding process of a mobile telephone project, according to a press release from the DOJ. Most of the money reportedly went to the former prime minister of Bangladesh’s son, Arafat “Koko” Rahman.

This story emphasizes how the Department of Justice continues to expand the international applications of the FCPA. This action certainly tops the punishment that the former French Alcatel executive received last year when the DOJ found that he was in violation of the FCPA after bribing authorities in Costa Rica. This is a good way to keep international companies on their toes as international law slowly works on catching up with the FCPA. Simply put, if you want to compete internationally, don’t bribe.

Christian Sapsizian, a French citizen and former executive of Alcatel, was sentenced to three years in prison, three years of supervised release and ordered to forfeit $261,500 after admitting that he paid over $2.5 million in bribes to officials in Costa Rica between February 2000 and September 2004.

The money was given to an official of the state run telecommunications authority in Costa Rica, who then shared the money with a “senior government official.” Those two then used their influence to allegedly create a favorable bidding process for Alcatel. During the period that the bribery took place, Alcatel was awarded a $149 million mobile telephone contract by the Costa Rican government.

According to the website Deutsche Welle, Germany and the United States top TI’s list as leading the fight against corruption. One expert told the site that those two countries are “at the forefront in applying an OECD [Organization for Economic Cooperation and Development] anti-corruption convention.”

The website also noted Germany’s pursuit of Siemens as proof of the country’s proactive anti-corruption habits. You can read more about the Siemens’ case here.

And, on the other end of the spectrum, the article reminds readers who may be surprised to see the UK on the bottom of the list that the BAE debacle is still raging on…

The Securities and Exchange Commission alleged in the fall of 2007 that Willbros Group paid over $6.3 million to Nigerian government officials between 2003 and 2005 in order to earn a $387 million government contract, according to news reports. The SEC also alleged that a number of Willbros employees participated in a tax evasion scheme in Bolivia.

The Department of Justice agreed to defer prosecution of Willbros for three years, pending the company’s cooperation with its investigation. If Willbros maintains a strong FCPA compliance program and hires an independent monitor, among other conditions, the DOJ will drop the charges.

It is almost unheard of for a person to sue his business partners for alleged FCPA violations – or any kind of violations for that matter – in order to not be implicated himself. As the FCPA blog points out, previous precedent was set when Alba sued Alcoa over alleged Bahrain bribery. The 76-year-old Grynberg says he had no knowledge of the alleged bribes and hopes to avoid DOJ prosecution by filing suit against the defendants. As he put it, “Unless I assert that I was an unwilling participant in this, my neck could be on the line. I’m too old to go to prison.”

This lawsuit comes only a couple weeks after Grynberg sued BP and Lord Browne for alleged bribery in Grenada. In fact, the Telegraph says Grynberg has brought over “73 separate lawsuits against rivals in his industry. Mr. Grynberg admits that he is litigious, but claims that he has a 98 percent success rate in court actions.”

Whether or not this subterfuge will keep Grynberg out of prison remains to be seen, but we do know he’ll be spending quite a bit of his remaining years in court.

Either investigative techniques used to uncover FCPA violations are improving, more companies are doing it or it’s just getting more attention from the DOJ. But whatever the reason, FCPA cases are a dime a dozen these days. The most recent alleged violator: Shell Oil. The company is being looked into by the Department of Justice and has also announced its own internal investigation. The company says it is cooperating fully and acknowledged that it may have to pay “fines and additional costs,” according to its most recent annual report.

Generally violations come from smaller company subsidiaries and, of course, this instance is no different. Shell’s “basel-based logistics firm” Panalpina is the culprit this time. Panalpina has allegedly bribed officials in Nigeria, Kazakhstan and Saudi Arabia, however since the investigation began the firm has ended operations in Nigeria.

The take-home message? Yes, your subsidiaries can get you in a heap of trouble. Don’t limit your compliance and code of conduct training to your primary business. It’s just as important to make sure that all the small little offices working for you in the most obscure parts of the world are following protocol as well. If not, your company name could very quickly be next to the words “FCPA” and “Violations” in next week’s headlines (and judging by the rate FCPA violations are being investigated, there will likely be another one next week, if not sooner).

The SEC filing can be found here, however, if you don’t want to wade through that entire document, the relevant paragraph says:

In 2007 the Company disclosed that the U.S. Securities and Exchange Commission has made an informal inquiry of the Company regarding possible violations of the Foreign Corrupt Practices Act in connection with the sale of medical devices in certain foreign countries. Subsequently, in 2008, the Company received a subpoena from the U.S. Department of Justice, Criminal Division, requesting certain documents for the period January 1, 2000 through the present in connection with the U.S. Securities and Exchange Commission inquiry. In 2006 the Company announced that it received a subpoena from the U.S. Department of Justice, Antitrust Division, requesting documents for the period January 2001 through the present regarding possible violations of federal criminal law, including possible violation of the antitrust laws, relating to the manufacture and sale of orthopaedic implant devices. Stryker is fully cooperating with the U.S. Department of Justice and the U.S. Securities and Exchange Commission regarding these matters.

Stryker came under DOJ scrutiny earlier for unusual payments “involving consulting contracts, trips and gifts to U.S. doctors.” And, just to add a little more drama to the story, Stryker was prosecuted for the unusual payments by U.S. Attorney Christopher Christie. You may recall Christie’s own little 15 minutes of fame in January after it was discovered he gave a no-bid contract to monitor a settlement between Zimmerman Holdings and the DOJ to his former boss, John Ashcroft.

As for Stryker’s possible FCPA violations, it remains to be seen what, if anything, will stem from the DOJ investigation.

Experts say that it is highly unusual for a foreign-owned company to file suit in a U.S. federal court. Although this brings down the wrath of the Justice Department on Alcoa, it also opens Alba up for further scrutiny. According to the Wall Street Journal:

The reason it’s rare for governments to accuse U.S. companies of corruption in American courts, said attorney Dan Newcomb of Shearman & Sterling, is that “once you raise a question of corruption, the sovereign runs the risk they will be embarrassed by the requests of discovery from the private party.” In this case, he added, “They have to be prepared to withstand Alcoa coming back to them and saying, ‘We want to look at every other corrupt transaction you have been involved in.’ ” Mr. Newcomb called Bahrain’s move an indication of the level of concern in the region that oil wealth will be lost to fraud and waste.

A law professor gave a similar opinion to Bloomberg media, arguing that this case will likely be settled out of court for the best interest of both parties:

“It’s unusual for another country to come into a U.S. federal court to pursue a U.S. private company,” said Carl Tobias, a law professor at the University of Richmond in Virginia. “When you subject yourself to the U.S. court system there could be discoveries that are embarrassing to the plaintiff. It’s hard to imagine this going to trial. A settlement could be worth it to both sides not to have a public dispute.”

Because of Flowserve’s “thorough review of the improper payments and the company’s implementation of enhanced compliance policies and procedures” the DOJ will delay prosecuting the company for three years, according to a DOJ press release. If Flowserve and its subsidiaries play nice during that time, the DOJ “will dismiss the Criminal Information.”

The penalty wasn’t a surprise for the company (it had predicted a fine of $11 million in its 2007 third quarter report with the SEC), and stock value hasn’t responded to the report. In fact, the day of the announcement, Flowserve shares closed 12 cents higher than it opened.

As a point of reference, Lahmeyere has received over $15 million in Bank contracts over the past four years. Bank Information Center has a good recap of the story along with a handful of links to additional resources here.

Siemens has been accused of bribing officials and executives across the planet, in countries from Italy to Nigeria to Saddam Hussein’s regime in Iraq. Employees not in the upper echelons of management were given immunity from prosecution in exchange for speaking out, but many experts don’t think that will improve the enormous morale problems that the company now faces. One German banker, quoted in the UK’s Financial Times and familiar with Siemens, has gone so far as to suggest the company may “implode” from the management loss that will occur pending results of the investigation.

The trips typically lasted 14 days and cost between $25,000 and $55,000 each. The money came out of Lucent’s sales department and was falsely documented as “factory inspection” or “training” trips, but little to no time was actually spent in either regard. Although by 2001 Lucent had outsourced the vast majority of its work and had no factories for customers to tour, the company still paid for factory tours across the world to countries such as the United States, Europe, Japan, Australia, Canada, etc.

The Justice Department will not prosecute Lucent should the company agree to all the terms of the agreement. This includes the aforementioned fine, as well as adding stronger internal controls, maintain fair and accurate books and records, implement a new FCPA compliance program and, most importantly, stop bribing customers. In a separate but related settlement with the SEC, Lucent agreed to pay $1.5 million but neither admitted nor denied guilt. These decisions come from alleged violations committed before Alcatel bought out Lucent in 2006.

Juthamas was running for a seat in parliament before all this was discovered, but withdrew from the race yesterday. She denies knowing anything about the bribes and says she only stepped down to save her political party from any associated fallout. She says if the U.S. Department of Justice finds her guilty of accepting the bribes, she will counter-sue, as she calls it “a case of mudslinging and a groundless accusation.”

Mr. Green, who produced “Rescue Dawn,” was arrested in the Los Angeles International Airport after arriving home on a flight from Thailand. He posted $500,000 bond and was released. His wife was arrested in Los Angeles as well, though it’s not immediately clear if she was arrested with her husband at the airport as well. She posted a $200,000 bond.

Smith & Nephew, a British company that makes artificial hips and knees, along with Biomet, Medtronic, Stryker and Zimmer, got a crash course reminder after the SEC announced a new investigation into whether or not the companies bribed European doctors to prescribe their products to orthopedic and spinal surgery patients.

Apparently, this is all part of a growing trend. According to a new survey, U.S. regulatory agencies (particularly the SEC) have been stepping up investigations into British businesses, adding new expenses and stress for companies on the other side of the Atlantic.

This news comes in the wake of a $311 million settlement by the “medical device industry” in September for similar allegations.

The U.S. Department of Justice (DOJ) alleged that York employees paid $675,000 to the prewar Iraqi government in exchange for contracts to supply air conditioning devices to government buildings.

The DOJ also accused York of bribing officials in Bahrain, Egypt, India, Turkey and the United Arab Emirates over six years starting in 1999.

In addition to the financial penalty, the agreement also states “York admits, accepts and acknowledges that it is responsible for the acts of its officers, employees and its wholly owned subsidiaries, YAZR and FZE.”

The Department of Justice agreed not to press charges provided Paradigm complied with its obligations in the agreement. This includes ongoing cooperation with the DOJ, adopting rigorous internal controls and other remedial steps, retention of their outside compliance counsel and paying a $1 million fine.

Assistant Attorney General Fisher had this to say:

“Paradigm’s actions in this matter, including voluntary disclosure and remedial efforts, are consistent with our view of responsible corporate conduct when FCPA violations are uncovered. Accordingly, the Department has resolved this case to permit the company to move forward on sound footing, governed by ethical business practices.”

Paradigm discovered the violations through internal audits related to its initial public offering. The company is headquartered in The Netherlands but has used Houston as its principal place of business since 2005.

As report author Bob Gordon puts it:

“Corporate responsibility continues to evolve from what was a mainly philanthropic activity to a more mainstream approach where it is integrated into core business activities.”

The study compares businesses from different countries and ranks them in categories such as independence of directors, human rights issues and environmental responsibility.

Read the story from The Independent.

Commentary: A notable example of U.S. companies lagging behind their European counterparts is in environmental policy rankings (in terms of the percentage of businesses by country that have basic or advanced environmental policies in place). The United States ranks 17th overall. Japan and Canada are the only two non-European countries ahead of the U.S. on the list. Perhaps high-profile activists like Al Gore will help make improvements in this category, but documentaries about other subjects such as “Separation of Chairmen From CEOs” might not catch on quite as easily (a category where the United States ranks dead last).

The charges brought against Hauxwell-Smith and his co-defendants included conspiracy to defraud, corruption and witness intimidation.

Hauxwell-Smith paid the bribes in order for Ikea managers to overlook a company rule, which states that Ikea will not accept over 40 percent of the turnover of a single supplier. The judge presiding over the case warned the three defendants to expect jail time.

Three other defendants, one of which was Hauxwell-Smith’s wife, were named by the United Kingdom’s Serious Fraud Office, however the SFO announced that they would not be pursuing charges against them at this time.

Read the story as presented in The Sun Online.

Commentary: It’s interesting to note that the press release issued by the Serious Fraud Office mentions that this case was brought up by an internal investigation on behalf of Ikea, not by an outside source or whistle-blower leaking information about the bribes to the media. Bravo, Ikea! Bringing the issue to light in this manner saves the company from dealing with negative publicity and other difficulties down the line.

The article in question, titled “The Family Firm”, alleged that Suharto and his family amassed a $73 billion fortune “from oil and mining, forestry, property, banking and petrochemicals, but lost much of it during the 1997 Asian financial crisis.” The article alleged that the family still had $15 billion in assets as of 1999.

The former dictator took power through a 1965 military coup that resulted in as many as half a million people dead. During his 31-year reign he regularly killed or imprisoned political dissenters.

A spokesman for Time says the magazine stands by its article.

Read more about the story here.

The study began in 2004 by the University of Southampton and tested the effect of specific additives on children aged 3-4 and 8-9 years old. One of the additives brought into question is known as sodium benzoate which is found in “soft drinks, jams and salad dressings.”

Check out Financial Times for the full article.

The Belgian Federation of Wine and Spirits, a member of the EFWSI, sent a separate letter to authorities stating that three companies, Saint-Gobain of France, Owens-Illinois of the U.S. and Ardagh Glass of Ireland control over 95% of the European glass bottle industry.

Read the complete story in CNN Money.

Government officials have said that the new rules will not differentiate between foreign or domestic companies.  However, China has not yet released the specific wording of the law.

State-run monopolies will still be legal among specific industries such as military-related manufacturing, petroleum and civil aviation. The American Chamber of Commerce in Beijing, consulted in drafting the legislation, praised the new law.

Read the article as posted in Forbes.

Speedy Hire is a relatively small company compared to most on the list, such as retailing superstore Marks & Spencer and Vodafone, the international mobile phone giant (Vodafone owns a 45% minority stake of Verizon Wireless in the U.S.).

The Observer points out that judging ethical standards is a subjective measure. However, they emphasize that companies without a “sustainable strategy” to deal with ethical risks will inevitably endure financial setbacks.

You can read the entire article as well as judge the list for yourself by heading over to The Observer.

Commentary: Although listed as the number 1 most ethical company in the UK, there’s no mention of the distinction on Speedy Hire’s ‘Awards & Recognition’ or ‘History’ sections of their website. This is compared to oilfield service company Expro, which made 19th on the list and displays the recognition clearly on their homepage (which has a very cool introductory video). It’s unclear whether Speedy Hire forgot to acknowledge the kudos altogether or decided to humbly continue with business as usual.