Seems all I get to post is Foreign Corrupt Practices Act news, but (aside from the regulatory woes of the banking system) the FCPA is the big news for companies outside of financial services.

Today the SEC announced $384 Million in fines against Alcoa, including a $209 Million CRIMINAL fine, for bribing Bahraini officials to get aluminum contracts with a government-operated plant.  The corrupt payments, totalling $110 Million, were made through a consultant to an Australian subsidiary. 

Although the SEC asserted that Alcoa failed to perform due diligence to confirm that these payments were proper, one has to wonder what a large company doing business internationally has to do in order properly to supervise the dealings of intermediaries.  It may well be that whenever you spend over a hundred million dollars you are obliged to go digging, but the case shows how vulnerable US companies are to the business practices of far-flung subs or agents.  The lesson is that a high level of discipline and inquiry, vertically through the organization, is essential; there is no way home office is going to be able to directly police or investigate the myriad transactions that take place daily outside the US.

FCPA applies to all US companies, not just large companies and not just public companies.  Anyone with overseas operations needs to tighten up controls and oversight —  no two ways about it!