In March, the US Department of Justice has slapped a USD88m fine on Japanese firm Marubeni for their involvement in a seven-year campaign to bribe high ranking 
Indonesian members of parliament and other public officials. The DOJ account of how the bribes were orchestrated sheds some light on the process. One of the most amusing elements of the case reveals how deep-seated bribery and corruption plays out in the meeting rooms of corporations, using specially drafted consultants to manage the deals and how officials react when they feel they are being short-changed.
The first ‘graft’ consultant was offered three per cent of the total deal in commission, for feeding the appropriate hands in parliament and at state-owned companies. The bribe-takers, in this case officials at the national power company, griped that their gifts might not be substantial enough to secure their favour and when word of their unhappiness reached the right ears, his commission was reduced to one per cent and a second ‘graft’ specialist was brought in to seal the deal. This is how bribes are made – no brown envelopes, nothing is under the counter. It is open, documented and built into the budget.
The DOJ used the extra-territorial provisions of the Foreign Corrupt Practices Act to target the firm. Marubeni pleaded guilty to eight charges – read the full DOJ report here
Repercussions
Repercussions for the firm extend far beyond the dollar fine. Marubeni is subject to investigation by the Federal Bureau of Investigations, and the presence of the agents alone around the US offices is enough to cause concern for future clients.
Damage to its reputation could have a significant effect on future business, allowing the competition to step in and win contracts based on the fact that they are not on the receiving end of a DOJ penalty and probe.
Last but by no means least, comes the remedial action the firm must take, as dictated by the terms of their plea agreement. This is the real meat for Governance, Risk and Compliance professionals.
Marubeni has agreed to maintain and implement an enhanced global anti-corruption compliance program and to cooperate with the department’s ongoing investigation. This will be a large cost to the firm. The agreement also highlights the apparent lack of an effective ‘compliance and ethics program’ as a factor in the final plea agreement.
Regrettably for Marubeni, all of its dirty dealings were recorded in emails which detail conversations between consultants and Marubeni, including percentages to be paid in commissions.
Two former executives have pleaded guilty to FCPA breaches and two more face charges.
A consortium of failures
Some of the failings noted in the DOJ final notice.
Two senior executives,, both in sales’ positions, have pleaded guilty to conspiracy to breach the FCPA.
Allegations of bribery were laid against two more executives in July 2013; by March 2014, these allegations were not proven.
According to court filings, Marubeni, its employees, and other parties paid bribes to officials in Indonesia for assistance in securing a USD118m contract, known as the Tarahan project. The contract was for Marubeni and its consortium partner to provide power-related services for the citizens of Indonesia.
The bribe-takers included a high-ranking member of the Indonesian Parliament, senior members of Perusahaan Listrik Negara (PLN), the state-owned and state-controlled electricity company.
The two consultants hired in connection with the Taharan project to provide legitimate consulting services were, according to the DOJ, taken on to pay bribes to Indonesian officials.
Does my bung look big in this?
E-mails between employees at the Marubeni subsidiary in Indonesia gave details of the bribery system and concerns or demands of the bribe takers.
Officials from the state power company expressed ‘concern’ about whether the agent 
would provide them with satisfactory ‘rewards’ or maybe her would ‘only give them pocket money and disappear.’ Clearly, the bent state-employees of Indonesia can see when their own warped integrity could be devalued. Comments that the agent has not shown he was ‘willing to spend money’ might even suggest that, radically, he was not prepared to offer enormous bribes.
Either way, he lost the gig. A mail sent by Marubeni employees stated the following: “unfortunately our agent almost did not execute his function at all, so far. In case we don’t take immediate action now now [sic], we don’t have any chance to get this project forever.”
The first graft consultant still got his one per cent commission, even though a second bribe expert was brought in to close the deal, on the remaining two per cent commission.
The report concludes with this comment:
“Marubeni and its co-conspirators were successful in securing the Tarahan project and subsequently made payments to the consultants for the purpose of bribing the Indonesian officials. Marubeni and its co-conspirators paid hundreds of thousands of dollars into the first consultant’s bank account in Maryland to be used to bribe the member of Parliament. The consultant then allegedly transferred the bribe money to a bank account in Indonesia for the benefit of the official.”
Financial Crime Asia 