Foreign Corrupt Practices Act Case in Panama Rocks Business World
A Shocking Turn of Events
August 18, 1998 - Two subsidiaries of Saybolt International B.V., Saybolt North America Inc. and Saybolt Inc., have pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) in a case that has sent shockwaves through the business community.
The Investigation Unfolds
According to court documents, from 1994 to 1995, the companies conspired to make illegal payments to officials of the government of the Republic of Panama. The payments, totaling $50,000, were made to obtain contracts, reduce tax payments, and secure a prime location for operations near the Panama Canal.
Data Falsification Leads to Investigation
The investigation began after allegations of data falsification surfaced during an Environmental Protection Agency (EPA) inquiry. Prosecutors say that Saybolt North America Inc., Saybolt Inc., and their parent company, Saybolt International B.V., all based in the Netherlands, worked together to bribe Panamanian officials in exchange for favorable treatment.
Criminal Proceedings and Plea Agreements
In a landmark case, the US Department of Justice brought criminal proceedings against both companies, charging them with conspiracy to violate the FCPA and violation of its anti-bribery provisions. As part of their plea agreements:
- Saybolt North America Inc. agreed to pay a fine of $3,400,000 for data falsification violations.
- Saybolt Inc. and Saybolt North America Inc. were jointly and severally liable for a $1,500,000 fine for the bribery violations.
Implications for International Businesses
The case has significant implications for international businesses operating in Panama and beyond. The conviction of David H. Mead, President and CEO of Saybolt Inc., who was found guilty on all counts, serves as a stern warning to executives and companies alike: FCPA violations will not be tolerated, and those who engage in corrupt practices will face severe consequences.
International Cooperation and Whistleblower Protection
The case is a testament to the effectiveness of international cooperation in combating corruption and upholding the rule of law. It also highlights the importance of whistleblower protection and the role that whistleblowers can play in exposing illegal activities. As the business world continues to grapple with the implications of this case, one thing is clear: the fight against corruption will only intensify in the years ahead.