France Smacks Down Second-Largest Bank to Become Key Bribery CopBy and
U.S., France agree on first coordinated bribery resolution
America ‘shouldn’t be world’s policeman,’ lawyer says
France just made its mark in the global fight against corruption, taking half of a $585 million fine from Societe Generale SA in the country’s first coordinated settlement of a bribery case with the U.S.
What’s most striking about the resolution, with its 50-50 split between the countries, is that it shows the U.S.’s desire to have France be part of the anti-bribery fight, said Laura N. Perkins, a lawyer with Hughes Hubbard & Reed in Washington.
“The Department of Justice recognizes that it can’t and shouldn’t be the world’s policeman,” Perkins, who supervised enforcement of Foreign Corrupt Practices Act cases when she worked for the department, said in a phone interview. "It is a welcome thing from the Justice Department’s perspective to have teammates.”
U.S. authorities haven’t been shy in fining foreign companies -- especially French ones. By contrast French regulators have been notoriously slow and ineffective in their pursuit of international corruption. The country even earned a rebuke from the Organisation for Economic Cooperation and Development.
On the back of recent legislative changes, France is stepping up its prosecution of international corruption with other big-ticket cases in the pipeline such as a probe into Airbus SE and an investigation into billionaire Vincent Bollore.
“If France does step up its game in the anti-corruption sphere that’s a huge deal because their companies have been some of the worst offenders,” said James Koukios, who was part of the Justice Department’s FCPA unit during the Obama administration and is now a partner at Morrison & Foerster in Washington. He cited in particular Alstom SA’s $772 million fine in 2015.
Monday’s case hinged on bribes Societe Generale -- France’s second-biggest bank -- paid through a broker to secure the investments from various Libyan state institutions, according to the bank’s admissions detailed in a DOJ statement. In total, SocGen paid the Libyan intermediary more than $90 million. As a result of the scheme, the bank obtained investments and one restructuring that earned it profits of approximately $523 million, the Justice Department said.
Acting Assistant Attorney General John Cronan said Monday the coordinated law enforcement resolution “sends a strong message.” French Financial Prosecutor Eliane Houlette called the SocGen settlement “a key event” and underlined that it’s the country’s first settlement “agreed in total cooperation with American authorities.”
Her country joins the restricted club of jurisdictions the U.S. has teamed up with on bribery settlements, including Brazil, Switzerland and the Netherlands. Rolls-Royce Holdings Plc agreed last year to pay about 670 million pounds ($894 million) to settle a British-American case.
The new trend in France stems from the creation, four years ago, of the DOJ’s counterpart in the SocGen case. Cases investigating financial misbehavior -- from tax fraud to corruption -- landed in the lap of this elite enforcer known as the Parquet National Financier and led by Houlette. Still, it was partly hamstrung by France’s legal system which made it difficult for companies to reach a resolution for corruption.
That changed in 2016 when legislation broadened prosecutors’ toolkit with a settlement procedure that includes a fine, but no admission of guilt. The law also created a standalone anti-corruption watchdog to force companies to set up compliance programs and focus on prevention.
Nicolas Tollet, who was involved as a lawyer in the U.S. bribery resolution for Alcatel-Lucent SA before becoming an in-house counsel at Technip SA, says it’s the dual focus on enforcement and prevention that puts France in a unique position going forward. The two put together mean France can now be counted as one of the major anti-corruption nations, said Tollet, who is now a lawyer with Hughes Hubbard & Reed in Paris.
“Foreign companies are keeping a much closer eye on what’s going on in France,” he said in a phone interview.
There are clear benefits for France to be involved on the enforcement side. In addition to keeping part of the money it also enables France to reclaim oversight over settlement terms.
The DOJ decided not to opt for a monitor in this case and SocGen is instead receiving oversight from France’s anti-corruption agency. “That’s huge from a sovereignty view point,” Koukios said.
— With assistance by Fabio Benedetti Valentini