No Press Release from SEC about Ball Corporation FCPA Settlement
24 Corporate Crime Reporter 15, April 5, 2011

You have to wonder.

Why no press release?

The Foreign Corrupt Practices Act (FCPA) is the hottest practice area in corporate crime enforcement.

Big corporations are terrified by it.

In many areas of the world, big corporations just can’t do business without paying bribes.

But the FCPA says – if you are an American corporation, and you pay bribes anywhere in the world, you will be prosecuted in the United States.

There are all levels of enforcement.

But the thing that big corporations fear most is the adverse publicity.

No corporation wants to be known as a corporate criminal.

Or as a corrupt corporation.

Or as a corrupting corporation.

Or as a corrupt corporate criminal.

So, if you are a major corporation – especially if you are a major consumer products corporation – you want to try to minimize the publicity.

There are many ways to do this.

One way is to get the government not to bring a criminal FCPA case.

If they must bring a criminal case, then you try to get the government to bring a deferred prosecution – criminal charges are filed – but dropped after a year.

No criminal record.

Or better yet, you can try to convince the government to bring a civil case instead of a criminal case.

Or even better yet, an administrative action instead of a civil case.

A really good deal is to convince the government to bring an administrative action and to settle it quietly.

No press release.

Just bury the administrative action on a government web site.

This is apparently what happened last month when the Securities and Exchange Commission brought an FCPA enforcement action against Ball Corporation.

Yes that Ball Corporation.

The glass canning jar company.

But Ball is much more than that.

It’s also a defense contractor.

It has 14,000 employees.

It had $7 billion in sales last year.

And so you have to ask yourself.

Do you want to can your peaches in glass jars made by a defense contracting company that pays bribes overseas?

Maybe not.

So, what is a Ball Corporation to do if it is caught paying bribes overseas?

Minimize the publicity.

And last month, Ball Corporation got its wish.

Minimal publicity.

A really good deal for Ball – given the circumstances.

It turns out that Ball Corporation, through a subsidiary, paid ten bribes in 2006 and 2007 totaling more than $100,000 to the government of Argentina “to secure the importation of prohibited used machinery and the exportation of raw materials at reduced tariffs.”

The US government investigated and decided – no criminal prosecution.

No deferred prosecution.

No civil action.

Just a minor administrative action for violating the SEC’s books and records provision.

Ball Corporation neither admitted nor denied violating the law.

But agreed to pay a slap on the wrist $300,000 penalty.

The SEC said that the penalty wasn’t higher because the company cooperated with the SEC in its investigation.

As for publicity, the SEC posted the administrative settlement on its web site.

But didn’t issue a press release.

Why not?

During the settlement negotiations, did the SEC and the company talk about whether or not a press release would be issued?

We asked the SEC’s John Nester.

Nester declined to comment.

We asked Charles Smith, a partner at Skadden Arps in Chicago, who represented Ball Corporation in the matter.

Smith declined to comment.

But Mike Koehler, a professor of business law at Butler University who writes the FCPA Professor blog, also wants to know why no press release was issued.

“The enforcement agencies seemingly take every available opportunity to talk about their FCPA enforcement programs, including enforcement actions,” Koehler told Corporate Crime Reporter. “Thus, when an enforcement agency does not issue a release as to particular enforcement action, it is unusual and legitimately causes one to ask why? Why didn’t the SEC issue a release in the Ball enforcement action? Was it because this was a minor case resulting in ‘only’ a $300,000 civil penalty? Was it a condition of settlement? Was it simply an oversight? Inquiring minds want to know.”

“An answer that this was merely an administrative cease and desist action would seem not to be the case. The SEC frequently issues press releases as to administrative cease and desist matters – for example the recently in connection with the insider trading charges against Rajat Gupta and in the past as to administrative FCPA enforcement actions such as Royal Dutch Shell and Natco Group.”

Inquiring minds want to know.



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