Beer maker Anheuser-Busch InBev (ABI) recently paid $6 million to the government to settle charges it violated the Foreign Corrupt Practices Act and shut down a whistleblower. Houston independent lawyer and consultant Thomas Fox, who operates the FCPA Compliance Report website, had these observations:

This matter has all the ingredients one needs to tell a tale over a ‘cold one.’ The company got into trouble for a joint venture in India where that operation allegedly paid bribes to government officials literally to keep the lights on and the beer brewing after hours, violating local regulations. The company also was accused of paying bribes to make sales. And there also was destruction of evidence and company lawyers involved in other shenanigans. There was a whistleblowing employee who first alerted ABI officials about what was going on, but who the company believed was muzzled by a non-disclosure agreement, one the government says was illegal. Given the nefarious conduct, ABI is lucky there were no criminal penalties levied – at least none yet. What’s remarkable is that ABI apparently allowed the illegal payments to continue in the joint venture, even after a whistleblower brought forward information. The company audited the Indian unit and found deficiencies in its internal controls and failures to follow the FCPA policy. But even after that, ABI allowed these violations to continue. This enforcement action drives home several points. First, companies must take their FCPA and Dodd-Frank obligations seriously as they apply to foreign joint ventures. This case also demonstrates that bribes paid for routine regulatory matters can get companies in as much trouble as paying bribes to makes sales. Not only did ABI put forward a less than rigorous audit, it did not follow through to correct things. Next, there’s the role of in-house counsel. The SEC specifically called out these lawyers for attending meetings where document hiding and destruction were discussed. Someone in the legal department had to have drafted or at least approved the illegal language of the employee/whistleblower’s separation agreement. I hope that ABI is brewing up some stronger legal ethics and FCPA training for its in-house counsel.