A&O Shearman FCPA Digest | United States v. General Cable Corporation (2016)

Source Documents

Foreign Official
Unnamed government officials in Angola, Bangladesh, China, Indonesia, and Thailand.

Nature of Business
General Cable Corporation is a Delaware corporation based in Kentucky that manufactures, distributes, and installs cable and wire. General Cable maintains operations around the world through various subsidiaries. General Cable’s shares are publicly traded on the New York Stock Exchange.

Influence to be Obtained
According to the DOJ, between 2002 and 2013, General Cable’s subsidiaries paid approximately $13 million to third-party agents and distributors who, in turn, allegedly used a portion of the funds to make unlawful payments to obtain business in Angola, Bangladesh, Indonesia, Thailand, and China. The DOJ claims that, in total, the alleged bribery schemes netted the company approximately $51 million in profits.

Furthermore, the DOJ claims that employees from General Cable’s subsidiaries expressed concerns to regional and parent-level executives that commission payments for third-party agents and distributors were being used for improper purposes, including bribery. Nevertheless, according to the DOJ, General Cable failed to implement and maintain a system of internal accounting controls designed to detect and prevent such corrupt and otherwise improper payments. As a result, the DOJ alleges that even after executives at General Cable became aware of the improper payments, they allowed the conduct to continue.

Enforcement
On December 29, 2016, the DOJ announced that it had resolved an FCPA enforcement action against General Cable. According to the non-prosecution agreement, General Cable would be required to pay a criminal penalty of $20,469,694.80. General Cable separately resolved an FCPA enforcement action by the SEC wherein the company agreed to pay a total sanction of approximately $55 million in disgorgement and prejudgment interest.