The global consulting giant paid millions of dollars to secure lucrative contracts
In a case that highlights the ongoing issue of corruption in Africa and the importance of mitigating bribery risks, Boston Consulting Group (BCG) admitted that some of the US consultant company’s employees bribed officials in Angola in exchange for business.
The firm avoided prosecution by reaching a deal with the US Department of Justice that involved the US consulting company forfeiting over $14 million in profits.
What happened?
From 2011 to 2017, BCG employees paid its agent in Angola $4.3 million in commissions to secure government contracts. According to the DoJ, “BCG agreed to pay the agent 20 to 35% of the value of any government contracts procured and sent the funds to the agent’s three different offshore entities.”
The funds were funnelled through BCG’s Lisbon, Portugal office. When internal questions arose about the funds, BCG employees in Lisbon concealed the nature of the agent’s work by backdating contracts and falsifying what the agent did.
Over the course of those six years, BCG secured 11 contracts with the Angolan Ministry of Economy and one with the National Bank of Angola. BCG profits on these deals were about $14 million.
Self disclosure saves the company from prosecution
The company managed to avoid prosecution by self disclosing, cooperating and improving its compliance processes. BCG stated that “upon discovery of [employees paying to secure business] BCG promptly self-disclosed the matter to the DOJ.” It also fired the employees involved and closed the Angola office.
BCG stated that it made investments in its risk and compliance functions. These include:
- Reinforcing BCG’s culture: providing regular and targeted mandatory trainings and communications on our purpose, values, Code of Conduct, and Ombudsperson channels, which promote a speak up culture
- Enhancing our policies, processes, and controls: strengthening internal controls relating to anti-bribery and corruption due diligence and management of third-party relationships
- Scaling our Risk & Compliance function: adding professionals and embedding a global network of risk & compliance focused Managing Directors and Partners
- Improving our systems and technology: setting up digital solutions to drive data-driven risk & compliance decisions, monitoring, and testing
Significantly, the DoJ noted that its agreement with BCG does not provide protection against prosecution of any individuals, regardless of their affiliation with BCG. “If the government learns information that changes its assessment of any of the factors outlined above, it may reopen its inquiry,” the DoJ noted.
This case highlights the issue of multinational companies, corruption in Africa and its impact on the lack of investment and economic growth in some of the world’s poorest countries. It also shines a light on the importance of mitigating the very real risk of bribery in companies doing business in these areas.
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