The last year has been a bumper one for the fight against government bribery, from landmark legal victories to policy breakthroughs. Complex bribery schemes were uncovered and important officials prosecuted for their role in corruption. Gifts to officials and political corruption remains a rampant feature of bribery cases, with a significant risk for any business engaging with public officials. 

Corruption thrives in environments where oversight is weak, conflicts of interest are overlooked, and laws lack clarity or enforcement. While many countries will continue to have serious deficiencies in their anti-bribery laws and practices, businesses must ensure they do not knowingly engage in corrupt practices or use loopholes. If not, they could find themselves facing criminal investigations and multi-million dollar fines, which have happened in the last year.

The former president of Panama’s corruption conviction was upheld 

Former Panamanian president Ricardo Martinelli was disqualified from running in the country’s May 2024 presidential election following his conviction for money laundering. Panama’s electoral tribunal announced the decision, citing the constitutional prohibition against candidates sentenced to more than five years in prison. Martinelli, who served as president from 2009 to 2014, was found guilty in 2023 of laundering public funds to purchase a media conglomerate and received a 10-year, 8-month sentence. His appeal was quashed last month, solidifying the tribunal’s ruling.

Despite leading in the polls, the 71-year-old sought asylum in the Nicaraguan embassy in Panama City earlier this year, claiming threats to his safety. Nicaragua granted asylum and requested his safe passage, but Panamanian authorities denied the request. From the embassy, Martinelli has continued to maintain his innocence, dismissing the charges as politically motivated.

Following his disqualification, Martinelli’s vice-presidential running mate, José Raúl Mulino, replaced him on the ballot as the presidential candidate and won. Ricardo Martinelli, known for his populist policies and major infrastructure projects, is the first ex-president in Panama to be convicted of a crime. His legal troubles also extend internationally, with the U.S. previously barring him and his family from entry due to alleged involvement in significant corruption.

The Azerbaijani laundromat snares two German MPs in its web of corruption

VinciWorks has previously reported on the Azerbaijani laundromat, a multi-billion dollar money laundering scheme in which money was siphoned through European companies, corrupt financial institutions such as Danske Bank and high value properties to pay off Western politicians in order to obfuscate the country’s human rights abuses.

Former German parliamentarians Axel Fischer and Eduard Lintner of the centre-right CDU, once members of the Parliamentary Assembly of the Council of Europe (PACE), were at the centre of corruption allegations linked to the Azerbaijan Laundromat. The allegations revealed how Azerbaijan used lavish gifts, trips, and bribes—labelled “caviar diplomacy”—to sway European policymakers and soften criticism of its human rights abuses, including the imprisonment of political dissidents.

Fischer allegedly received €21,800 in 2016 for favourable votes, including on issues tied to the Armenia-Azerbaijan conflict in Nagorno-Karabakh. Lintner, whose companies received €3.4 million between 2012 and 2014, reportedly facilitated lobbying efforts and paid fellow PACE member Karin Strenz €22,000 through his lobbying firm. Strenz passed away in 2021, but prosecutors are pursuing confiscation of her alleged bribes. The scheme’s reach extended to 20 property raids in Germany and international investigations involving at least eight countries.

Pakistan wins the right to recover corrupt payments from businesses

The International Chamber of Commerce (ICC) upheld Pakistan’s jurisdiction in a legal dispute with Frontier Holdings Limited (FHL), a subsidiary of Jura Energy Corporation, over oil and gas exploration agreements. FHL, which had failed to meet its investment commitments under a Petroleum Concession Agreement, sought to reclaim its forfeited rights through international arbitration. However, the ICC Tribunal ruled that Pakistani law governs such agreements and dismissed FHL’s claims, directing the company to bear the $250,000 arbitration costs.

The ruling reinforces Pakistan’s legal sovereignty over arbitration agreements tied to PCAs and Joint Operating Agreements (JOAs) in its oil and gas sector. The Tribunal’s decision also affirmed the competence of the ICC court to proceed under Pakistani law while ultimately declaring it lacked jurisdiction over the specific dispute. This outcome underscores the importance of adherence to financial and contractual obligations, particularly in dealings with key industry players like the Oil and Gas Development Company Limited (OGDCL) and Mari Petroleum.

The dispute had escalated following intervention by Pakistan’s Ministry of Energy, which recovered Rs1.3 billion in receivables from Jura’s subsidiaries after a complaint from Transparency International. The ICC Tribunal’s 80-page judgment represents a significant milestone in Pakistan’s legal framework, enhancing its reputation as an investor-friendly jurisdiction committed to fair and transparent dispute resolution and a credible destination for foreign investment.

Global software giant SAP agrees to $235m bribery fine

SAP, the German-based software company, was charged with bribing government officials around the world and agreed to pay over $235m in one of the largest ever bribery settlements.

The company along with co-conspirators bribed South African and Indonesian foreign officials, providing cash, political contributions and wire transfers, along with luxury goods purchased during shopping trips. The goal was to obtain advantages for SAP in connection with various contracts with South African departments and agencies including Eskom Holdings Limited, a South African state-owned and state-controlled energy company.

The company also bribed government officials in Malawi, Kenya, Tanzania, Ghana, and Azerbaijan through third-party intermediaries and consultants it employed who paid bribes to obtain business with public sector customers in these countries.

Government officials from South Africa and Indonesia were sent on trips to New York, shopping excursions and dining and golf outings. In one instance, according to the US Securities and Exchange Commission (SEC), an executive at SAP’s Indonesian subsidiary paid bribes to officials in the country’s Maritime Affairs and Fisheries ministry. 

The company did not have effective oversight over its intermediaries and consultants. It did not implement adequate internal accounting controls over third party freelancers and lacked sufficient entity-level controls over its wholly owned subsidiaries. The company took steps to improve its compliance program. It increased its budget and restructured its compliance office to ensure its autonomy. SAP is also participating in a Justice Department pilot program.

Conflicts of interest and nepotism in Armenian local government procurement practices

Recent cases in Armenia have brought attention to potential conflicts of interest and nepotism in local government procurement practices. In Talin, Mayor Tavros Sapeyan faced scrutiny for awarding contracts to “Sapeyan Brothers,” a company owned by his family. Despite being fined 300,000 drams in 2023 by the Corruption Prevention Commission (CPC) for failing to disclose conflicts of interest related to contracts worth 16 million drams, Sapeyan has continued to sign agreements with the company in 2024, amounting to 6.6 million drams. While the mayor sought CPC guidance on some contracts to avoid conflicts, other contracts were signed without such clearance, leading to further investigations.

Similarly, in the town of Tegh, community leader Davit Ghulunts has awarded contracts worth 378 million drams to companies owned by his brother, Sasun Ghulunts. These contracts have funded projects like irrigation networks, playgrounds, and building renovations. Despite repeated warnings from governance experts about breaches of Armenia’s public service laws, Ghulunts has defended these deals, claiming a lack of alternatives in the border region. Allegations of nepotism have also emerged, with Ghulunts awarding contracts to businesses owned by other family members, including his wife and uncle. The CPC has launched investigations into these activities as well.

Both cases highlight ongoing concerns about public officials using their positions to benefit family-run businesses, potentially eroding public trust in governance. These practices emphasise the need for stricter enforcement of anti-corruption laws and greater transparency in government procurement processes.

The US proposes new anti-corruption laws following Supreme Court’s Snyder decision

A bipartisan group of US House members introduced the No Gratuities for Governing Act of 2024 to address the Supreme Court’s Snyder decision that limits federal prosecutors’ ability to charge state and local officials for accepting illegal gratuities. These payments, offered as rewards or tokens of appreciation after official actions, are now excluded from federal anti-corruption laws following the Court’s June decision in Snyder v. United States. The ruling overturned the conviction of a former Indiana mayor who accepted $13,000 from a contractor after awarding a $1.1 million city contract, citing a lack of explicit legislative language covering gratuities.

The proposed legislation aims to restore clarity and strengthen the bipartisan anti-corruption laws enacted 40 years ago, which were designed to prevent undue influence and ensure fair competition for public contracts. The Supreme Court’s decision left Congress with the opportunity to reaffirm its stance against illegal gratuities. Advocates urge swift approval of this bipartisan measure to uphold accountability, protect taxpayer resources, and safeguard public integrity. 

A year of bribery crackdowns and key lessons for businesses

The stories of bribery and corruption from 2024 underscore the ongoing global challenge of holding public officials and businesses accountable for unethical actions. From landmark legal rulings, such as the Panama president, to multinational corporate fines like SAP’s, the year has shown that no entity—whether an individual politician or a global corporation—is immune from scrutiny when it comes to corrupt practices. The Azerbaijani laundromat scandal and corruption in Armenian local government highlight the persistent risks associated with political influence and nepotism in procurement processes. Furthermore, the introduction of the No Gratuities for Governing Act in the US reflects a necessary step to close legal loopholes and maintain the integrity of anti-corruption laws.

These cases serve as important reminders of the need for strong oversight, transparent governance, and robust anti-corruption frameworks. As 2024 has demonstrated, vigilance and accountability are critical to combatting corruption and ensuring public trust in institutions. Going forward, businesses and public officials must be increasingly aware of the legal and reputational risks posed by bribery and corruption, and ensure they operate with the highest ethical standards to avoid costly legal and financial consequences.

For businesses, the key lessons are clear:

Understand and comply with anti-corruption laws: Make sure your operations, both domestically and internationally, fully comply with local and international anti-corruption regulations. This includes understanding the legal nuances of each jurisdiction and staying up to date on legal changes like the Snyder decision.

Implement strong internal controls: Companies must have clear policies, procedures, and oversight mechanisms in place to monitor interactions with public officials. This includes performing thorough due diligence on third-party intermediaries and ensuring transparency in all dealings.

Avoid conflicts of interest: When engaging with government officials, properly assess contracts and transactions to ensure they are free of conflicts of interest. This not only helps avoid legal trouble but also safeguards the company’s reputation by demonstrating a commitment to ethical practices.

Foster a culture of integrity: Establish a culture that values ethical behaviour and transparency at all levels of the organisation. Encourage employees to report suspicious activities, and ensure they feel protected when doing so.

Take proactive measures to address potential risks: With the increasing scrutiny on corruption and bribery cases globally, businesses should regularly review their practices and risk exposure, particularly in high-risk regions or sectors. This includes training staff, creating awareness, and fostering a strong compliance program.

Businesses must remain vigilant and ethical in all dealings with public officials, understanding that the risks of bribery and corruption are high. By committing to transparency, strict compliance, and ethical governance, companies can help ensure that they navigate the complexities of international business while minimising the potential for scandal or legal consequences.

What does 2025 hold in store for corruption and financial crime? Join our free, 1-hour webinar on Wednesday, 15 January 2025 at midday UK time

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