SAP Settles Global FCPA Violations with DOJ and SEC for $222 million

Earlier last month, the Securities and Exchange Commission (SEC) announced that SAP SE (SAP), the publicly traded software company based in Germany, agreed to pay around $222 million to settle Department of Justice (DOJ) and SEC charges for violating the Foreign Corrupt Practices Act (FCPA). ^[1] The charges include a $118.8 million criminal fine and a $103.4 million administrative forfeiture for conspiracy to pay bribes in seven countries, violating the FCPA’s anti-bribery, record-keeping, and internal accounting provisions.

SAP entered a three-year deferred prosecution agreement for its criminal charges over its scheme of paying bribes to South African and Indonesian government officials in order to receive improper business advantages. The related civil settlement that SAP agreed to resolve its similar bribery schemes and corrupt conduct in the same countries along with Malawi, Kenya, Tanzania, Ghana, and Azerbaijan. According to authorities, between about 2013 and 2022, SAP’s agents illegally bribed South African officials and falsified book records and accounts to receive benefits from government entities including the City of Johannesburg, the City of Tshwane, the Department of Water and Sanitation (a South African state-owned and controlled water service), and Eskom Holdings Limited (a South African state-owned and controlled energy company). ^[2] For example, to obtain a $13.2 million contract with the city of Johannesburg in 2015, SAP paid for South African government officials’ New York trips including meals and golf excursions. ^[3]

Court documents showed SAP and co-conspirators delivered cash payments, political contributions, wire/electronic transfers, and luxurious gifts to foreign officials. In one incident, an SAP employee gave gifts to the State Oil Company of the Republic of Azerbaijan (SOCAR) to reward officials who supported and approved the pending sale. The SAP employee created a fraudulent Act of Acceptance between SOCAR and an SAP Azerbaijan partner, which was sent to SAP’s contract booking team in February 2022. SAP’s widespread corruption seemed rather overt, with one WhatsApp message from an SAP Indonesia account executive to an employee at an Indonesian intermediary reading, “Hehehe…. This is government bro, to catch a big fish we need to use a large bait.”

This recent settlement is just another example of how successful a tool like the FCPA can be at combatting corruption around the world. For instance, a whopping $2.6 billion in corporate fines were levied by FCPA units of the DOJ and SEC, and 54 enforcement actions were brought in 2019 alone.

FCPA

The Foreign Corrupt Practices Act (FCPA) applies worldwide prohibiting bribes made by U.S. individuals or publicly traded corporations to foreign government officials. Its two central provisions are (1) prohibiting bribery to retain or gain business and (2) mandating accurate accounting of corporate transactions with adequate internal accounting controls.

FCPA Whistleblowers

When a whistleblower voluntarily comes forward with original information about bribery schemes involving U.S. persons or publicly traded companies and foreign government officials, such whistleblower may be entitled to a portion of the successful enforcement action award. More specifically, a whistleblower may receive 10-30 percent of the total award if the sanctions exceed $1 million under the rubrick of the SEC whistleblower program, or up to 30% of what the government collects if the FCPA case is successfully brought as a False Claims Act lawsuit.

Whistleblowers are protected from employer retaliation and may be eligible for reinstatement, back pay, or other compensation under the Sarbanes-Oxley Act and the Dodd-Frank Act if an employer retaliates against them. A whistleblower who wishes to remain anonymous but still wants a portion of SEC enforcement action rewards must be represented by an SEC whistleblower attorney who can submit the information on their behalf. Anyone can report FCPA violations regardless of citizenship. If you know of a possible FCPA violation and want to help catch and stop illegal activity, contact a whistleblower attorney today. A whistleblower attorney can assist with navigating the whistleblowing process and help your chances of receiving monetary awards. Our experienced FCPA whistleblower attorneys would love to answer any questions you may have; to speak with one, schedule a free confidential consultation today.

[1] https://www.justice.gov/opa/pr/sap-pay-over-220m-resolve-foreign-bribery-investigations 

[2] https://fcpablog.com/2024/01/10/sap-pays-doj-and-sec-221-million-to-settle-global-fcpa-large-bait-violations/ 

[3] https://www.reuters.com/technology/sap-pay-more-than-220-mln-settle-us-bribery-charges-2024-01-10/