The FBI’s International Corruption Unit (ICU) is the leading investigative entity in combating foreign corruption. ICU’s mission is to lead law enforcement efforts in the fight against foreign corruption. ICU manages five programs: the Foreign Corrupt Practices Act (FCPA), Kleptocracy Initiative, Antitrust, International Fraud against the Government, and International Corruption of Federal Public Officials.
Foreign Corrupt Practices Act
ICU has management responsibility and program oversight for FBI investigations of the FCPA. The 1977 legislation has two main provisions: the first deals with bribery of foreign officials, and the second deals with accounting transparency requirements under the Securities Exchange Act. The dual elements were designed to facilitate parallel criminal and civil enforcement to stem corruption and promote fair business practices worldwide. The anti-bribery provision makes it illegal for U.S. companies and certain foreign companies to bribe foreign officials to obtain or retain business. The bribes can be in the form of money or any other items of value. The accounting provision of the FCPA focuses on requirements applying to U.S. companies and all foreign companies whose securities are listed on the U.S. stock exchange. The United States cannot charge the foreign official under the FCPA; rather, the U.S. works together with international law enforcement partners by investigating U.S. subjects complicit in paying bribes to foreign officials. The supply and demand equation of bribe paying and receiving illustrates the FCPA and kleptocracy violations as two sides of the same coin. For more information read the Department of Justice’s (DOJ) FCPA Resource Guide.
Kleptocracy is a form of political corruption in which the ruling government seeks personal gain and status at the expense of the governed, literally meaning “the rule by thieves.” Through graft and embezzlement of state funds, corrupt leaders amass tremendous wealth at the expense of the broader populace. Some of the most egregious examples have occurred in countries with very high rates of poverty. The inherent challenge for corrupt leaders is covertly expatriating and holding money in secure locations where it can be accessed in the future. Generally, that requires international movement of funds. When transfers occur in U.S. dollars or transit the U.S. banking system, federal money laundering jurisdiction is established. The FBI initiates money laundering investigations to trace the international movement of assets and, in conjunction with foreign partners, forfeit and repatriate assets back to legitimate authorities in victim countries.
Among the most challenging money laundering investigations are those targeting “gatekeepers,” which may include bankers, brokerage houses, trust companies, attorneys, accountants, money managers, notaries, or real estate agents. ICU investigates these international business people who provide professional services to illicit actors wishing to disguise the source or nature of their money. These insiders have unique knowledge concerning the financial and legal systems in which they operate, making detection difficult. ICU’s kleptocracy program is run in close coordination with DOJ’s Kleptocracy Asset Recovery Initiative (KARI), part of the broader Priority International Money Laundering Threat (PIMLAT) violation.
International Contract Corruption
ICU has program management responsibility over cases involving international fraud against the government and international corruption of federal public officials. The FBI was a co-founder of the International Contract Corruption Task Force (ICCTF), created in 2006 to address contract fraud concerns stemming from overseas U.S. government spending during the wars in Afghanistan and Iraq. These cases typically involve bribery, gratuities, contract extortion, bid rigging, collusion, conflicts of interest, product substitution, items/services invoiced without delivery, diversion of goods, and corporate and individual conspiracies at various levels of U.S. government operations. ICU’s program extends beyond the war effort to include worldwide Contingency Operations involving U.S. military actions, foreign aid and development, and humanitarian aid in any international region. Spending on these programs is highly susceptible to corruption and fraud by those wishing to take advantage of the chaotic circumstances surrounding these benevolent endeavors. Misuse of U.S. funds overseas poses a threat to the United States and other countries by promoting corruption within the host nation, damaging diplomatic relations, inadvertently supporting insurgent activity, and potentially strengthening criminal and terrorist organizations.
ICU has program management responsibility for FBI’s antitrust investigations which target conspiracies among competitors to fix prices, rig bids, or allocate markets or customers. Price fixing, bid rigging, and market allocation deprive U.S. consumers of true competition, an economic bedrock of our free and democratic society. Perpetrators of antitrust crimes are found at home and abroad—they often operate in multinational companies that bask in illegal profits at the expense of U.S. consumers. The ill-gotten gains and competitive advantages stolen by cartels reduce supply, eliminate incentives to compete by offering better and more innovative products and services, and destabilize economic markets.
Most recently, ICU has undertaken two large initiatives: the creation of three international corruption squads dedicated to investigating FCPA, kleptocracy, and international antitrust cases and the development of a robust private sector outreach program.
International Corruption Squads
The International Corruption Squads (ICS), based in New York City, Los Angeles and Washington, D.C, were created to address the national impact of foreign bribery, kleptocracy, and international antitrust schemes. These schemes negatively affect U.S. financial markets and economic growth when not adequately addressed. They are unique in nature in that they are international matters with the overt criminal acts typically occurring outside U.S. borders. Without these dedicated resources, it was difficult for FBI field offices to investigate international matters that did not directly affect their area of responsibility as clearly as some other violations; therefore, the FBI has created three international corruption squads fully dedicated to addressing international corruption matters without draining the resources of individual field offices.
The international corruption squads are a vital resource to combat international cartels and corruption. The violations addressed by the ICSs are equally recognized by both DOJ and the FBI as matters posing significant risks to U.S. national interests. These squads not only lend additional resources to a global threat but they also allow the Bureau to proactively attack the matters by using sophisticated investigative techniques that have long been successful against other complex criminal matters.
Private Sector Outreach
In an effort to combat international corruption and cartels, the FBI’s ICU created a proactive strategy that places an emphasis on strengthening existing relationships and forging new partnerships in the private sector. This is not new to the FBI, which has leveraged relationships throughout our 100+ years from our fight against organized crime to our ongoing battle against terrorism. Nonetheless, we believe by fostering these vital relationships, the Bureau will be able to effectively fight international corruption to ensure a fair competitive global market environment for companies resulting in a strong U.S. economy.