Boston Consulting Group Angola Bribery Declination

The Justice Department has declined to prosecute the Boston Consulting Group, Inc. (BCG) for a scheme in which the firm paid $4.3 million in "commissions" to obtain consulting contracts with the government of Angola.

The Government’s investigation found evidence that from in or about 2011 until in or about 2017, BCG, through its Lisbon, Portugal office, paid its agent in Angola to help BCG obtain business from the Angolan Ministry of Economy (“MINEC”) and the National Bank of Angola (“BNA”).

Certain BCG employees in Portugal were aware that the agent had close ties to Angolan Government officials and members of the ruling political party. BCG agreed to pay the agent 20 to 35 percent of the value of any government contracts procured and sent the funds to the agent’s three different offshore entities.

BCG’s agent sent a portion of the commissions in Angolan currency to Angolan government officials associated with MINEC in connection with obtaining the BCG contracts. Certain BCG employees in Portugal took steps to conceal the nature of the agent’s work for BCG when internal questions arose, including by backdating contracts and falsifying the agent’s purported work product.

In total, the agent helped BCG secure eleven contracts with MINEC and one with BNA, which resulted in revenues of approximately $22.5 million and profits for BCG in the amount of approximately $14.424 million.

The Government has decided to decline prosecution of this matter based on an assessment of the factors set forth in the Criminal Division’s Corporate Enforcement and Voluntary Self- Disclosure Policy and the Principles of Federal Prosecution of Business Organizations, Justice Manual 9-28.300, including but not limited to:

1. BCG’s timely and voluntary self-disclosure of the misconduct, which occurred after BCG uncovered evidence, in the form of a 2014 email, of a potential FCPA violation;
2.  BCG’s full and proactive cooperation in this matter (including its provision of all known relevant facts about the misconduct, including information about the individuals involved) and its agreement to continue to cooperate with any ongoing government investigations and any prosecutions that have resulted or might result in the future;
3.  the nature and seriousness of the offense;
4.  BCG’s timely and appropriate remediation, including termination of the personnel involved in the misconduct with compensation-based penalties, including requiring implicated BCG partners in Portugal to give up their equity in the Company, denying access to financial transition normally accorded to BCG employees leaving the firm, and withholding bonuses;
5.  BCG’s significant improvements to its compliance program and internal controls including formalizing employee training and vendor / client screening protocols, establishing local and global risk committees that meet regularly, and developing guidelines for opening offices in new and emerging markets;
6.  the absence of aggravating circumstances, such as involvement by executive management, significant profit from the misconduct, egregiousness or pervasiveness of the misconduct, or criminal recidivism; and
7.  the fact that BCG agrees to and will disgorge the amount of its ill-gotten gains.

BCG agrees to continue to fully cooperate with the Government’s ongoing investigation, including but not limited to the continued provision of any information and making available for interviews and/or testimony those officers, employees, or agents who possess relevant information, as determined in the sole discretion of the Government.

BCG further agrees to disgorge $14,424,000, which represents the profit to BCG from the contracts secured by the agent, as calculated by the Government and agreed to by the Company.

This letter agreement does not provide any 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.

Angola Update

Meanwhile Angola’s Finance Ministry said last week that it will extend the practice of paying local suppliers with Treasury bills because the oil-rich nation’s government doesn’t have sufficient cash, Bloomberg reports.

Angola must pay $1.1 billion monthly for domestic and foreign debt until December, while its revenue generation is a fraction of that amount, Luanda-based newspaper Expansao reported Aug. 12.

In July The US Export-Import Bank announced approval of a $1.6 billion direct loan to support the construction of 65 solar mini grids with energy storage facilities, and the expansion of existing electrical grid distribution networks to power water collection, treatment and purification systems in four southern provinces in Angola.  [12517]