????That's because, surprisingly, while FCPA makes foreign bribery punishable in the U.S., for a long time there was no requirement that companies and their officials report the misdeeds, even after they found out about them. And that's why, despite the law, bribery went mostly unchecked for decades even after FCPA was on the books. That changed, at least for public companies, after the passage of Sarbanes Oxley in 2002. Under that law CEOs and CFOs must certify that their companies' financial filings are correct. Bribes, because they have to hidden, are generally an indicator that at least something in a company's books has been faked. So under Sarbanes Oxley it's effectively a violation of securities law not to disclose knowledge of potential bribes.
????"You still don't have to tell law enforcement officials, but you do have to change the language in your financial filings and any deviation from the normal boiler plate usually gets noticed," says Philip Urofsky, a partner at law firm Shearman & Sterling.
????The result has been a flood of FCPA cases. The vast majority of cases brought against large public companies under the act are self-reported by companies either trying to minimize fines or shift blame to low-level employees. That doesn't appear to be what happened at Wal-Mart. Duke was the head of the company's international operations when the allegations of bribery came to light at the company. Nonetheless, when he became CEO in early 2009, Duke attested to the fact that the financial statements were accurate, and that all instances of possible fraud had been disclosed. Former CEO Lee Scott appears to have known about the concerns about bribes and signed off on financial statements as well. The company didn't disclose to shareholders it was investigating a potential violation of FCPA until late last year.
????What's more, while companies are not required to report evidence that their employees bribed foreign officials, they are required to have controls in place to detect bribes and fairly investigate and document the matters when they occur. That doesn't seem to be what happened at Wal-Mart. According to the Times, after Duke and other company officials found out about the potential bribes they eventually assigned the internal investigation of the matter to an executive who was alleged to have been complicit in the bribery scheme. Unsurprisingly, the official found little evidence of wrong-doing. If the investigation was indeed a sham, then that would be a violation of the FCPA as well.
????"If the theory is that Wal-Mart executives created a make-believe investigation, then that would support bringing a case against them," says Kaplan.
