U.S. Department of Justice Will Fight Corruption in the Construction Industry
2019-03-19 10:24 Tuesday
The U.S. Department of Justice (DOJ) is keeping a close eye on the construction industry, and the industry should be prepared. Under the Foreign Corrupt Practices Act and the False Claims Act, there will be a significant increase in the number of investigations and enforcement actions by the DOJ.
According to people familiar with the matter, the DOJ's recent actions show that the agency is aggressively expanding its enforcement.
Paul Monnin, a partner at Alston & Bird based in Atlanta, said the construction industry has become "the current frontier in the fight against corruption, bribery and fraud." Paul Monnin was an assistant U.S. attorney in Georgia and deputy director of the economic crime division.
Large construction and infrastructure projects often involve large sums of money that flow down the subcontractor chain, each of which can lead to misconduct. If the project is placed in a foreign jurisdiction, there is a serious risk that government officials could take bribes to obtain construction permits.
"We are seeing an increase in major infrastructure projects, often in developing countries where the risk of corruption is highest. There are risks in every corner of these projects, "said Dan Shallman, a partner at Covington & Burling in Los Angeles.
According to Chris Roux, co-head of Alston & Bird, American construction companies operating overseas also face significant risks in forming joint ventures with local companies that are "inexperienced and used to doing business with bribes".
Asked whether the government was targeting specific sectors of the construction industry, a justice department spokeswoman, Nicole Navas Oxman, wrote in an email that the agency was "following the evidence -- we are not targeting specific sectors." She also said there were no anti-corruption enforcement statistics relating to foreign construction projects.