Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
BCG has admitted it paid millions of dollars in bribes to win business in Angola, and agreed to give up more than $14mn in profits from contracts it won with the country’s economy ministry and central bank.
The consulting firm sent money to offshore accounts controlled by middlemen connected to Angolan officials and members of the ruling political party, according to a US Department of Justice investigation made public on Wednesday.
The bribes were paid by BCG through its office in Lisbon, Portugal, between about 2011 and 2017, the DoJ said. Despite finding evidence that the activities breached the US Foreign Corrupt Practices Act, the DoJ said it would not be prosecuting BCG because the firm reported the matter itself, fired the individuals involved and co-operated with the inquiry.
BCG agreed to pay an agent with ties to Angolan officials between 20 per cent and 35 per cent of the value of the contracts it won, routing the money through three different offshore entities, the DoJ said.
“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,” the DoJ said.
The period of the bribes coincided with the end of the rule of the late José Eduardo dos Santos, who stepped down in 2017 after 38 years in power. His successor, João Lourenço, quickly moved to consolidate power partly by cracking down on allegedly corrupt officials linked to the Dos Santos regime.
The US has since moved to repair relations with Angola, one of Africa’s biggest oil producers. Joe Biden welcomed Lourenço to Washington last year and the US is helping to finance the Lobito Corridor, a revival of a 100-year-old railway linking mines in Zambia and the Democratic Republic of Congo to Angola’s Atlantic coast.
In total, BCG won 11 contracts with the Angolan ministry of economy and one with the National Bank of Angola over the years in question, bringing in $22.5mn in revenue. The firm will return the $14.4mn in profits that the contracts generated.
BCG said it had “exited the individuals from the firm and has since closed the office in Luanda, Angola”, and that it “has also continued to significantly strengthen its compliance function, internal controls, and training”.
The DoJ said that it reserved the right to reopen its inquiry into BCG if it learned new information, and also could still prosecute individuals.
Read the full article here
