Foreign Bribes Subject Texas Aircraft Maintenance Company to Huge Fines

December 15, 2014

Foreign bribery whistleblowers will be encouraged by news that a company providing aircraft engine maintenance services has admitted to violating U.S. foreign bribery law and agreed to pay a $14 million fine.  According to a statement issued by the U.S. Department of Justice on Wednesday, December 10, 2014, the company, Dallas Airmotive Inc., admitted to bribing officials from the Brazilian and Peruvian air forces, as well as other government officials in Argentina and Brazil, in order to obtain and retain engine maintenance business from foreign government customers in Latin America.  The DOJ filed a criminal information in the U.S. District Court for the Northern District of Texas, charging the company with violating the anti-bribery provision of the Foreign Corrupt Practices Act (“FCPA”).

The FCPA, enacted by Congress in 1977, prohibits persons or entities from attempting to bribe foreign officials for the purpose of obtaining or retaining business.  In 2010, Congress passed the Dodd-Frank Act, which requires the Securities and Exchange Commission (“SEC”) to reward whistleblowers who voluntarily provide the agency with original information regarding bribes paid to foreign officials.

What is noteworthy about this case, particularly in light of the implications for whistleblower rewards, is that the amount of the bribe at issue here was approximately $35,000, but nevertheless resulted in a fine of $14 million.  This makes clear that FCPA whistleblowers stand to earn significant rewards if they can provide original information to the SEC concerning the payment of bribes.

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