James Tillen was quoted regarding the fine levied by the Securities and Exchange Commission (SEC) to BHP Billiton for alleged books-and-record violations of the Foreign Corrupt Practices Act (FCPA). Billiton is the fourth company in recent months to pay a civil penalty to the SEC without suffering criminal penalties from the Department of Justice (DOJ). "That just goes to show the breadth of the accounting provisions versus the anti-bribery provision of the FCPA," Tillen said. Anti-bribery violations can be difficult for the DOJ to prove and the SEC's accounting-related charges require a lower standard of proof. In the case of Billiton, the SEC based its charges on the premise that the company's actions could potentially violate anti-corruption laws, not on any specific questionable transaction. Other than condemning BHP for sponsoring the attendance of government officials at the Olympics, the SEC order "doesn't go on to say that those resulted in business benefits or potential bribes," Tillen said, adding that the DOJ completed its criminal investigation without taking action, "which is further evidence that there wasn't an anti-bribery violation here."
BHP Billiton's situation speaks to the importance of proper documentation and "doing a better job of having full and complete records, supporting why you made the decision to approve the hospitality expense," Tillen said. Companies should have a process to collect that information, "but then have legal and compliance kick the tires to question the business sponsors about the purpose of it," he said. "This case is a good case for companies to use in justifying why hospitality requires scrutiny."