Arthur J. Gallagher & Co. Subpoenaed by DOJ’s Foreign Bribery Unit

Arthur J. Gallagher & Co. received a subpoena from the Justice Department's foreign bribery unit in relation to Ecuador's investigation into corruption at state-owned enterprises.

Source: WSJ | Published on November 7, 2022

DOJ and Arthur J. Gallagher case

Arthur J. Gallagher & Co. said it received a subpoena from the Justice Department’s foreign bribery unit, becoming the latest company to become entangled in Ecuador’s sprawling investigation into corruption at state-owned enterprises.

The subpoena was disclosed in the insurance brokerage’s quarterly financial report this week in Rolling Meadows, Illinois. The company received the information request in the third quarter from the Justice Department’s Foreign Corrupt Practices Act unit, according to Arthur J. Gallagher.

Prosecutors from that unit have requested information from Arthur J. Gallagher regarding its insurance business with public entities in Ecuador, according to the company’s Nov. 2 report.

The FCPA is an anti-bribery statute that forbids companies with ties to the United States from paying bribes to foreign public officials in order to gain a competitive advantage. The Justice Department and the Securities and Exchange Commission are in charge of enforcing the law.

For years, the Justice Department’s FCPA unit has pursued investigations into corruption at Latin American state-owned enterprises, in a multiagency effort that has resulted in dozens of indictments against businessmen and current and former government officials in Ecuador and Venezuela.

Arthur J. Gallagher’s spokesperson did not immediately respond to a request for comment. In its filing, the company stated that it was cooperating with the government’s investigation and that it did not expect the investigation to result in a material loss.

A spokesman for the Justice Department declined to comment on the revelation.

The Justice Department’s most recent investigation has focused on Ecuadorean state-owned insurance companies. The department charged three men in July for allegedly conspiring to pay bribes to officials at Seguros Sucre SA and Seguros Rocafuerte SA.

The charges came after an indictment charging Ecuador’s former comptroller general, Carlos Ramon Polit Faggioni, with using the US financial system to launder the proceeds of illegal bribery schemes was unsealed in March. Prosecutors allege that in one scheme, Mr. Polit accepted a bribe from an Ecuadorean businessman in order to help him obtain contracts from Seguros Sucre.

The Seguros Sucre allegations have also implicated an insurance brokerage now owned by Marsh & McLennan Cos. Prosecutors said in a public letter to Jardine Lloyd Thompson Group Holdings Ltd. in March that they had discovered evidence that the company paid more than $10 million to a Florida-based intermediary, who in turn paid more than $3 million in bribes to help it obtain contracts with Seguros Sucre.

In its letter, the Justice Department stated that it would not prosecute Jardine Lloyd Thompson due to the company’s decision to voluntarily report the matter and strengthen its compliance program.