By Richard Messick
First posted on the Global Anticorruption Blog

In a 12 September guest post on the Global Anticorruption Blog, Nicole Fritz of South Africa’s Helen Suzman Foundation recounted Boston consulting guru Bain and Company’s role in the massive corruption that infected her country during the reign of its now deposed president Jacob Zuma. In another post a few days later, she asked the US Department of Justice to investigate the company for “potential breaches of the US Foreign Corrupt Practices Act of 1977.”

As she explained in a letter sent to the head of the FCPA unit, the evidence of violations is “not mere opinion.” Rather, it is drawn

“from reports produced by two separate judicial commissions of inquiry, chaired by eminent South African judges: first, the Judicial Commission of Inquiry into State Capture Report (“State Capture Report”); second, the final report of the Commission of Inquiry into Tax Administration and Governance at the South African Revenue Services, colloquially referred to in South Africa as the Nugent Commission Report.”  

Fritz detailed how, “Unable to compete on merit, Bain SA allied with a shadowy South African intermediary entity, Ambrobrite, whose directors’ sole credentials were their promise – and ultimate delivery – of unparalleled access to South Africa’s president at the time, Jacob Zuma.”

She added that, while recognising that Bain SA has paid back some $11.5-million in fees that it received for its illicit work at the South African Revenue Service (Sars), the idea that the company can remedy its liability under the FCPA by simply repaying its fees is misguided. “This is because the harm deserving of criminal sanction under the FCPA is the damage that Bain SA wrought on Sars’s revenue generation ability.”

Read the full text of Fritz’s letter.