"Department of Justice alleged Siemens engaged in a global pattern of bribery and madethousands of payments to foreign government officials totaling more than $1.4 billion. Theinvestigation suggested these practices were covered up and supported by inadequate internalcontrols. Several senior executives were involved in or had knowledge about the bribery. By thetime of the ruling, these dishonest practices had resulted in a strong negative impact on thecompany’s corporate culture, since many employees at different levels of the firm appeared tohave knowledge of the bribery. In 2008 Siemens pleaded guilty to violating both the Anti- Bribery and Company Records and Internal Control provisions of the FCPA. Siemens agreed topay a fine of more TABLE 1 Companies Accused of Violating the FCPAFirm AccusationAvon Bribed foreign officials in AsiaJohnson & Johnson Bribed doctors in Europe and offered kickbacks in IraqIBM Bribed officials in South Korea with cash and giftsWalmart Bribed Mexican officials to win zoning permitsHP Bribed officials in Mexico, Russia, and Poland© Cengage Learning 2015BK-CHE-FERRELL_11E-150190-Case 18.indd 603Copyright 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, orduplicated, in whole or in part. Due to electronic rights, some third party content may besuppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves theright to remove additional content at any time if subsequent rights restrictions require it.604 Part 5: Casesthan $800 million for violating the FCPA, as well as a fine in Munich, Germany for the board’sfailure to assume its proper supervisory responsibilities in the case. At the time of the judgment,this was an unprecedented case because of the geographic reach and scale of the bribery.Siemens is an example of the global reach of the FCPA. Currently there are several hundred non- U.S. companies with shares traded on the U.S. stock exchange that are subject to the FCPA.Bribery is such a routine component of business transactions in some parts of the world that it is often overlooked as a practice capable of causing far-reaching damage. In reality, bribery has thepotential to inflict social adversity on a variety of stakeholders. Transparent business transactionsdeter this deceitful behavior while encouraging fair and ethical market competition. The risks ofglobal bribery are prevalent to everyone in the marketplace where it is used.Ralph Lauren: Value of Cooperation with the FCPA While corporations may take steps to avoidcorruption and bribery, in a multinational and multicultural business environment, corruptpractices can still occur. As a result, how corporations respond to discovered problems hassignificant financial and reputational repercussions. This can best be seen in the case of RalphLauren Corporation, a designer and marketer of apparel, accessories, home furnishings, andfragrances. During an effort to improve its worldwide internal controls and compliance efforts in2010, Ralph Lauren discovered its Argentine subsidiary paid bribes to government officials toimproperly secure the importation of their products in Argentina. These bribes totaled $593,000paid out over four years. Within two weeks of uncovering the illegal actions, Ralph Laurenreported these findings to the SEC and cooperated with the subsequent bribery probe. In 2013 theSEC entered into a non-prosecution agreement (NPA) with Ralph Lauren, the first NPA the SEChad ever entered into for violations of the FCPA. The SEC stated it would not charge RalphLauren with violating the FCPA because of the company’s prompt response, thoroughness of itsinvestigation, and cooperation with authorities. In return, Ralph Lauren agreed to pay more than$700,000 in illicit profits and interest earned from the bribes that the subsidiary paid out over thefour-year period. However, this amount was minimal in comparison to the financial, labor, andreputational costs Ralph Lauren would have incurred if it had been prosecuted for bribery. RalphLauren is an exemplary case that will likely be used by the SEC as a model for companies tofollow when discovering FCPA violations. George S. Canellos, former Acting Director of the "