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BCG has admitted to engaging in corrupt practices in Angola, paying millions of dollars in bribes to secure business contracts in the country. As a result, the consulting firm has agreed to forfeit over $14 million in profits from contracts it obtained with the Angolan economy ministry and central bank.
The US Department of Justice investigation revealed that BCG funneled money to offshore accounts controlled by intermediaries with ties to Angolan officials and members of the ruling political party. These illegal activities took place between 2011 and 2017, with bribes being sent through BCG’s office in Lisbon, Portugal.
While the DoJ found that BCG violated the US Foreign Corrupt Practices Act, the firm will not face prosecution as it self-reported the misconduct, terminated the involved individuals, and cooperated with the investigation. BCG admitted to paying an agent connected to Angolan officials a percentage of the contract value, using three offshore entities to conceal the transactions.
During the period of bribery, Angola underwent a leadership transition from José Eduardo dos Santos to João Lourenço, who cracked down on corruption linked to the previous regime. The US has since worked to strengthen ties with Angola, with President Joe Biden hosting Lourenço in Washington and supporting infrastructure projects like the Lobito Corridor.
BCG won a total of 11 contracts with the Angolan economy ministry and one with the National Bank of Angola during the investigated years, generating $22.5 million in revenue. The firm has agreed to return $14.4 million in profits from these contracts and has taken steps to enhance its compliance measures and internal controls.
Although the DoJ retains the option to reopen the investigation into BCG and potentially prosecute individuals involved, the firm has taken corrective actions by dismissing implicated employees and closing its office in Luanda, Angola. BCG has also improved its compliance function, internal controls, and training programs to prevent future misconduct.
In conclusion, BCG’s admission of bribery in Angola serves as a cautionary tale for companies operating in foreign markets. Transparency, ethical business practices, and regulatory compliance are essential for maintaining trust and integrity in the global business landscape.
