FCPA Construction and Power Projects: The Payment Hidden in the Project Cost

FCPA bribery on construction and power projects can hide in consultant commissions, inflated contracts and payments recorded as the cost of building an asset. The person who knows the tender, the work or the invoice may see the connection before anyone reviewing the accounts does. A bidder gets confidential information. A contractor receives an inflated payment. An executive approves an amendment that benefits the same people who arranged the award. The project keeps moving, and its paperwork gives the payment somewhere to hide.

Who Controls the Project and Who Receives the Money?

The person approving a project payment, the intermediary receiving it and the official benefiting from it can sit in different companies and countries. Parents, subsidiaries and joint ventures fund operations and approve budgets. Consultants arrange introductions or government contact. Banks move funds, while a public customer may control the award, acceptance of the work or financing. The business relationship connects these roles even when the invoices keep them apart.

For a project insider, the useful detail is often the decision behind the expense. Who needed a permit, who could change the bidder list, and who could approve the extra cost? Ownership records, approval authority, consultant agreements and payment instructions help explain which company and whose decisions were involved. A local consultant’s name on an invoice is only the beginning of that account.

Alstom’s Consultants, Foundations and Pending Decisions

Alstom’s 2014 guilty plea admitted facts about consultant payments, a foundation and hospitality connected to project decisions. The parent pleaded guilty to keeping false books and failing to maintain accounting controls under the Foreign Corrupt Practices Act. Its account shows why a project commission deserves to be read alongside the work assigned and the officials the consultant was expected to reach.

In the Tarahan project in Indonesia, the admitted facts described a consultant’s commission falling from 3% to 1% when part of the assignment moved to another consultant. The change connected the fee to the division of responsibilities. For someone who negotiated the engagement, the original agreement and its revision can explain what the company was buying far better than a ledger entry saying commission.

The same plea described $2.2 million paid in three installments to a U.S.-based foundation associated with a Saudi decision-maker. It also described correspondence connecting hospitality for Egyptian electricity officials to unresolved commercial matters. A project employee may know why the payment was proposed, who requested it and which commercial decision was still pending.

Rolls-Royce supplies an energy-business parallel. Under its deferred prosecution agreement announced in 2017, the company admitted that more than $35 million in adviser commissions and other payments funded bribes for official information and contracts. The commercial adviser stood between the company and the official benefit. An employee who understood the adviser’s real assignment could connect the commission to the business it was intended to secure.

Petrobras’s Tender Became an Inflated Asset

Petrobras’s construction-contract case follows the money from bidder selection into the asset accounts. In its 2018 non-prosecution agreement with the Justice Department, Petrobras admitted facts about executives and political recipients receiving kickbacks from inflated contracts. The inflated costs were capitalized, overstating assets. The company paid too much for the work and then carried the excess as value on its books.

The Securities and Exchange Commission’s separate order alleged that executives steered contracts toward a cartel of suppliers. According to the order, executives supplied inside information, manipulated bidding and approved contracts outside procurement rules. For the RNEST refinery project, an executive shared the final confidential list of invited contractors before the invitations went out. The list helped the cartel coordinate its bids.

That is a concrete disadvantage for the competing bidder kept outside the arrangement. The cartel allegedly received information and influence that the procurement process was supposed to control. A bid manager who knows when invitations went out, who received the list and how the tender changed can explain the advantage before the first construction invoice arrives.

The order also described how the same authority carried into contract changes:

According to the SEC, Petrobras had a detailed procurement manual, but senior management repeatedly permitted bidding and contracting outside its procedures. The executives pushing the contract also decided whether its changes received legal review. We call that letting the people benefiting from the transaction choose their own scrutiny. Some control.

The SEC also described ad hoc bid committees whose membership escaped corporate policy. Inexperienced, lower-ranking members could be influenced by executives with an interest in the result. An employee who sat through those meetings may know how the decision was made, who pressed for it and why the written approval tells only part of the story.

The Commission said contractors overcharged for construction, goods and services and used the overpayments to fund kickbacks. Petrobras recorded the contractor payments as money spent acquiring and improving assets. Its project costs therefore carried the payment forward into books and records that overstated what the company owned.

The order recorded a $2.527 billion write-off of estimated kickback-related overpayments that Petrobras had counted as assets. The money had gone out to contractors, but the books carried it as something the company owned. A project accountant’s knowledge of the contract, amendment and cost entry can connect the purchasing decision to what investors later saw in the accounts.

Odebrecht Kept Another Set of Project Numbers

Odebrecht admitted in its 2016 guilty plea that its Division of Structured Operations ran a shadow budget and a parallel payment system. MyWebDay handled payment requests and accounting spreadsheets. Drousys carried separate coded communications. The funds stayed outside the ordinary balance sheet.

The admitted scheme involved approximately $788 million in bribes across more than 100 projects and 12 countries. The ordinary accounts left out what the separate requests, messages and approvals explained. A person who knew both systems could connect a legitimate project name to an expenditure its ordinary accounts did not show.

The plea also described deletion instructions and destruction of encryption keys that made substantial evidence inaccessible. That makes an insider’s knowledge of how the systems worked especially valuable: who requested a payment, who approved it and what a coded message meant. We look for the relationship between those facts and the project decision the money was meant to buy.

Petrobras’s admitted scheme put inflated costs into the asset accounts. Odebrecht’s admitted system kept bribe funds outside ordinary reporting. Together they show why understanding the project can matter as much as understanding the accounting software. The same commercial job can generate both a visible budget and records explaining payments concealed from it.

Permit Payments Can Pass Through the Construction Contractor

Walmart’s permit cases show another place where project money can take a detour. In its 2019 non-prosecution agreement, Walmart admitted that it failed to control how money went to Mexican intermediaries who obtained permits through improper payments. Their invoices described legal services, while store budgets used external or contract services. Codes carried the actual reasons for the payments.

The Securities and Exchange Commission’s separate Walmart order alleged that a Brazilian intermediary was retained for stores delayed by licensing problems. According to that order, the intermediary received approximately $400,000 indirectly through the subsidiary’s contractor despite earlier corruption concerns and without due diligence. The construction contractor was part of the alleged payment route for the retailer’s permits.

The order also recounted a former construction-firm employee’s statement that the intermediary requested cash while working on a construction permit. The employee said he understood the cash was intended for improper payments to Brazilian officials. That account gives the contractor-side employee a distinct place in the story: the retailer’s project records and the contractor’s handling of the money describe different parts of the same arrangement.

The follow-up mattered too. Walmart’s admitted Mexico account described investigators corroborating parts of an internal complaint, recommendations going unfulfilled and further review being assigned to implicated local personnel. An employee who knows what happened after a concern was raised may be able to explain why a payment practice continued after someone questioned it.

When the Customer Holds Public Power

A state-enterprise employee can be a foreign official at the customer’s own company. For a construction or power-project insider, the practical connection is the authority the person exercised over the business: selecting bidders, approving a contract, accepting work or arranging financing.

The payment may be aimed at securing financing before construction starts. In the Justice Department’s 2026 account of a former banker’s criminal trial, a Ghana power-plant scheme involved bribes concealed through shell companies, sham invoices, nominee accounts, cash withdrawals and personal email. The account said the banker lied to Goldman Sachs’s compliance staff and Goldman withdrew from the project over corruption concerns.

What a Project Insider Can Explain

Project knowledge connects the official decision, the benefit and the record that concealed it. A commercial employee may know why an amendment changed the price. Someone in finance or project accounting may know where the extra cost landed. An employee of a consultant or contractor may know who performed the work and who actually received the money.

A competing bidder may recognize a change in access or tender information. An auditor may know what an approval omitted or why a recommendation disappeared. Those accounts become stronger when the payment evidence connects the agreement, actual work, account beneficiary and pending official decision.

A consultant relationship also continues after the initial approval. The Justice Department’s September 2024 compliance evaluation asks about the business reason for an engagement, compensation, actual performance, exercised audit rights and continuing monitoring. Those questions reach the person who saw the work during the project. The employee who knows why payments continued after the assignment changed can explain what the initial approval leaves out.

The accounting lesson also appears outside construction. Fresenius Medical Care: A Case Study on the FCPA, published in the Journal of Forensic and Investigative Accounting in 2022, examines how payment schemes survived warnings and controls. Its healthcare examples include sham consulting, payments through third parties and unsupported accounting records. Its conclusion captures the problem:

For project work, we draw the same practical distinction between having paperwork and knowing what happened. A signed engagement explains the promised service. The deliverable, invoice and beneficiary explain much more about the payment. Someone inside the job can make that comparison with knowledge an outside reviewer lacks.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. For information about violations of the Foreign Corrupt Practices Act, the separate Securities and Exchange Commission whistleblower program can pay 10% to 30% of the sanctions collected in qualifying actions. We assess the project, the payments and any connection to U.S. government money with you to identify the whistleblower opportunity your information can support.

You Know What the Project Paid For

If you know why a consultant was paid, how a contract grew or where the project money really went, speak with our FCPA whistleblower experts. We build the case strategy around your knowledge and bring in FCPA whistleblower lawyers who understand construction contracts, power projects and concealed payments. From the first call through the case, we stay beside you to pursue the strongest whistleblower case your evidence supports.