Monday, February 12, 2007

J & J Needs to Go to Halliburton School

Johnson & Johnson revealed it may have made improper payments in connection to medical devices in two small market countries. The company confessed to the Justice Department and the Securities and Exchange Commission. The head of worldwide medical devices sacrificed his job, likely in an effort to minimize damages.

The action broke corporate policy and fell within the jurisdiction of the Foreign Corrupt Practices Act. Did the international chief not know of Halliburton’s Facilitating Payments policy? If he’d been aware, Michael Dormer would still have a job.

The Company may be required to make facilitating or expediting payments to an official or employee of a government outside the United States, the purpose of which is to expedite or to secure the performance of routine governmental action by such government official or employee. Such facilitating payments may not be illegal under the FCPA and similar Laws of other countries. Nevertheless, it may be difficult to distinguish a legal facilitating payment from an illegal bribe, kickback or payoff.

Yes, the old difficult to distinguish defense. It sounds so Clintonesque…

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