Insurance Broker Arthur J. Gallagher Subpoenaed by Justice Department’s Foreign Bribery Unit

The company says prosecutors are seeking information related to its insurance business in Ecuador

The Justice Department’s Foreign Corrupt Practices Act unit has for years pursued investigations into corruption at state-owned enterprises in Latin America.

Photo: michael reynolds/Shutterstock

Arthur J. Gallagher & Co. said it received a subpoena from the Justice Department’s foreign bribery unit, making it the latest company to become ensnared in a sprawling investigation into corruption at state-owned companies in Ecuador.

The Rolling Meadows, Ill.-based insurance brokerage disclosed the subpoena in a quarterly financial report this week. The information request, which the company said it received in its third quarter, was from the Justice Department’s Foreign Corrupt Practices Act unit, Arthur J. Gallagher said.

Prosecutors from that unit have asked Arthur J. Gallagher for information related to its insurance business with public entities in Ecuador, the company said in its Nov. 2 report.

The FCPA is an antibribery statute that prohibits companies with ties to the U.S. from paying bribes to foreign public officials to gain a business advantage. The law is enforced by the Justice Department and the U.S. Securities and Exchange Commission.

The Justice Department’s FCPA unit has for years pursued investigations into corruption at state-owned enterprises in Latin America, in a multiagency effort that has yielded dozens of indictments against businessmen and current and former government officials in Ecuador and Venezuela.

A spokesperson for Arthur J. Gallagher didn’t immediately respond to a request for comment. The company in its filing said it was cooperating with the government’s investigation and that it didn’t expect the probe to result in a material loss.

A Justice Department spokesman declined to comment on the disclosure.

One recent line of the Justice Department’s investigation has focused on Ecuadorean state-owned insurance companies. In July, the department who it said conspired to pay bribes to officials at Seguros Sucre SA and Seguros Rocafuerte SA.

The charges followed the unsealing in March of an indictment charging Ecuador’s former comptroller general, Carlos Ramon Polit Faggioni, with using the U.S. financial system to launder the proceeds of illegal bribery schemes. In one scheme described by prosecutors, Mr. Polit allegedly received a bribe from an Ecuadorean businessman to help him obtain contracts from Seguros Sucre. 

The allegations surrounding Seguros Sucre also have implicated an insurance brokerage now owned by Marsh & McLennan Cos. In a public letter to Jardine Lloyd Thompson Group Holdings Ltd. in March, prosecutors said they had found evidence that the company paid more than $10 million to a Florida-based intermediary, who in turn paid more than $3 million in bribes to help it receive contracts with Seguros Sucre.

The Justice Department in its letter said it was declining to prosecute Jardine Lloyd Thompson, citing the company’s decision to voluntarily report the matter and strengthen its compliance program.

Write to Dylan Tokar at dylan.tokar@nzm7.com

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