‘Blackwater’ FCPA Probe Closed with No Charges
By Jeffrey Benzing | August 14, 2012 5:33 pm

The Justice Department has closed its foreign bribery inquiry of the armed security provider Academi LLC, according to a July 19 letter to the company from prosecutors that was provided to Just Anti-Corruption.

The Arlington-based company, formerly known as Blackwater Worldwide, settled export offenses with federal prosecutors last week and signed off on a deferred prosecution agreement with the U.S. Attorney’s office for the Eastern District of North Carolina.

In its original report on the settlement, Just Anti-Corruption accurately reported that the Aug. 7 agreement referenced a current investigation by the Justice Department into foreign bribery allegations.

Just Anti-Corruption later learned that the investigation was closed last month without public notice. Yet the language in the agreement hadn’t been updated by prosecutors or flagged by Academi before the agreement was released publicly.

A representative from Academi was not immediately available for comment following last week’s settlement announcement. An Academi spokesman did contact Just Anti-Corruption Aug. 8 after seeing Just Anti-Corruption’s article on the settlement, but did not say that the bribery probe had recently been closed.

Just Anti-Corruption was alerted to the situation days later by a knowledgeable person outside of the company who asked to remain anonymous. In response, Just Anti-Corruption asked Academi to provide the Justice Department letter, known as a “declination” because the government has declined to prosecute.

According to the declination letter, the Fraud Section of the Justice Department’s Criminal Division had been investigating foreign bribery allegations following a November 2009 report in the New York Times.

In the wake of the 2007 shooting deaths of 17 Iraqi civilians in Baghdad’s Nisour Square, top Blackwater leadership had reportedly approved around $1 million in secret payments to win favor from Iraqi officials.

The Foreign Corrupt Practices Act prohibits payments to foreign officials to secure business advantages.

The Fraud Section said last month that it was closing its inquiry following its own investigation and an internal probe by Academi.

“We have taken this step based on a number of factors, including but not limited to, the investigation undertaken by Academi and the steps taken by the company to enhance its anti-corruption compliance program,” the declination letter said.

The armed services company has tried to distance itself from controversy and rebranded itself first as Xe Services and now as Academi. The company has revamped its compliance program and is under new leadership following the departure of founder Erik Prince and sale of the company in late 2010.

John Procter, a spokesperson for Academi, said the company had not previously disclosed that the FCPA inquiry had been closed. “We’re just trying to put a lid on all this old stuff,” Procter told Just Anti-Corruption.

Procter said he did not know the reason for the inaccurate language in the DPA but said the agreement had been in the works for a long time.

Representatives from the Justice Department in Washington, D.C. referred requests for comment to the U.S. Attorney’s office for the Eastern District of North Carolina. The Assistant U.S. Attorney involved in the case was not immediately available.

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