Since 2009, the Obama administration has demanded in
one-third of its corporate bribery cases that companies hire
independent monitors, despite the added costs and intrusion into
the companies’ operations.

U.S. engineering company KBR Inc, German luxury automaker
Daimler AG and British defense contractor BAE Systems all were
required to hire independent monitors.

The New York Times reported last month that Wal-Mart spent
some $24 million bribing officials for building permits in
Mexico. U.S. and Mexican authorities are investigating.

If the allegations prove to be true, Wal-Mart
is likely to face a hefty financial penalty to settle
the matter. Legal experts believe the Justice Department will
expect the retailer to hire an independent monitor.

“Smart counsel here will probably, I suspect, propose a
corporate monitor just to try and convince the Department of
Justice that they get it and they want to do what is right to
take care of whatever the situation is,” said Scott
Fredericksen, a partner at Foley & Lardner LLP in Washington.

He served as a monitor for AGA Medical Corp which entered a
deferred prosecution agreement in 2008 over allegations it
violated the U.S. Foreign Corrupt Practices Act. The company
also paid a $2 million penalty and built a significant
compliance system.

As an independent monitor, Fredericksen said he conducted
reviews, tests, audits and interviews to help establish a
program to avoid further bribery problems and monitor progress.

‘NEED FOR COMPLIANCE’

“They brought in great talent as they really grew, people
who really got it in terms of the need for compliance,”
Fredericksen said about AGA Medical. The company was later
bought by St. Jude Medical.

A Reuters review of the 39 corporate deferred prosecution
settlements reached with President Barack Obama’s Justice
Department found that 13 included a requirement that a monitor
be retained, in some cases for as long as three years.

The Justice Department said any decision on a monitor would
depend on the case and pointed to memoranda issued in 2008 and
supplemented in 2010 that note prosecutors should be aware of
the potential benefits of a monitor as well as the costs to and
impact on the company.

“Among the many factors the department considers in making
this determination are the seriousness of the offense, the
length and pervasiveness of the misconduct, the nature and size
of the company, the quality of the company’s compliance program
at the time of the misconduct, and its subsequent remediation
efforts,” said Justice Department spokeswoman Alisa Finelli.

The top Justice Department prosecutor for FCPA cases, Lanny
Breuer, said in November 2009 that he would insist on corporate
monitors where the situation called for it.

Most of the monitors have been ordered in the biggest
bribery cases, including Siemens in which the company paid U.S.
authorities $800 million to settle bribery allegations and paid
a similar amount to German authorities. In recent years, the
recidivism rate in deferred prosecutions of bribery cases is
zero, leg a l experts said.

In the Wal-Mart case, the company quickly announced that it
had tasked one of its lawyers, former federal prosecutor Tom
Gean, to serve as its FCPA compliance officer.

WAL-MART DECLINES COMMENT

Wal-Mart declined to comment on the possibility of an
independent monitor and said it was committed to cooperating
with ongoing federal investigations. One former federal
prosecutor in Arkansas where the retailer has its headquarters,
Asa Hutchinson, suggested it may need someone from the outside.

“I would certainly recommend that they balance this internal
compliance officer position with a monitor that has a higher
level of independence and an outside view with credibility,” he
told Reuters.

Some companies and lawyers specializing in FCPA cases
complain that monitors are too costly — sometimes exceeding the
cost of penalties — and that they can be interventionist to the
point of telling a company how to run its operations.

“It is very expensive and let’s face it, it’s incredibly
invasive,” said John Kelly, a managing partner at Bass, Berry &
Sims PLC. “You’ve got someone inside the four walls of your
business telling you how to run it day to day essentially,
acting as the watchdog for the Department of Justice.”

Apparently heeding complaints from industry and defense
lawyers, the Justice Department last year allowed some companies
to submit periodic reports on their compliance, including
Johnson & Johnson which also paid $70 million in penalties.

In 2010, the Justice Department issued a memorandum
suggesting how a company and its independent monitor could
submit problems to prosecutors for solving. Some companies would
like more specificity and limits.

“It would be very useful to have established guidelines to
ensure that monitors stay within the parameters of their
designated role,” said Mitchell Ettinger, a partner at Skadden,
Arps, Slate, Meagher & Flom LLP.

The U.S. Court of Appeals for the District of Columbia Circuit heard arguments on a petition from the group, Mujahadin-e Khalq, or MEK, which is seeking an order forcing the State Department to either remove it from the list or require action within a specified period on its request to be delisted.

Iranians who belong to the group have been moving out of its Camp Ashraf base in Iraq to a processing center at a former U.S. military base in Baghdad, and the remaining 1,200 or so are expected to be moved in the next nine weeks or so, the administration said.

Clinton plans to decide on the group’s request to be delisted from the U.S. Foreign Terrorist Organization list “no later than 60 days after the last move,” Robert Loeb, a Justice Department lawyer representing the administration, told the appeals court that heard oral arguments on the issue.

It appeared to be the first time that the State Department had publicly given a rough timeline for making a decision on the matter.

Loeb acknowledged that a 60-day period for a decision “may not be realistic” because they could find additional evidence that needs to be weighed, but that Clinton had authorized him to tell the court of her plan.

Loeb said the administration has been carefully weighing whether the group has fully renounced its violent past and given up any weapons. He denied that the process was without an end. Clinton said in February the camp move was a “key factor” to making a decision.

“We’re not citing world peace” as a goal to determine the fate of the designation, Loeb said.

Also known as the People’s Mujahideen Organization of Iran, the group led a guerrilla campaign against the U.S.-backed Shah of Iran during the 1970s that included attacks on U.S. targets. It was added to the list in 1997, but the group has said that it has renounced violence.

UNWELCOME IN IRAQ

The group, which has pushed for the overthrow of Iran’s clerical leaders, found itself no longer welcome in Iraq under its new Shi’ite-led government that came to power after Saddam Hussein’s downfall in 2003.

As a result of the MEK’s listing as a foreign terrorist organization, Americans are barred from supporting the group, and its members or representatives are banned from entering the United States.

A lawyer for the group, Viet Dinh, pressed a three-judge appeals court panel to force the Obama administration’s hand and said that the terrorism designation has “severe implications on constitutional liberties” for the group.

He denied that the MEK members at the base were armed and saying that “the group for a decade has renounced violence.”

The three judges appeared skeptical of both sides during the arguments, acknowledging that it was not as if the Obama administration was “sitting on their hands”, as Judge Karen LeCraft Henderson put it during the nearly hour-long arguments.

Judge David Tatel raised the possibility of establishing a deadline for when Clinton must rule or take the Obama administration’s backup suggestion to require regular progress reports to the court.

But he questioned whether the group wanted a decision that could go against the group now but in a few weeks or months could be reversed.

Dinh argued that the law required Clinton to make a decision within short order and that the group wanted a decision made even if it was not to delist it because then it could appeal it in the courts. “Any decision would be better,” he said.

Tatel also pressed Loeb on why the administration just did not deny the application so the appeals process could move, but the lawyer said that the situation was “fluid” and did not want to risk hurting cooperation to close Camp Ashraf.

(Additional reporting by Arshad Mohammed in Washington; Editing by Philip Barbara)

The Supreme Court this year ruled a warrant was needed to put a GPS tracking device on a suspect’s vehicle, prompting questions about other instances where probable-cause warrants were needed to obtain information in the rapidly changing world of mobile devices.

Federal courts around the country are split on whether to require warrants, said Jason Weinstein, a deputy assistant attorney general in the Justice Department’s criminal division.

While prosecutors have been told to get warrants to put a tracking device on a vehicle, they should not be needed to obtain data from cell phone towers about the movements of a suspect, Weinstein said.

“There really is no fairness and no justice when the law applies differently to different people depending on which courthouse you’re sitting in,” he said at the “State of the Mobile Net” conference sponsored by the Congressional Internet Caucus Advisory Committee.

“For that reason alone, we think Congress should clarify the legal standard,” he said, adding that being required to get a warrant at what he described as early stages of investigations would “cripple” prosecutors and law enforcement.

One civil liberties advocate sought to challenge that assertion, saying that the Obama administration made the same argument during the Supreme Court GPS case and it was soundly rejected.

“Not one justice accepted the Department of Justice’s argument in that case. It got zero votes,” Greg Nojeim, senior counsel at the Center for Democracy and Technology, said during the conference. “We’re all here, the criminals are not taking over the country.”

While some proposals have been made in Congress to address concerns and confusion about when a warrant is needed as new technologies emerge, the chances of legislation passing are considered slim because it is an election year and little legislation is expected to pass.

(Reporting by Jeremy Pelofsky; Editing by Howard Goller and Cynthia Osterman)

At least 75 people in Miami, Houston and Baton Rouge were charged during the last two days for submitting false billing for home health care, mental health services, HIV infusions and physical therapy, among other charges.

President Barack Obama’s administration has been pushing to squeeze out fraud from federal programs like Medicare as part of a broader attempt to stem soaring healthcare costs, arguing fraud can contribute to rising prices for services.

Health and Human Services Secretary Kathleen Sebelius said that Obama’s landmark healthcare law has helped authorities further root out fraud, a law that is being challenged by Republicans and 26 out of the 50 U.S. states.

“Today’s actions are another example of how the Affordable Care Act is helping the Obama administration fight fraud and strengthen the Medicare program,” Sebelius said.

In Baton Rouge, seven people were arrested and charged with eight counts including conspiracy and healthcare fraud for billing Medicare for some $225.6 million in unnecessary services and in some cases not providing services billed.

They ran and worked at two community mental health centers in Louisiana where they billed for more group therapy sessions than were provided, including recreational and education psychotherapy, according to court records.

Medicare paid out more than $37.9 million for the services to the two centers in Baton Rouge, identified as Shifa Community Mental Health Center and Serenity Center, according to the court records.

U.S. prosecutors sought to have two of the owners of the centers, Hoor Naz Jafri and Roslyn Dogan, held without bond pending trial. They accused Dogan of stealing evidence from the prosecutors’ office to obstruct the investigation, according to a detention memo.

Four others who worked as therapists at the centers pleaded guilty last month to one count of conspiracy to commit healthcare fraud for purporting to provide group therapy and document patients’ attendance, the court documents said.

(Reporting By Jeremy Pelofsky; Editing by Jackie Frank)

The group, ranging in ages from 20 to 37, were arrested overnight by the FBI after planting the explosives on the bridge. Three have been charged already with conspiracy and attempting to use explosive materials and the other two are expected to be charged later on Tuesday.

The FBI said the five arrested, identified as Douglas Wright, Brandon Baxter, Anthony Hayne, Connor Stevens and Joshua Stafford, were under continuous watch as part of an undercover operation and therefore the public was never in danger. The explosives, supplied by an undercover FBI agent, were inert.

“I want to stress … at no time during this investigation was the public in danger,” FBI agent Stephen Anthony told reporters in Cleveland. The bridge is about 15 miles south of Cleveland in an area popular with hikers and joggers.

The group initially came under scrutiny by authorities in October 2011 when the FBI learned that some self-described anarchists planned to attend a protest in Cleveland, according to an FBI affidavit unsealed on Tuesday.

An FBI informant saw four of the men going through the crowd expressing displeasure at demonstrators’ unwillingness to engage in violent acts. The men wore masks and carried walkie-talkies, according to the affidavit.

Over the next several months, the group considered a variety of targets for attacks including the Group of 8 leaders meeting in Chicago and the Republican National Convention in Tampa, according to the FBI affidavit.

They also considered igniting smoke grenades off one bridge while they tried to knock large bank signs off the top of big office buildings in downtown Cleveland and even setting off a car bomb outside the Federal Reserve Bank there, the court papers said.

Late last month, the group settled on trying to blow up the four-lane Brecksville-Northfield High Level Bridge that crosses the Cuyahoga Valley National Park by placing explosives on some of the columns in hopes of the entire bridge collapsing.

Wright told a confidential source working with the FBI that “as long as stuff ‘gets f–ked up’ he’ll be happy with the action,” the FBI said in its affidavit filed with the court.

At one point, Wright expressed concern that the undercover FBI agent who sold them what they believed was powerful C-4 explosives for $900 was a police officer, but he continued with the plot.

The group had no ties to foreign terror organizations and the plot was not connected to the anniversary of the death of al Qaeda leader Osama bin Laden, who was killed in a raid by U.S. forces a year ago in Pakistan, said a U.S. Justice Department official who declined to be further identified.

The men were expected to appear in federal court in Cleveland on Tuesday.

The undercover operation is the latest of a number of sting operations undertaken by the FBI and Justice Department in an effort to thwart attacks by domestic and foreign militants.

(Additional reporting by Kim Palmer in Cleveland; Editing by Bill Trott and Jackie Frank)

The government watchdog group Judicial Watch had requested
the Defense Department and CIA release any photos or video
footage of the May 1 operation that killed bin Laden in
Abbottabad, Pakistan.

The Defense Department said it found no pictures or videos
sought by the group and the CIA said it found 52 such records
but refused to release them. It cited exemptions to the U.S.
Freedom of Information Act law for classified materials and
other reasons.

Judicial Watch sued in federal court and U.S. District Judge
James Boasberg sided with the Obama administration.

“A picture may be worth a thousand words,” wrote Boasberg.
“Yet, in this case, verbal descriptions of the death and burial
of Osama Bin Laden will have to suffice, for this court will not
order the release of anything more.”

The judge refused to substitute his judgment for that of the
CIA and the Pentagon regarding the national security risks in
releasing the classified records.

U.S. officials had long suspected bin Laden was hiding in
Pakistan after he escaped from Afghanistan where he had
orchestrated the Sept. 11, 2001 attacks against the United
States.

The White House said on May 4, 2011 that Obama himself had
decided against releasing photos of bin Laden’s dead body.
However, Boasberg said he understood the public clamor to see
the images from the raid and subsequent burial.

“It makes sense that the more significant an event is to our
nation – and the end of Bin Laden’s reign of terror certainly
ranks high – the more need the public has for full disclosure,”
the judge wrote.

However, he pointed to declarations from Pentagon and other
officials, including the commander of the operation Admiral
William McRaven, who said releasing the material showing the
aftermath of the raid and bin Laden’s burial at sea would cause
grave damage to U.S. national security.

The head of the CIA’s National Clandestine Service, John
Bennett, told the court in September that many of the images of
bin Laden’s body were graphic, including the fatal head wound
and “other similarly gruesome images of his corpse.”

Other photos showed bin Laden’s body being transported from
Pakistan to the USS Carl Vinson aircraft carrier, the
preparation of the body for burial and the burial itself at sea,
according to Bennett’s declaration filed with the court.

“The CIA’s explanation of the threat to our national
security that the release of these records could cause passes
muster,” Boasberg said.

Judicial Watch immediately appealed to the U.S. Court of
Appeals for the District of Columbia Circuit.

The case is Judicial Watch v. U.S. Department of Defense et
al in U.S. District Court for the District of Columbia, No.
11-cv-890.

(Reporting by Jeremy Pelofsky and James Vicini; editing by
Christopher Wilson)

(Reuters) – Wal-Mart Stores Inc may not find the math easy when it tries to assess the potential criminal liabilities from an alleged bribery scandal and possible cover-up at its Mexican unit.

Whether a potential settlement with U.S. authorities involves several hundreds of millions of dollars of penalties, or even billions, will likely depend on how many allegedly improper payments are eventually discovered and the extent of the alleged financial gain.

The formula used by prosecutors in crafting proposed penalties can also include subjective factors, such as how much the retailer cooperates with authorities and whether executives engaged in a wide-ranging scheme to hide the behavior from authorities.

Wal-Mart is under investigation over allegations its Mexican unit paid $24 million in bribes to accelerate its Latin American growth. The outcome of any potential government case will likely hinge on whether U.S. investigators – and Wal-Mart itself – uncover more alleged bribery around the world, as well as how aggressively prosecutors apply the provisions of U.S. anti-corruption law.

Wal-Mart, the world’s largest retailer, has said it is cooperating the with authorities investigating the allegations, which surfaced in a New York Times report on Saturday.

The company has not been charged with wrongdoing and it declined to comment on any potential legal liability.

On Tuesday, it announced it created a new global position to oversee its compliance with the U.S. Foreign Corrupt Practices Act, a law that forbids bribes to foreign officials.

While it is impossible to predict an exact dollar figure, 10 law professors and lawyers with experience prosecuting and defending against corporate bribery cases told Reuters that, if the allegations are true, Wal-Mart would almost certainly face steep fines.

The Justice Department can use subjective factors to determine whether to increase or decrease a penalty, including whether a company cooperated with the authorities, promptly fixed the problems and how high up the executive ladder the bad conduct went.

A Justice Department spokeswoman declined to comment on the Wal-Mart situation, as well as how the agency determines proposed penalties in FCPA cases.

EXECUTIVE CONDUCT

Much could hinge on how Wal-Mart executives responded to the bribery allegations. The Times said that, in 2005, some senior executives failed to report the bribes and even tried to cover them up. The newspaper also said current Wal-Mart Chief Executive Mike Duke and former CEO Lee Scott, who now sits on the company’s board, were among senior executives allegedly aware of the situation.

Large companies typically settle government allegations that they violated the FCPA, rather than risk defeat at trial. They can also face private action by shareholders, who can accuse directors and officers of breaching their duties or claim the stock price fell after allegations surfaced.

While the government typically assigns a company a “culpability score” that can translate into a specific penalty, when it comes to negotiating a settlement “it’s in the Justice Department’s complete discretion to pick a number,” said Mike Koehler, a professor at Butler University who runs the website FCPA Professor.

Wal-Mart has hired investigators to determine whether there were bribes in other places where it operates, such as China.

The company could face several hundreds of millions of dollars in penalties over alleged misconduct in Mexico, said Joseph Hoffmann, a professor at Indiana University’s Maurer School of Law. If widespread problems are uncovered, “then of course you could get into the billion dollar range” for possible penalties, he said.

A U.S. case against Germany’s Siemens AG could provide a guide for how a potential Wal-Mart case would play out. The engineering conglomerate paid $800 million to U.S. authorities in 2008, the single largest U.S. fine to date involving FCPA violations. Siemens also paid another $800 million to German authorities.

Siemens pleaded guilty in U.S. court to paying officials in Argentina, Bangladesh and Venezuela to gain lucrative government contracts. As with Siemens, the alleged conduct at Wal-Mart showed a pattern of corrupt behavior, rather than a series of incidents isolated to a handful of rogue employees, according to legal experts.

If the allegations involving the retailer prove to be true, “it looks like Wal-Mart Mexico was proceeding on a policy of paying people off; that’s what Siemens did too,” says Paul Enzinna, a lawyer at law firm Brown Rudnick in Washington, DC.

The Siemens case, however, involved much more money: the improper payments totaled some $1.8 billion. Siemens could have been fined as much as $2.7 billion under U.S. sentencing guidelines, but authorities agreed to a lower figure because the company helped with the investigation. That case has rolled on. Eight former executives were charged in December for their alleged roles in the scheme.

Siemens paid about 1.6 percent of its sales in global fines. If that percentage was applied to Wal-Mart, the Arkansas-based retailer could be on the hook for about $4.5 billion, UBS stock analyst Robert Carroll said in a research note on Wednesday.

However, legal experts say company sales are just one factor that would go into a possible fine.

“It’s a little bit of a black box,” said Amy Conway-Hatcher, a partner at law firm Kaye Scholer in Washington.

ESCALATING PENALTIES

U.S. authorities in recent years have escalated their attack on foreign bribery. Other big settlements were a $400 million pact with British military contractor BAE Systems Plc and a $185 million settlement with German luxury car maker Daimler, both in 2010.

Overall though, with dozens of settlements over the last several years, the average U.S. fine in foreign bribery cases is less than $25 million, according to a report by law firm Shearman & Sterling in January.

If the Justice Department pursues a case against Wal-Mart, it could rely on two provisions of the FCPA. It could bring charges of violating the statute’s anti-bribery provisions, the most common charge leveled against companies. The government can fine a company up to $2 million per violation of that provision.

While the New York Times reported that Wal-Mart’s Mexican unit was suspected of making some 441 improper payments, experts said that, if charges were brought, the company would likely negotiate an overall settlement instead of having to pay for each alleged violation.

Also under the FCPA, prosecutors could seek to bring charges that Wal-Mart violated provisions of the act centering on failure to keep adequate records. Siemens was the first company to plead guilty to violating that provision. That carries a potential fine of $25 million per violation.

Under another federal law, the Alternative Fines Act, prosecutors can ratchet up the punishment, allowing them to dock companies for twice the financial gain reaped from the alleged bribery.

If prosecutors determine that Wal-Mart paid bribes to get permits for earlier store openings in Mexico, it may be difficult to calculate the monetary gain, experts said.

In the most recent FCPA cases, companies have paid fines below the recommended guidelines, said Butler University’s Koehler.

Given Wal-Mart’s alleged misconduct and the potential precedent of such a high-profile case, however, “the DOJ would be hard-pressed to go below the range,” he added.

(Reporting By Jeremy Pelofsky in Washington and Carlyn Kolker in New York; additional reporting by Jessica Wohl in Chicago; editing by Martha Graybow and Andre Grenon)

(Reuters) – Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) may not find the math easy when it tries to assess the potential criminal liabilities from an alleged bribery scandal and possible cover-up at its Mexican unit.

Whether a potential settlement with U.S. authorities involves several hundreds of millions of dollars of penalties, or even billions, will likely depend on how many allegedly improper payments are eventually discovered and the extent of the alleged financial gain.

The formula used by prosecutors in crafting proposed penalties can also include subjective factors, such as how much the retailer cooperates with authorities and whether executives engaged in a wide-ranging scheme to hide the behavior from authorities.

Wal-Mart is under investigation over allegations its Mexican unit paid $24 million in bribes to accelerate its Latin American growth. The outcome of any potential government case will likely hinge on whether U.S. investigators – and Wal-Mart itself – uncover more alleged bribery around the world, as well as how aggressively prosecutors apply the provisions of U.S. anti-corruption law.

Wal-Mart, the world’s largest retailer, has said it is cooperating the with authorities investigating the allegations, which surfaced in a New York Times report on Saturday.

The company has not been charged with wrongdoing and it declined to comment on any potential legal liability.

On Tuesday, it announced it created a new global position to oversee its compliance with the U.S. Foreign Corrupt Practices Act, a law that forbids bribes to foreign officials.

While it is impossible to predict an exact dollar figure, 10 law professors and lawyers with experience prosecuting and defending against corporate bribery cases told Reuters that, if the allegations are true, Wal-Mart would almost certainly face steep fines.

The Justice Department can use subjective factors to determine whether to increase or decrease a penalty, including whether a company cooperated with the authorities, promptly fixed the problems and how high up the executive ladder the bad conduct went.

A Justice Department spokeswoman declined to comment on the Wal-Mart situation, as well as how the agency determines proposed penalties in FCPA cases.

EXECUTIVE CONDUCT

Much could hinge on how Wal-Mart executives responded to the bribery allegations. The Times said that, in 2005, some senior executives failed to report the bribes and even tried to cover them up. The newspaper also said current Wal-Mart Chief Executive Mike Duke and former CEO Lee Scott, who now sits on the company’s board, were among senior executives allegedly aware of the situation.

Large companies typically settle government allegations that they violated the FCPA, rather than risk defeat at trial. They can also face private action by shareholders, who can accuse directors and officers of breaching their duties or claim the stock price fell after allegations surfaced.

While the government typically assigns a company a “culpability score” that can translate into a specific penalty, when it comes to negotiating a settlement “it’s in the Justice Department’s complete discretion to pick a number,” said Mike Koehler, a professor at Butler University who runs the website FCPA Professor.

Wal-Mart has hired investigators to determine whether there were bribes in other places where it operates, such as China.

The company could face several hundreds of millions of dollars in penalties over alleged misconduct in Mexico, said Joseph Hoffmann, a professor at Indiana University’s Maurer School of Law. If widespread problems are uncovered, “then of course you could get into the billion dollar range” for possible penalties, he said.

A U.S. case against Germany’s Siemens AG could provide a guide for how a potential Wal-Mart case would play out. The engineering conglomerate paid $800 million to U.S. authorities in 2008, the single largest U.S. fine to date involving FCPA violations. Siemens also paid another $800 million to German authorities.

Siemens pleaded guilty in U.S. court to paying officials in Argentina, Bangladesh and Venezuela to gain lucrative government contracts. As with Siemens, the alleged conduct at Wal-Mart showed a pattern of corrupt behavior, rather than a series of incidents isolated to a handful of rogue employees, according to legal experts.

If the allegations involving the retailer prove to be true, “it looks like Wal-Mart Mexico was proceeding on a policy of paying people off; that’s what Siemens did too,” says Paul Enzinna, a lawyer at law firm Brown Rudnick in Washington, DC.

The Siemens case, however, involved much more money: the improper payments totaled some $1.8 billion. Siemens could have been fined as much as $2.7 billion under U.S. sentencing guidelines, but authorities agreed to a lower figure because the company helped with the investigation. That case has rolled on. Eight former executives were charged in December for their alleged roles in the scheme.

Siemens paid about 1.6 percent of its sales in global fines. If that percentage was applied to Wal-Mart, the Arkansas-based retailer could be on the hook for about $4.5 billion, UBS stock analyst Robert Carroll said in a research note on Wednesday.

However, legal experts say company sales are just one factor that would go into a possible fine.

“It’s a little bit of a black box,” said Amy Conway-Hatcher, a partner at law firm Kaye Scholer in Washington.

ESCALATING PENALTIES

U.S. authorities in recent years have escalated their attack on foreign bribery. Other big settlements were a $400 million pact with British military contractor BAE Systems Plc and a $185 million settlement with German luxury car maker Daimler, both in 2010.

Overall though, with dozens of settlements over the last several years, the average U.S. fine in foreign bribery cases is less than $25 million, according to a report by law firm Shearman & Sterling in January.

If the Justice Department pursues a case against Wal-Mart, it could rely on two provisions of the FCPA. It could bring charges of violating the statute’s anti-bribery provisions, the most common charge leveled against companies. The government can fine a company up to $2 million per violation of that provision.

While the New York Times reported that Wal-Mart’s Mexican unit was suspected of making some 441 improper payments, experts said that, if charges were brought, the company would likely negotiate an overall settlement instead of having to pay for each alleged violation.

Also under the FCPA, prosecutors could seek to bring charges that Wal-Mart violated provisions of the act centering on failure to keep adequate records. Siemens was the first company to plead guilty to violating that provision. That carries a potential fine of $25 million per violation.

Under another federal law, the Alternative Fines Act, prosecutors can ratchet up the punishment, allowing them to dock companies for twice the financial gain reaped from the alleged bribery.

If prosecutors determine that Wal-Mart paid bribes to get permits for earlier store openings in Mexico, it may be difficult to calculate the monetary gain, experts said.

In the most recent FCPA cases, companies have paid fines below the recommended guidelines, said Butler University’s Koehler.

Given Wal-Mart’s alleged misconduct and the potential precedent of such a high-profile case, however, “the DOJ would be hard-pressed to go below the range,” he added.

(Reporting By Jeremy Pelofsky in Washington and Carlyn Kolker in New York; additional reporting by Jessica Wohl in Chicago; editing by Martha Graybow and Andre Grenon)

If that seems like a lackluster enforcement record for a
president eager to look assertive on oversight of oil and
natural gas markets in an election year, it may be for good
reason.

Experts said there is little evidence of widespread
manipulation in these markets and, in any case, lawyers with
experience in the field said such cases are difficult to prove.

The administration on Thursday announced a $14 million
settlement with Dutch trading firm Optiver in an oil market
manipulation case, but that case had initially been brought in
2008 under the administration of President George W. Bush.

With energy markets in turmoil, the market-regulating U.S.
Commodity Futures Trading Commission under Bush from 2006 to
2008 brought more than a dozen energy market price manipulation
cases, according to a review by Reuters.

Asked by Reuters for recent cases alleging energy market
price manipulation, officials from the CFTC, the Federal Trade
Commission and the U.S. Justice Department turned up only one
case that has been brought under Obama.

The White House did not respond to a request for comment.
The FTC received specific new authority over manipulation of the
energy market in November 2009. The Justice Department said it
does not keep a detailed tally of its criminal cases.

The average U.S. gasoline price per gallon was nearly $4 in
early April, up about 25 cents from a year earlier, a jump that
ensures plenty of rhetoric from Democrats and Republicans for
months to come with the Nov. 6 elections approaching.

“It’s a very popular political issue … it’s always invoked
to blame complicated pricing issues on speculators,” said Glen
Donath, a partner at Katten Muchin Rosenman LLP in Washington.

“It also feels good to point to an easy fix under the
criminal laws, but the reality is they’re very hard to
prosecute,” said Donath, who has worked on such cases previously
and prior to that was a federal prosecutor.

A SINGLE CASE

Almost a year ago, the CFTC alleged that two oil traders and
their firms — James Dyer of Oklahoma’s Parnon Energy and
Nicholas Wildgoose of Europe-based Arcadia Energy — amassed and
sold off a substantial position in physical crude oil to
manipulate futures prices. The traders and their firms have
rejected the allegations and asked that the case be dismissed.

The judge in the case, William Pauley of Manhattan federal
court, heard arguments in December over a motion by the
defendants to dismiss the case and they are awaiting his ruling.

In 2009, the Obama administration settled a case that had
been brought under Bush involving collapsed hedge fund Amaranth
Advisors, for attempting to manipulate natural gas markets. The
firm paid a $7.5 million fine.

The CFTC on Thursday settled allegations that the
high-frequency trading firm Optiver Holding BV, two of its
subsidiaries and three traders engaged in manipulation and
attempted manipulation for crude oil, heating oil and gasoline.

As is typical in many such settlements, Optiver did not
admit or deny the allegations.

CFTC Chairman Gary Gensler, peppered by reporters at a CFTC
meeting on Wednesday about why the agency has not done more on
such cases, said that he only had six people for energy
oversight team. “This agency is so under-resourced,” he said.

On Tuesday, Obama said: “We can’t afford a situation where
speculators artificially manipulate markets by buying up oil,
creating the perception of a shortage, and driving prices
higher, only to flip the oil for a quick profit.”

He proposed that Congress increase criminal and civil price
manipulation penalties for individuals and firms to $10 million
from $1 million, and that in civil cases the defendant could be
forced to pay up to three times the losses to victims.

Additionally, under Obama’s proposal, penalties would be
assessed for each day of a violation, rather than per violation.

Mitt Romney, the expected Republican challenger in the
presidential election, has argued that Obama’s proposals would
lead to higher taxes and more costly energy regulation.

LIMITED OPTIONS

Obama has spoken out periodically trying to show he
understands Americans’ concerns about rising gasoline prices.
One drastic step he could take is to release oil from the
Strategic Petroleum Reserve, but such a move could open him up
to criticism that he was only doing it to win the election.

He also pushed this week for more funds for the agencies to
pursue manipulation cases, but sharp fiscal policy divisions in
Congress make it difficult to get approval for more funding.

The lack of cases under Obama comes despite new powers
approved in 2010′s Dodd-Frank banking and market reforms, which
expanded the definition of market manipulation.

“There have not been many, if any, CFTC cases establishing
manipulation of the crude oil futures market or the natural gas
futures market,” said Mark Young, a former CFTC assistant
general counsel from 1977 to 1982.

He said the CFTC and trading exchanges have been vigilant
and effective in safeguarding against trading manipulation.

“Given the absence of alleged futures price manipulation
generally, it is hard to see how increased penalties would deter
much misconduct,” said Young, now a partner at the law firm
Skadden, Arps, Slate, Meagher & Flom LLP in Washington.

The CFTC has noted that its overall enforcement actions, not
just in the oil and gas market, were up 74 percent in the fiscal
year that ended Sept. 30, 2011. The FTC refused to reveal the
size of its investigation team but said it had no recent cases.

BURDEN OF PROOF

Donath, the former federal prosecutor, said a key to
manipulation cases is proving the difference between speculation
and manipulation, as well as proving that a trader had the power
to move the price of the commodity. They are high thresholds to
meet.

During the Bush administration, the Justice Department
charged several BP traders with conspiring in 2004 to manipulate
and corner the propane market, but a federal judge a year later
dismissed the indictment against the traders.

BP entered a deferred prosecution agreement in 2007 and paid
$303 million in restitution and fines.

Obama last year also created a working group made up of
several federal agencies, including the FTC, Justice Department
and CFTC to improve their collaborative efforts to root out any
manipulation in the energy markets.

While members of those agencies have had a few meetings,
little has been heard or seen from it, though a report by the
FTC is expected soon.

Eveline Widmer-Schlumpf, who also holds the rotating post of
Swiss president, and U.S. Attorney General Eric Holder are
expected to meet on the sidelines of the International Monetary
Fund’s spring meetings in Washington which begin on Friday, the
sources said, as Switzerland seeks to end the long-running
dispute.

A global crackdown on tax evasion by cash-strapped
governments in recent years has chipped away Switzerland’s
tradition of banking secrecy, which helped it build up a $2
trillion offshore wealth management industry.

Eleven Swiss banks – including Credit Suisse and
Julius Baer – are under investigation by the United
States for aiding U.S. citizens suspected of dodging taxes.

Switzerland wants the investigations dropped, in exchange
for payment of fines and the transfer of names of thousands of
U.S. bank clients. It also wants a deal to shield the remainder
of its 300 or so banks from U.S. prosecution.

Berne has already taken steps to make sure its bank clients
pay their home country taxes and has struck deals with Germany
and Britain to allow citizens of those two countries to pay tax
without revealing their identities.

Widmer-Schlumpf has said she expects to find a solution with
the United States this year but said in an interview on Apr. 13
that Switzerland cannot make further concessions to the United
States.

In 2009, UBS paid a hefty fine and released the
names of 4,500 clients to U.S. officials, an agreement in which
then-Justice Minister Widmer-Schlumpf played a key role in
arranging.

A spokesman for the Swiss finance ministry declined to
comment on Widmer-Schlumpf’s plans while in Washington but said
ministers often held bilateral talks on the sidelines of the
summit.

A Justice Department spokeswoman also declined to comment.