Wednesday, January 20, 2021

Moroccan Army Opens Investigation Into Fresenius Bribery Scandal

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The Moroccan army has opened an investigation to look into instances of bribery by Fresenius Medical Care between 2006 and 2012, said the major general of the Moroccan Royal Armed Forces (FAR) on Friday.

The investigation will involve hearings of all those involved in the case, including a doctor who worked in the military health service at the time. According to FAR, the investigation is acting on the presumption that the corrupt acts would have tainted public markets.

The decision to open an investigation comes after a report published by the United States justice department on March 29 which announced that Fresenius would pay approximately $231 million to the US government in a settlement in response to accusations that the company had bribed officials in numerous countries to secure contracts.

Fresenius paid over $84.7 million to the justice department as a penalty to keep the department from prosecuting and another $147 million to the US Security and Exchange Commission to settle civil charges.

The US found Fresenius to have violated the Foreign Corrupt Practices Act (FCPA) by participating in corrupt schemes to obtain business in 13 countries, including Morocco, Angola, Saudi Arabia, Turkey, and Spain. The company profited from illegal activities by more than $140 million.

In addition to paying $231 million, as part of the settlement, Fresenius admitted to bribing officials in foreign countries from 2006 to 2012 as well as failing to maintain proper internal accounting controls.

“We are pleased to have concluded these investigations and to have resolved the issues that we identified and voluntarily disclosed to the U.S. authorities,” said Fresenius CEO Rice Powell in a statement.

In Morocco, Fresenius bribed state officials to obtain a contract to develop kidney dialysis centers at Moroccan state-owned military hospitals. Fresenius paid the bribes through a sham commission which promised 10% the contracts’ value to relevant state officials. The company disguised the payouts as bonuses to Fresenius employees.

According to US court documents, a “top executive of FMC Morocco” and a “Moroccan official nephrologist” are guilty of developing the circuit of corruption which allowed for the bribery to occur.

Although the US documents do not mention the officials by name, a Le Desk investigation pointed to Zouhir Oualim as the military official. Professor Zouhir Oualim, who has since left the army for the private sector, was the head of the nephrology department at Rabat Military Hospital at the time and in charge of developing the project with Fresenius.

The FAR’s investigation will look into the individual’s alleged involvement through its hearings. As of yet, it is unclear what actions FAR or the Moroccan government will take if their investigations reveal the same corruption found by the US justice department.

For their part, Fresenius has agreed to retain an independent monitor for a minimum of two years to prevent future corruption.

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