US Companies Dealing In India Sweltering Under The Heat With 300% Penalty Imposed By The United States Department Of Justice. Why Can The Indian Babus Still Be Bought?

Looks like bribery scandals are making headlines again, but this time the American authorities are cracking down on their own firms caught in similar acts in India. To dodge prosecution, many US companies have shelled out massive fines—over 300% of the bribe amounts in some cases.

The U.S. Department of Justice recently indicted the Adani Group for allegedly bribing $265 million to various solar energy companies in India, following the same footsteps several US based firms that were caught opted to pay hefty fines—often more than triple the bribe amount—to settle cases and avoid prosecution.

1) Moog Inc.

The U.S.-based research and design firm Moog Inc. was found guilty of bribing over half a million dollars to Hindustan Aeronautics Limited (HAL), South Central Railway, and the Research Designs and Standards Organisation (RDSO) under India’s Ministry of Railways.

Here’s how it played out – 

South Central Railway: In 2020, Moog Inc., through its Indian subsidiary Moog Motion Controls Private Limited (MMCPL), secured a $34,323 contract. The SEC order revealed that Moog’s Agent A facilitated bribes to government officials to eliminate competition, recording the payments as “legitimate contractor services.” A 10% commission was paid as bribes in this deal.

Hindustan Aeronautics Limited (HAL): In 2021, Moog bagged a $1.39 million contract. Investigators found that 2.5% of this amount went as bribes to a HAL official.

In total, Moog Inc. paid over $500,000 in bribes to secure contracts in India. To avoid prosecution, the company settled the case with the SEC by paying $1.68 million.

2) Oracle Corporation

Oracle’s troubles aren’t new, but they keep getting bigger. According to the SEC, the IT giant bribed $6.8 million to officials in India, the UAE, and Turkey.

Indian Railways: Oracle India employees used an “excessive discount scheme” in a transportation deal involving the Indian Ministry of Railways. A spreadsheet revealed that $67,000 was earmarked for bribing a specific State-Owned Entity (SOE) official.

The Outcome: Oracle settled the case by paying $23 million to the U.S. Treasury.

3) Albemarle Corporation

The chemical manufacturing giant Albemarle Corporation bribed Indian Oil Corporation (IOC) officials and others in Indonesia and Vietnam, totaling $63.5 million.

Indian Oil Corporation: Between 2009 and 2011, Albemarle paid $1.14 million in commissions to Indian intermediaries, raking in $11.14 million in profits. These bribes helped remove the company from IOC’s “Holiday List.”

The Penalty: Albemarle settled with the Department of Justice in September 2023, paying a staggering $198 million fine to avoid prosecution.

The SEC’s detailed orders also spotligt the lengths companies went to secure these contracts –

–Moog Inc.’s bribes were funneled through its Indian subsidiary to bag contracts with HAL and Indian Railways.

–Oracle Corporation’s “discount schemes” served as a cover for bribing officials in India, the UAE, and Turkey.

–Albemarle’s payments to intermediaries ensured they stayed in the game, despite being flagged by IOC.

So lets see how the numbers stack up –

Moog Inc.: Bribed over $500,000, settled for $1.68 million.

Oracle Corporation: Bribed $6.8 million, paid $23 million to settle.

Albemarle Corporation: Bribed $63.5 million, settled for $198 million.

When Corporations and Bureaucrats Collude Emerges The Shadowy World of Bribes and Mega Projects

In the game of mega projects, where billions of dollars are at play, the unholy nexus between corporations and bureaucrats—often referred to as “the babus” in India—is no secret.

Bribery, backdoor dealings, and unethical practices are rampant, creating a shadow economy that operates in parallel to the official systems. While this phenomenon is most visible in non-Western countries, where institutional checks are weaker, Western nations aren’t entirely immune to the allure of corruption.

Mega projects—whether in infrastructure, defense, or energy—require approvals, licenses, and clearances that can take years under normal bureaucratic processes. Corporations eager to fast-track these projects or edge out competitors often resort to greasing the wheels.
Bureaucrats, in turn, use their power and position to extract monetary or non-monetary benefits.

In India, for example, cases of bribery in public sector undertakings like Indian Railways, Hindustan Aeronautics Limited (HAL), and Indian Oil Corporation (IOC) have surfaced repeatedly.

The recent revelations about U.S.-based firms like Moog Inc., Oracle Corporation, and Albemarle Corporation bribing Indian officials only show how deeply entrenched corruption is in the system.

These companies paid bribes to bag lucrative contracts, from defense supplies to energy deals, and even to remove themselves from “blacklists” like IOC’s infamous “Holiday List.” The numbers are staggering—Albemarle alone paid $63.5 million in bribes to secure deals in India, Indonesia, and Vietnam.

Not Just a Non-Western Problem

While corruption in mega projects is often associated with non-Western countries, Western nations aren’t immune. The difference lies in the mechanisms of exposure and accountability. In the U.S. and Europe, robust investigative agencies like the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) actively pursue such cases, as seen in the penalties levied on companies like Oracle and Moog.

However, these exposures also reveal the hypocrisy of Western corporations. Despite their claims of adhering to global ethical standards, many engage in corrupt practices abroad, particularly in countries where enforcement is lax, and bribery is often seen as “business as usual.”

Why Is Corruption So Rampant?

In non-Western countries, weak oversight mechanisms and lack of transparency make it easier for corruption to thrive.

Governments in developing nations often prioritize mega projects as symbols of progress, perhaps its a way of showing not only within the country but also to the world at large the excellent ‘report card’ but dig deeper and it reveals the the fertile grounds for bribery. This phenomenon gets even more important as elections can be swayed and won basis these ‘false’ report cards.

On the other hand, companies seeking higher margins and faster approvals find bribery a convenient shortcut and as seen here, even when caught, corporations often escape with fines, which are a small price to pay compared to the profits they generate.

The Indian Case

India presents a textbook example of how corruption seeps into the highest levels of governance and business. From defense contracts to infrastructure projects, the story is the same: corporations pay bribes to win tenders, while bureaucrats and politicians take their cut.

The issue isn’t limited to foreign companies. Indian corporations are equally complicit, perpetuating a culture of “you scratch my back, I scratch yours.” This culture inflates project costs, and undermines the very idea of meritocracy and should be enough to erode public trust but has it?

The willingness of large corporations to engage in corrupt practices raises serious questions about their commitment to ethical business.

While they often tout their Corporate Social Responsibility (CSR) initiatives and adherence to Environmental, Social, and Governance (ESG) standards, their actions tell a different story.

Bribery scandals expose a corporate culture that prioritizes profits over principles. They also reveal how multinational corporations exploit systemic weaknesses in developing nations to their advantage, perpetuating cycles of corruption and inequality.

The Last Bit

The collusion between corporations and bureaucrats in mega projects hardly raises eyebrows anymore and while the problem is more visible in non-Western nations, Western corporations are far from innocent – it’s clear that corruption doesn’t come cheap.