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Last Stop on the Gravy Train (2 of 2)

Writer's picture: Dave LeeDave Lee
Train Station w/ train

For James Stevens, the former supervisor at Philadelphia’s mass transit system who admitted to taking bribes over many years, a 37-month prison sentence marks a sad end to a 45-year career. He will also lose his pension, which would have paid $6,000 monthly.


Robert Welsh, who owned the company that gave the bribes, is scheduled to be sentenced on July 18. But his dealings with law enforcement may not be over.


It will be interesting to see if officials in Canada, which had recently been called out by the OECD for scant enforcement of its foreign bribery laws, examine or prosecute the British Columbia-based company that ultimately purchased the Welsh’s company. Stevens is alleged to have arranged the sale in 2018, after being frustrated with his inability to extract further bribes from Welsh.


Officials may wish to consider why Stevens was involved at all, and whether the US $300,000 price reflects fair market value (a low price may be a red flag for improper kickbacks). In particular, while the buyer’s audited financial statements list the assets that were considered in the price, that breakdown does not include any value attributable to contracts worth about $1.34 million that came with the sale. The buyer won another contract with the transit system just a few months later, in addition to a purchase order worth about $1.1 million – an amount large enough to make up roughly 20% of the prior year’s total revenues. The size and timing of these awards begs the question of just what Stevens and the purchasing company discussed in their arrangement.


While Canada’s Corruption of Foreign Public Officials Act does not have corporate strict liability in the form of a “failure to prevent bribery” offence (as in the U.S., U.K., and Australia), it does have a books and records provision prohibiting accounting practices intended to conceal corrupt practices. In addition, corporate liability attaches when a “senior officer” knows about, or is part of, the offense.


When Welsh sold his company in 2018, the buyer hired him on to be part of its “management team.”


As for Stevens, it’s not clear whether he will be able to hear the SEPTA trains from his prison cell.



This is the second of the “Last Stop on the Gravy Train” series. Click here to view the first post.



FCPA Compliance Consultant,

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