The U.S. Department of Justice (DOJ) Criminal Division’s Fraud Section issued a declination letter regarding its investigation of Liberty Mutual Insurance Company for alleged violations of the Foreign Corrupt Practices Act (FCPA) on Aug.7, 2025. Despite evidence of bribery by Liberty Mutual’s Indian subsidiary, the DOJ declined to prosecute — underscoring the value of proactive compliance, robust internal controls and prompt remediation for organizations operating in high-risk jurisdictions.

This is the first publicly announced corporate resolution involving foreign bribery allegations since the DOJ resumed certain overseas corruption probes earlier this year. In February, President Donald Trump issued an executive order halting new FCPA cases, followed by DOJ guidance narrowing the scope of such investigations. However, the Liberty Mutual matter signals that white-collar prosecutors still retain some discretion to pursue cases involving U.S.-headquartered multinationals when warranted.

Moreover, after months of uncertainty over the practical impact of the executive order, the Liberty Mutual declination letter closely resembles the structure of the DOJ’s most recent published declination, issued in August 2024 in connection with the Boston Consulting Group’s Portugal office and alleged misconduct involving public officials in Angola.

Summary

• Misconduct Identified: Liberty Mutual’s Indian subsidiary, Liberty General Insurance (LGI), paid approximately $1.47 million in bribes to officials at six state-owned banks in India between 2017 and 2022. These payments, disguised as marketing expenses and routed through intermediaries, resulted in $9.2 million in revenue and $4.7 million in profits for LGI.
• Concealment Efforts: Employees involved deliberately misclassified payments to obscure their true nature.

Key Factors

The DOJ based its decision to decline prosecution on several critical factors:

• Voluntary Self-Disclosure: Liberty Mutual promptly and voluntarily disclosed the misconduct to the DOJ in March 2024, even as its internal investigation was ongoing.
• Full Cooperation: The company provided all relevant facts, including the identification of individuals involved, and committed to ongoing cooperation with the government.
• Comprehensive Remediation: Liberty Mutual conducted a thorough root-cause analysis, separated from implicated personnel, and implemented significant enhancements to its compliance program and internal controls including:
  • Strengthened vetting, monitoring and oversight of third-party payments globally
  • Structural reorganization and increased compliance resources
  • Enhanced policies governing the use of social media and ephemeral messaging for business purposes
• Disgorgement of Profits: Liberty Mutual agreed to disgorge $4.7 million, representing profits from the misconduct.
• Absence of Aggravating Circumstances: There was no evidence of systemic managerial involvement or recidivist behavior.

Actionable Takeaways

For corporate counsel, compliance officers and executives — particularly in the financial sector — this declination provides a clear roadmap for mitigating FCPA and anti-corruption risks.

1. Prioritize Timely Self-Disclosure
   • Establish clear internal reporting channels and encourage prompt escalation of potential misconduct.
   • Consider voluntary self-disclosure as soon as credible issues are identified.
2. Strengthen Internal Investigations and Cooperation
   • Maintain robust protocols for internal investigations, ensuring all relevant facts are gathered and preserved.
   • Be prepared to cooperate fully with regulators, including providing access to individuals and documentation.
3. Enhance Third-Party Due Diligence and Oversight
   • Implement risk-based due diligence procedures for all business partners, with heightened scrutiny in high-risk jurisdictions.
   • Monitor and review all payments to third parties, especially those classified as marketing or service expenses.
4. Tighten Controls Around Payment Processes
   • Require dual-approval for high-risk or unusual transactions.
   • Use forensic monitoring to detect improper payment classifications and potential round-tripping schemes.
5. Expand Compliance Resources and Update Policies
   • Invest in compliance personnel and leverage technology to detect misconduct.
   • Update policies to address the use of unofficial communication channels for business purposes.
6. Conduct Regular Root-Cause Analyses and Remediation
   • After any incident, perform a thorough review to identify control failures.
   • Take swift, visible action against those involved and remediate business practices accordingly.

Conclusion

The DOJ’s declination in the Liberty Mutual matter reinforces the value of transparency, immediate remediation, and a strong compliance culture. It also marks a significant moment in the post-policy-shift enforcement landscape, illustrating that even under a narrowed approach, DOJ remains willing to take some action on foreign bribery allegations involving U.S. multinationals.

Organizations should use this case as a benchmark to assess and enhance their own anti-corruption programs, particularly when operating in high-risk markets, such as India, as well as other jurisdictions across Asia, Africa, and Latin America. Proactive measures and a commitment to ethical conduct remain the most effective safeguards against regulatory and reputational risk.