Checking In On The Smartmatic Action

Key Takeaways

• Smartmatic faces first criminal FCPA indictment since 2010
• Company filed motion to dismiss, citing vindictive, selective prosecution
• Superseding indictment shifts focus from contract award to payment collection
• Depositions of COMELEC officials confirm bidding process was transparent
• SGO added as defendant, yet to conduct its own depositions

Pulse Analysis

The October 2025 indictment of Smartmatic revives a rare criminal approach to the Foreign Corrupt Practices Act, a tool last used against a corporation in 2010. Prosecutors allege a scheme to manipulate payments tied to three election‑service contracts in the Philippines, but the superseding indictment narrows the accusation to the improper collection of milestone and value‑added tax (VAT) payments after contracts were awarded. This strategic pivot reflects a broader trend of U.S. authorities focusing on post‑award financial flows, a gray area that many multinational technology providers may overlook in their compliance programs.

Smartmatic’s motion to dismiss on grounds of vindictive and selective prosecution underscores the growing tension between aggressive enforcement and corporate defense strategies. If the court rejects the motion, the case could set a precedent for criminal liability even when the alleged misconduct centers on payment handling rather than direct bribery. Companies operating in emerging markets must therefore reassess risk assessments, ensuring that not only bid‑award processes but also downstream payment mechanisms are rigorously monitored and documented.

The pre‑trial depositions of COMELEC officials, who affirmed the transparency of the bidding process, add a nuanced layer to the litigation. While these testimonies weaken the original narrative of contract‑award corruption, they do not address the later alleged misuse of payments, leaving the core dispute unresolved. The addition of SGO as a defendant, without yet having taken depositions, further complicates the defense. Stakeholders should watch the court’s forthcoming rulings, as they will likely influence future FCPA enforcement tactics and the compliance postures of firms engaged in international election‑technology contracts.