Federal authorities have opened a bribery investigation into whether JPMorgan Chase hired the children of powerful Chinese officials to help the bank win lucrative business. The Foreign Corrupt Practices Act, is a 1977 federal law that bans United States companies from giving “anything of value” to a foreign official to win “an improper advantage” in retaining business. http://dealbook.nytimes.com/2013/08/17/hiring-in-china-by-jpmorgan-under-scrutiny/?hp&_r=0  The bank hired the son of a former Chinese banking regulator who is now the chairman of the China Everbright Group, a state-controlled financial conglomerate, and after the chairman’s son came on board, JPMorgan secured multiple coveted assignments from the Chinese conglomerate, including advising a subsidiary of the company on a stock offering.
The Hong Kong office of JPMorgan also hired the daughter of a Chinese railway official. That official was later detained on accusations of doling out government contracts in exchange for cash bribes.
The China Railway Group, a state-controlled construction company that builds railways for the Chinese government, was in the process of selecting JPMorgan to advise on its plans to become a public company, a common move in China for businesses affiliated with the government. With JPMorgan’s help, China Railway raised more than $5 billion when it went public in 2007.
JPMorgan routinely hired young associates who hailed from well-connected Chinese families that ultimately offered the bank business.

Western companies have been aggressive in trying to snag a share of riches in China’s fast-growing economy in recent years. Some have come under fire over their business practices there, including GlaxoSmithKline, whose employees are said by Chinese officials to have confessed to bribing doctors to increase pharmaceutical sales. Global companies also routinely hire the sons and daughters of leading Chinese politicians. What is unusual about JPMorgan is that it hired the children of officials of state-controlled companies.

In 2012, JPMorgan was the only bank hired to advise China Everbright International, a subsidiary focused on alternative energy businesses, on a $162 million sale of shares, according to Standard & Poor’s Capital IQ, a research service. JPMorgan, according to securities filings, owns a stake in the subsidiary.

The same year, JPMorgan guided China Everbright through its role in what was, according to Dealogic, the largest-ever private equity deal in China. The deal involved reshaping Focus Media, a digital advertising firm, into a private company owned, in part, by China Everbright.