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Andrew Weissmann On The FCPA – It Is “Very Easy For The People At The DOJ And SEC To Basically Impose A Tax For Doing Business” In Certain Countries

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One of more concerning aspects of the Foreign Corrupt Practices Act landscape is the extent to which current FCPA enforcement officials have articulated seemingly contradictory positions prior to or after their stint at the DOJ or SEC. For instance, see prior posts here (“A Former Enforcement Official Is Likely to Say (Or Has Already Said) the Same Thing”) and here (“In the FCPA Space, Who Speaks for Whom?”).

FCPA Professor was the first to highlight the seeming irony when vocal FCPA enforcement critic and reform advocate Andrew Weissmann was selected to head the DOJ’s fraud section in January 2015 and how Weissmann should have stayed true to his former self when unveiling the DOJ’s “FCPA Pilot Program” in April 2016.

Weissmann’s prior positions on the FCPA are nicely captured in a 2010 panel event in which he speaks at great length regarding various aspects of the FCPA.

As captured in this clip, Weissmann states his various criticisms of the FCPA and FCPA enforcement. Weissmann began by noting something that is “important to realize about the FCPA” and that is there is little caselaw. According to the Weissmann, the “problem” with this is that:

“The Department of Justice and SEC can in many circumstances be judge and jury in the sense that they’re interpretation of gray areas in the statute are going to govern.”

In the clip, Weissmann also advocates for a compliance defense, describes how the FCPA’s “foreign official” element is difficult to interpret, and calls for a revised intent standard relevant to business organizations.

Next, Weissmann presented a hypothetical of a company that takes FCPA compliance seriously and devotes resources to doing the right thing. According to Weissmann, a company like this that wants to do business in certain countries like China.

“is going to trip up on many of the provisions of the FCPA [and] will likely have an FCPA problem and it will make it very easy for the people in the DOJ and SEC to basically impose a tax for doing business in that country.”

As captured in this clip, Weissmann stated that “the grayness of a statute that is enforced against corporations is particularly heinous because there’s no way to actually have that litigated as a realistic matter.”

Some will discount Weissmann’s former forceful statements about the FCPA as being made on behalf of clients or business interests. One is certainly entitled to their opinion.

However, one of more concerning aspects of the FCPA landscape is the extent to which current FCPA enforcement officials have articulated seemingly contradictory positions prior to or after their stint at the DOJ or SEC. Such examples (and numerous others could also be cited) cause eyes to roll, foster cynicism, and lead some to reasonably believe that the current FCPA enforcement landscape is often little more than a game of gotcha.

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