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Checking In On Wal-Mart’s Pre-Enforcement Action Professional Fees And Compliance Enhancements

Wal-Mart

In its recent 2Q FY2018 earnings call presentation Wal-Mart disclosed $12 million in Foreign Corrupt Practices Act and compliance related expenses ($7 million for ongoing investigations and inquiries and $5 million for global compliance program and organizational enhancements). The Q2 expenses of $12 million compare to the following recent quarterly expenses (Q1 FY2018 $16 million; Q4 FY2017 $17 million; Q3  FY2017 $29 million; Q2 FY 2017 $28 million, and Q1 FY2017 $25 million).

Doing the math, Wal-Mart’s 2Q FY2018 FCPA and compliance-related costs is approximately $195,000 per working day.

Over the past 5 years, I have tracked Wal-Mart’s quarterly disclosed pre-enforcement action professional fees and expenses. While some pundits ridiculed me for doing so, it quickly caught on as the popular thing to do.

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The Chiquita Enforcement Action – A Bunch Of Bananas With A Slippery Origin

chiquita

[This post is part of a periodic series regarding “old” FCPA enforcement actions]

If you think strict liability enforcement of the FCPA books and records and internal controls provisions is a recent invention, think again.

If you think off-the-rails FCPA enforcement (that is enforcement theories seemingly in conflict with actual legal authority) is a recent invention, think again.

A dubious FCPA enforcement action occurred in 2001 when the SEC announced this administrative cease and desist order finding that Chiquita Brands International Inc. violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act.

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Vantage Drilling Announces Closure Of DOJ Investigation, Just Don’t Call It A “Declination”

Vantage

I hope the usual suspects don’t muddy up the conversation again by calling this one a “declination.” (See here for the recent post).

As highlighted in this August 2015 post, Houston-based Vantage Drilling disclosed:

“In July 2015, we became aware of media reports that our agent utilized in the contracting of the Titanium Explorer drillship has entered into a plea arrangement with the Brazilian authorities in connection with the agent’s role in obtaining bribes on behalf of former Petrobras executives.  We have since confirmed that our agent, who has represented multiple international companies in their contracts with Petrobras, has entered into such discussions and provided evidence to the Brazilian authorities of an alleged bribery scheme between the former Petrobras executives and a former director of Vantage.

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FCPA Flash – A Conversation With Neil Smith (Former Senior Counsel In The SEC’s Enforcement Division) About SEC FCPA Enforcement

FCPA Flash

The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Neil Smith. On July 14th, Smith left the SEC where he served as senior counsel in the Enforcement Division for more than six years and where he was also a member of the SEC’s FCPA Unit. In the podcast, Smith (currently a partner in the Boston office of K&L Gates) discusses SEC remedies in FCPA enforcement actions, the SEC’s theory of enforcement around the FCPA’s internal controls provisions, the impact of the Supreme Court’s recent Kokesh decision on SEC FCPA enforcement, and changes to the FCPA and FCPA enforcement that he would like to see.

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“Domestic Workers Who Have No Involvement In Foreign Sales Probably Don’t Need Training In The FCPA” – WRONG!

Wrong

Navex Global claims to be the “ethics and compliance experts” and offers training courses that presumably seek to minimize a business organization’s FCPA risk.

However, in this recent post Navex asserts that “domestic workers who have no involvement in foreign sales probably don’t need training in the FCPA.”

This assertion is wrong on so many levels and if followed actually increases – not decreases – a business organization’s FCPA risk.

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