The day after Labor Day has always seemed like a second New Year. In that spirit, let’s kick off the “new year” with some big-picture thoughts on why this new era of FCPA enforcement matters.
Because the DOJ has created – through use of non-prosecution and deferred prosecution agreements – an alternative justice system whereby FCPA enforcement theories are shielded from judicial scrutiny in all but the rarest of situations and whereby FCPA enforcement actions are often resolved for business reasons not necessarily legal reasons.
Because this alternative justice system facilitates both the under-prosecution of egregious instances of business bribery as well as the over-prosecution of business conduct.
Because this alternative justice system often results in FCPA prosecutorial common law, not legal authority.
Because quantity of FCPA enforcement actions seems to be valued more by political actors, monitoring groups and civil society than quality of FCPA enforcement actions.
Because other countries are increasingly modeling enforcement of their FCPA-like laws on the U.S. approach.
Because in the rare instances in which the enforcement agencies are put to their ultimate burdens of proof, more often than not, the enforcement agencies do not prevail.
Because over 35 years after enactment of the FCPA there is more bribery and corruption (in the eyes of the enforcement agencies) than ever before even though FCPA compliance is at an all-time high.
Because the current enforcement climate and enforcement agency policies do not create the right positive incentives for companies in that a company’s good faith compliance investment is not properly recognized.
Because the enforcement agencies have unique internal policies which vest FCPA enforcement authority in the hands of a few people and these same people who helped contribute to this new era of FCPA enforcement are now making millions in the private sector providing FCPA defense and compliance services.
Because companies subject to FCPA scrutiny are spending $1.3 million per working day on pre-enforcement action professional fees and expenses and because such fees and expenses typically greatly exceed enforcement action fine and penalty amounts.
Because plaintiff’s law firms representing shareholders latch on to instances of FCPA scrutiny and often bring parasitic FCPA-related civil claims.
Because FCPA prosecutorial common law is increasingly being used offensively to accomplish a business purpose or advance a litigating position.
Because FCPA enforcement has turned into a boondoggle for many involved.
Because there is a glaring double standard between enforcement of the U.S. domestic bribery statute and the FCPA.
Because a meaningful, issues-based public policy debate as to this new era of FCPA enforcement was short-circuited by the enforcement agencies’ political posturing in regards to the FCPA Guidance.
Because more people are starting to pay attention.