Deferred prosecution and non-prosecution agreements of course are not unique to Foreign Corrupt Practices Act enforcement. However, year-after-year the most prominent use of NPAs and DPAs tends to be in connection with FCPA enforcement. (See here for Gibson Dunn’s useful summary of NPAs and DPAs).
Thus, last week’s introduction of H.R. 4540 “Accountability in Deferred Prosecution Act of 2014” by Representative Bill Pascrell (D-NJ) is relevant to FCPA enforcement.
In short, the bill provides, among other things, as follows.
“In order to promote uniformity and to assist prosecutors and organizations as they negotiate and implement deferred prosecution agreements and nonprosecution agreements, the Attorney General shall, not later than 90 days after the date of the enactment of this Act, issue public written guidelines [concerning a variety of issues] for deferred prosecution agreements and nonprosecution agreements.”
I have long called for NPAs and DPAs to be abolished in the FCPA context so long as such reform is coupled with a compliance defense. (See here and here). Thus, I do not believe that H.R. 4540 goes far enough in reining in the alternate world that the DOJ has created and championed through frequent use of NPAs and DPAs. However, H.R. 4540 highlights that Congress need not be a “potted plant” when it comes to how DOJ resolves alleged instances of corporate crime.
H.R. 4540 is not the first time that Representative Pascrell has introduced the “Accountability in Deferred Prosecution Act.” See here for a similar bill introduced in 2009.
Last week, Ralph Nader, Public Citizen and the Center for Corporate Policy sent this letter to Attorney General Eric Holder urging the Justice Department to prepare an annual report and public database on corporate crime. The letter states:
“Currently, the DOJ does not compile comprehensive data on corporate crime. This is a notable oversight. It is as if the Department of Education had no measures for how well our children learn, or if the U.S. Department of Agriculture had no idea of how much wheat or corn our farmers grew. The failure to measure can lead to sloppy thinking, bad decisions and entrenched neglect. We urge the DOJ to equip itself with the power afforded by measurement and data analysis.”
The letter further states:
“The DOJ should also issue an annual report on corporate crime. At a minimum, the report should provide an estimate of the total annual cost of corporate crime in the United States. It should include not only costs of crimes committed by individuals against businesses and investors (white collar crime), but also the costs that corporate crime imposes on the rest of society, such as the trillions of dollars lost, and millions of Americans who lost their jobs, due to the mortgage fraud-induced financial crisis of 2008-9. The report should present an analysis of trends in corporate crime and an explanation of the relative effectiveness of different sanctions. While the UCR [Uniform Crime Reporting Program] does measure certain forms of white collar crime, it is far from a thorough treatment of corporate crime. The DOJ’s annual corporate crime report should also tally data about prosecutions. This should include the number of cases referred to U.S. attorneys for prosecution each year by the FBI or other federal and state agencies, as well as the status and ultimate disposition (i.e. how many referrals were prosecuted; how many prosecuted were found guilty; how many settled with deferred and non prosecution agreements; the magnitude and kind of penalties involved; how many cases settled).”
Readers likely know that the DOJ and SEC have FCPA specific websites (here and here); however both websites are incomplete in certain respects. For instance, the DOJ website does not contain several FCPA enforcement actions (I recently requested information from the DOJ concerning the following FCPA enforcement actions: U.S. v. UNC/Lear Services and U.S. v. Litton Applied Technology Division).
As relevant to the above letter to Attorney General Holder and as this previous post highlighted, the DOJ does not even know whether NPAs and DPAs deter future conduct in the FCPA context. In response to an OECD question concerning deterrence, the DOJ merely stated:
“Scholars have recognized that quantifying deterrence is extremely difficult. This is equally true for the deterrent effect of DPAs and NPAs. Thus, as discussed at the time this recommendation was made, measuring ‘the impact of NPAs and DPAs in deterring the bribery of foreign public officials’ would be a difficult task, save providing certain anecdotal and other circumstantial evidence.”