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Time Out – The Obama DOJ Invented “Declinations With Disgorgement,” Drafted The Boilerplate Language, And Used NPAs 22 Times

TIme Out

Some FCPA commentators are either lacking in historical perspective or just spinning narratives to fit their beliefs.

Either one is troubling and from time-to-time someone in the FCPA space has to call a time-out.

This recent post from Matt Kelly who runs a site called Radical Compliance takes issue with the two DOJ corporate FCPA enforcement announced thus far in the Trump administration. Nothing wrong with this as FCPA Professor covered the Linde Gas and CDM Smith “declination with disgorgement” enforcement actions as well (see here, here, here and here for prior posts). And to be sure, I’ve criticized these form of FCPA resolution vehicles invented by the Obama DOJ (see here) as well as non-prosecution agreements used by the Obama DOJ to resolve alleged instances of corporate FCPA liability. In fact, I’ve long argued that NPAs (and DPAs) should be abolished in the FCPA context.

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Friday Roundup

Roundup

Quotable, FCPA issues at City Hall, and for the reading stack. It’s all here in the Friday roundup.

Quotable

In this recent post titled “Judicial Scrutiny of Corporate Monitors: Additional Uncertainty for FCPA Settlements?” Debevoise attorneys Andrew Levine, Philip Rohlik and Michael Gramer note:

“Like many other complex corporate criminal matters, FCPA matters largely get resolved without meaningful judicial oversight. […] In complex cases, corporate criminal enforcement can follow the largely consensual process that has evolved in the FCPA arena.  After a long period of investigation, in which a company often cooperates, the company and DOJ negotiate a resolution, based on legal theories and facts largely determined by the DOJ.

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Issues To Consider From The CDM Smith Enforcement Action

Issues

This previous post highlighted the DOJ’s recent Foreign Corrupt Practices Act enforcement action against CDM Smith Inc. Pursuant to a so-called “declination” with disgorgement, CDM Smith agreed to disgorge approximately $4 million based on DOJ findings “that CDM Smith, through its employees and agents, and those of its wholly owned subsidiary in India paid approximately $1.18 million in bribes to government officials in India in exchange for highway construction supervision and design contracts and a water project contract…”.

This post highlights additional issues to consider.

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DOJ Quietly Releases Another “Declination With Disgorgement” – This One $4 Million Regarding CDM Smith Inc.

cdmsmith

Those who were predicting that FCPA enforcement would wane in a Trump administration were encouraged to take a deep breath. (See here for the prior post). Among other things, it was noted that “if you believe that FCPA enforcement will decline in a Trump administration then you presumably must think that the DOJ and the SEC will start refusing to “process” corporate voluntary disclosures” (the single largest source of corporate FCPA enforcement actions).

Here is a fact to contemplate. The number of DOJ corporate FCPA enforcement actions in the first five months of the Trump administration (2 – both originating from corporate voluntary disclosures) equals the number of DOJ corporate FCPA enforcement actions in 2015 (2).

Yesterday, the DOJ once again quietly updated its FCPA Pilot Program “declinations” page to release this June 21st letter agreement addressed to Nathaniel Edmonds (Paul Hastings) counsel for CDM Smith Inc. (“CDM Smith”), a privately held engineering and construction firm incorporated and headquartered in Boston, Massachusetts.

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Issues To Consider From The Linde Enforcement Action

Issues

This previous post highlighted the DOJ’s recent $11.2 million declination with disgorgement and forfeiture against Linde for nearly decade-old conduct of an acquired entity.

This post continues the analysis by highlighting additional issues to consider.

Voluntary Disclosure

Nearly all decisions to voluntary disclose should be questioned (see this article for the reasons why), but Linde’s decision to voluntarily disclose should seriously be questioned.

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