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The DOJ (And U.K. SFO) Are “Shooting Themselves In The Foot”

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Both the Department of Justice and the Serious Fraud Office in the U.K. want companies to voluntarily disclose conduct that implicates the Foreign Corrupt Practices Act and/or Bribery Act. Notwithstanding the DOJ slapping a formal title on its policy goal in April 2016 (i.e. the FCPA Pilot Program), this has long been the articulated policy position on both sides of the Atlantic for nearly a decade.

Why then are the DOJ and SFO shooting themselves in the foot by making decisions that should result in any board member, audit committee member, or general counsel informed of current events not making the decision to voluntarily disclose?

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DOJ Deputy Assistant Attorney General McFadden Delivers The FCPA Script

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One can predict with a high degree of certainty what high-ranking DOJ officials will say about the Foreign Corrupt Practices Act before even hearing or reading the speech (and I say that based on highlighting on these pages over 100 FCPA enforcement agency speeches since 2009).

The script goes like this: the DOJ places a high-priority on FCPA enforcement as well as transparent enforcement; the DOJ is committed not just to corporate enforcement, but holding individuals accountable as well; and companies benefit from voluntary disclosure and cooperation.

New DOJ Deputy Assistant Attorney General Trevor McFadden delivered the script recently in this speech. However, if you want to know how McFadden really feels about DOJ enforcement of the FCPA you might want to review his recent writings on the topic highlighted in this recent post.

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DOJ Highlights 11 Factors Relevant In Evaluating A Corporate Compliance Program

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Last week the DOJ released this document highlighting 11 factors relevant in evaluating a corporate compliance program.

The factors should be familiar to compliance professionals well-versed on best-practices policies and procedures (whether in the FCPA context or otherwise) and there is really nothing new about the document (indeed the document cites to sources long in the public domain). Yet the document, the origins and purpose of which are not known, was released by a “new” DOJ with new leadership and is thus worthy of highlighting.

Organizing the existing body of best practices in one document is all fine and dandy. The more important question however is what should happen if a business organization acts consistent with the factors but an employee nevertheless exposes the entity to legal liability. Consistent with the FCPA-like laws of many peer countries, this should be relevant as a matter of law and not merely in the opaque, inconsistent, and unpredictable world of DOJ decision making. (See here).

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DOJ Individual Actions: The Strange Public – Private Divide

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This recent post highlighted certain facts and figures regarding the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2016 and historically.

As highlighted in the prior post, DOJ FCPA individual enforcement actions are significantly skewed by a small handful of enforcement actions and the reality is, despite the DOJ’s rhetoric, 77% of DOJ corporate enforcement actions since 2006 have not (at least yet) resulted in any DOJ charges against company employees.

Another very interesting and significant picture emerges when analyzing DOJ individual FCPA prosecutions based on whether the individual charged was employed by or otherwise associated with a publicly traded corporation or a private business organization.

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A Focus On DOJ Individual Actions

Criminal Law

This recent post focused on SEC individual FCPA actions and this post highlights certain facts and figures concerning the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2016 and historically.

As highlighted numerous times on FCPA Professor over the past several years, the DOJ frequently talks about the importance of individual FCPA prosecutions. During her tenure, Assistant Attorney General Leslie Caldwell (she recently left the DOJ) has stated that “certainly…there has been an increased emphasis on, let’s get some individuals” and that it is “very important for [the DOJ] to hold accountable individuals who engage in criminal misconduct in white-collar (cases), as we do in every other kind of crime.”

During his tenure DOJ FCPA Unit Chief Patrick Stokes (he recently left the DOJ) has said that the DOJ is “very focused” on prosecuting individuals as well as companies and that “going after one or the other is not sufficient for deterrence purposes.”

Against this backdrop, what do the facts actually show?

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