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The Difficulty of Reconciling Existing Legal Authority And Even Enforcement Agency Guidance With Certain FCPA Books And Records And Internal Controls Enforcement Actions

Difficult

This recent FCPA Flash podcast episode focused on the SEC’s “unlawful” enforcement, in certain instances, of the FCPA’s books and records and internal controls provisions.

Off-the-rails SEC FCPA enforcement is a topic frequently discussed on these pages (see here among numerous other posts) and sometimes it is important to take a step back and review actual legal authority, as well as even prior enforcement agency guidance, relevant to the books and records and internal controls provisions.

Upon reviewing the below information, ask yourself whether it is possible to reconcile this legal authority and other sources of information with enforcement theories advanced in certain FCPA enforcement actions.

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Friday Roundup

Roundup

Funny, also funny, corruption in the anti-corruption industry, the head of the DOJ’s FCPA Unit writes, reasons for the general increase in FCPA enforcement, scrutiny alert, asset recovery, and for the reading stack. It’s all here in the Friday roundup.

Funny

This recent FCPA Blog post asked “what’s the most important FCPA case ever” and stated: “The Africa Sting showed how far the feds would go to make a splashy FCPA case. But the final lesson was that using a big sting to concoct a supposed industry-wide conspiracy was a bad idea. The judge didn’t buy it, and neither did a couple of juries.”

Funny that the post doesn’t mention that the the person at the center of this failed, manufactured case was its current Contributing Editor and training partner Richard Bistrong.

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Mum’s The Word As The DOJ Declines To Provide Clarity About The “Aggravating Circumstances” In Its New FCPA Corporate Enforcement Policy

mouthshut

The DOJ’s new “FCPA Corporate Enforcement Policy” states:

“When a company has voluntarily self-disclosed misconduct in an FCPA matter, fully cooperated, and timely and appropriately remediated … there will be a presumption that the company will receive a declination [subject to a requirement to pay all disgorgement, forfeiture, and/or restitution resulting from the misconduct] absent aggravating circumstances involving the seriousness of the offense or the nature of the offender.  Aggravating circumstances that may warrant a criminal resolution include, but are not limited to, involvement by executive management of the company in the misconduct; a significant profit to the company from the misconduct; pervasiveness of the misconduct within the company; and criminal recidivism.”

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Deputy AG Rosenstein Assumes Causation In Calling The FCPA Pilot Program “Successful”

Assume

As long as there have been government programs, government officials have been inclined to proclaim the program a success.

For instance, last week in announcing the DOJ’s new “FCPA Corporate Enforcement Policy, Deputy Attorney General Rod Rosenstein stated:  “The incentive system set forth in the Department’s FCPA Pilot Program motivates and rewards companies that want to do the right thing and voluntarily disclose misconduct. In the first year of the Pilot Program, the FCPA Unit received 22 voluntary disclosures, compared to 13 during the previous year.  In total, during the year and a half that the Pilot Program was in effect, the FCPA Unit received 30 voluntary disclosures, compared to 18 during the previous 18‑month period.”

As highlighted in this post, Rosenstein’s statement assumes causation – in other words that the supposed increase in voluntary disclosures was the result of the April 2016 Pilot Program.

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Statement On The DOJ’s New “Revised FCPA Corporate Enforcement Policy.”

Soapbox

As highlighted in this previous post, earlier today Deputy Attorney General Rod Rosenstein announced that the DOJ issued a new “revised FCPA corproate enforcement policy.” (See here for the actual policy in the U.S. Attorneys’ Manual).

The following statement may be attributed to Professor Koehler.

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