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Foreign Official Reports Attempted Briber Leading To Enforcement Action

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[This post is part of a periodic series regarding “old” FCPA enforcement actions]

The 2006 Foreign Corrupt Practices Act enforcement action against Faheem Mousa Salam had an unusual origin in that the foreign official Salam attempted to bribe – a senior Iraqi police official – reported the conduct to the Office of the Special Inspector General for Iraq Reconstruction (SIGIR). The police official then became a confidential informant leading to an undercover operation by SIGIR with an agent posing as a Procurement Officer for the Civilian Police Assistance Training Team (CPATT – a multinational organization tasked with training, mentoring and equipping the Iraq Police Force and responsible for ordering and supplying materials to the Iraqi Police Force).

The enforcement action is also notable in that Salam was prosecuted, plead guilty, and was sentenced to three years in prison for offering the bribe.

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Assessing The SEC’s Individual Accountability Rhetoric

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In announcing the Foreign Corrupt Practices Act enforcement action against Asante Berko earlier this week, the Chief of the SEC’s FCPA Unit stated: “individual accountability remains a key component to our FCPA enforcement efforts.” (See here for the prior post).

Such statements by FCPA enforcement officials are commonplace.

But what do the facts show? As highlighted below, since January 1, 2018 the SEC has brought 28 corporate FCPA enforcement actions against issuer companies. As the co-head of the SEC’s Enforcement Division rightly stated: “Of course, companies cannot engage in bribery without the actions of culpable individuals.” However, approximately 90% of these issuer enforcement actions have lacked, at least at present, any related SEC enforcement action against an individual. In other words, there has been no individual accountability for these alleged FCPA violations.

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A Common Language For Accurately Tracking Individual FCPA Enforcement Actions

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Today’s post is from Cuneyt Akay (Greenberg Traurig)

As loyal readers of this website know, every year FCPA Professor makes a plea for FCPA commentators to adopt a common language for tracking FCPA corporate enforcement actions. (See here for instance and here for the article “A Common Language to Remedy Distorted FCPA Enforcement Statistics”).

Well, how about a common language and approach for tracking individual enforcement cases as well?

Reviewing various published year-end FCPA summaries shows that tracking of individual enforcement actions is all over the board.  For 2019, some commentators had the number of individual enforcement actions as low as the mid-twenties while others had numbers in the forties.

So, my plea is that we also bring some consistency and standardization to tracking individual enforcement cases.  Set forth below is the methodology I utilize to track and count the number of FCPA individual enforcement cases in a year.

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Citgo Employees As Foreign Officials

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In this 2009 post, the issue was raised whether the DOJ’s “foreign official” interpretation would become so broad that employees of Citgo Petroleum (a Delaware corporation with headquarters in Houston) would be considered “foreign officials” under the Foreign Corrupt Practices Act because Citgo is a subsidiary of Petroleos de Venezuela S.A. (PDVSA).

In this little noticed FCPA enforcement from February 2020 against Tulio Anibal Farias-Perez in the sprawling PDVSA related actions, the DOJ did allege this theory of prosecution.

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In A Case That Keeps On Giving, The DOJ Announces Unsealing Of 2015 Indictment Against Former Alstom And Marubeni Executives

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In mid-2013, the DOJ announced that various current and former of Alstom resolved a Foreign Corrupt Practices Act enforcement action in connection with the Tarahan power project in Indonesia. The underlying charging documents were from 2012. (See here). Thereafter, in 2013 additional individuals associated with Alstom were also charged (see here and here) including Lawrence Hoskins who was found guilty at trial in 2019. (See here).

In early-2014, Marubeni (a consortium partner of Alstom on the Tarahan project) resolved an FCPA enforcement action. (See here and here). In late 2014, Alstom resolved an FCPA enforcement action regarding alleged conduct around the world including in Indonesia in connection Tarahan power contract. (See here and here).

Yesterday, the DOJ announced the unsealing of this 2015 indictment charging Reza Moenaf (the former president of Alstom’s subsidiary in Indonesia), Eko Sulianto (the former director of sales of Alstom’s subsidiary in Indonesia) and Junji Kusunoki (the former deputy general manager of Marubeni’s Overseas Power Project Department) with conspiracy to violate the FCPA and conspiracy to commit money laundering in connection with the same core allegations found in the previous enforcement actions.

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