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Halliburton Joins FCPA Repeat Offender Club As The SEC Also Finds That A Former VP Violated The FCPA

halliburton

In 2009, Halliburton Company, KBR Inc. (a wholly-owned subsidiary of Halliburton during the relevant time period) and Kellogg, Brown & Root, LLC (a wholly-owned subsidiary of KBR) resolved parallel DOJ and SEC Foreign Corrupt Practices Act enforcement actions in connection with a bribery scheme involving a $6 billion liquefied natural gas plant on Bonny Island, Nigeria. (See here and here).

The combined $579 million settlement amount (DOJ – $402 million / SEC $177 million) remains the third largest FCPA settlement of all-time. The SEC’s resolution contained the perfunctory condition of permanently enjoining Halliburton from violating the FCPA’s books and records and internal controls provisions.

However, yesterday Halliburton joined the ever-increasing (see here and here for recent posts) FCPA repeat offender club as the SEC announced an FCPA enforcement action concerning alleged conduct in Angola. Without admitting or denying the SEC’s findings in this administrative order that it violated the FCPA’s books and records and internal controls provisions, Halliburton agreed to pay $29.2 million. In the same order, the SEC also found that Jeannot Lorenz (Halliburton’s former vice president) causing the company’s violations, circumvented internal accounting controls, and falsified books and records. Without admitting or denying the SEC’s findings, Lorenz agreed to pay a $75,000 penalty.

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The Current Failure Of The FCPA Pilot Program To Accomplish One Of The DOJ’s Stated “Main Goals”

failure

As highlighted in the article “Grading the DOJ’s FCPA Pilot Program” and this post, it is difficult (if not impossible) to empirically assess whether one of the Pilot Program’s goals (to increase corporate voluntarily disclosures) is actually working. Simply put, many business organizations were voluntarily disclosing prior to the April 2016 Pilot Program and the precise question after the Pilot Program is whether the program is motivating voluntary disclosures to a greater extent than prior to the program.

Yet as highlighted below, it is possible to assess whether another of the DOJ’s stated “main goals” of its Pilot Program is working and at present the undeniable answer is that, as measured against this “main goal,” the Pilot Program is currently failing.

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Nearly 20 Corporate FCPA Enforcement Actions By The DOJ, Approximately $1.4 Billion Collected, And Not One Company Employee Has Been Charged With FCPA Offenses By The DOJ

dismal

As highlighted here, nearly two years ago the DOJ released the so-called Yates Memo, technically a policy memo titled “Individual Accountability for Corporate Wrongdoing.”

There was really nothing new in the Yates Memo as it continued the DOJ’s rhetoric about the importance of individual prosecutions. Specifically, the Yates Memo repeated the following DOJ rhetoric:

“One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing. Such accountability is important for several reasons: it deters future illegal activity, it incentivizes changes in corporate behavior, it ensures that the proper parties are held responsible for their actions, and it promotes the public’s confidence in our justice system.”

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Friday Roundup

Roundup

Guilty plea, scrutiny alerts, absurd and remarkable, and Caldwell to private practice. It’s all here in the Friday roundup.

Guilty Plea

As highlighted in this January post, the DOJ announced Foreign Corrupt Practices Act, and related charges, against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam to a Middle Eastern sovereign wealth fund.

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FCPA Flash – A Conversation With Danforth Newcomb & Cynthia Urda Kassis Regarding “Transacting Business During a Corruption Investigation”

FCPA Flash

The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Shearman & Sterling attorneys Danforth Newcomb and Cynthia Urda Kassis who recently authored an article titled “Transaction Business During a Corruption Investigation.”

During the podcast, Danforth and Cynthia discuss: (i) the origins of the article; (ii) what makes potential legal liability under the FCPA or similar laws different than potential legal liability under other laws; (iii) the gap between corporate FCPA enforcement and individual FCPA enforcement; and (iv) whether a recent DOJ statement that “FCPA investigations [should] be measured in months, not years” is believable.

FCPA Flash is sponsored by Kroll. Kroll is trusted by companies and compliance officers worldwide to help prevent, detect, and remediate FCPA challenges with scalable, end-to-end compliance solutions: from high-volume third party screening and automated monitoring, to risk-based due diligence, to complex investigations and monitorships.

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