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DOJ Speaks

There is a “same speech, different day” aspect of late when the DOJ talks about the FCPA. One can reasonably predict what will be said (i.e. DOJ values voluntary disclosure and cooperation), even before it is said, and this has the tendency of diminishing the message.

This week it was Compliance Week 2010 (see here). The speaker’s – Acting Deputy Attorney General Gary Grindler and Assistant Attorney General (Criminal Division) Lanny Breuer.

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On Tuesday, Grindler spoke (see here for his remarks).

Grindler began his remarks as follows:

“Having spent a good portion of my career in private practice representing corporate clients and advising them on compliance matters, I am no stranger to what I suspect many of you in the audience are thinking: What is the Department of Justice focused on and how can I make sure my clients stay as far away from it as possible? I’d like to spend my time with you this evening hopefully answering the first question by giving you a sense of some of the policy and enforcement priorities that we are focused on at the Department and sharing some of my thoughts how you can best position your clients when interacting with the Department.”

Grindler’s remarks covered three general topics: DOJ’s Financial Fraud Enforcement Task Force, DOJ’s efforts to combat health care fraud, and the DOJ’s new Intellectual Property Enforcement Task Force.

While speaking on health care fraud, Grindler noted:

“You can be assured that we will also use every tool at our disposal to investigate and prosecute corrupt practices in the pharmaceutical industry. In the months ahead, for example, you can expect to see the Department increasingly use the Foreign Corrupt Practices Act to prosecute kickbacks and bribes paid to foreign government officials by pharmaceutical companies. As the drug companies do more and more of their business overseas where so much of the health care business is government run, we see the opportunities for FCPA violations unfortunately proliferating. Indeed, in some foreign countries nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a “foreign official” within the meaning of the FCPA. The extent of government involvement in foreign health systems, combined with fierce industry competition and the closed nature of many public formularies, creates, in our view, a significant risk that corrupt payments will infect the process. The Department will not hesitate to charge pharmaceutical companies and their senior executives under the FCPA if warranted to root out foreign bribery in the industry.”

For the same speech, different day version, see here and here.

The final part of Grindler’s speech is titlted – “What You Can Do.” Excerpted portions are below.

“Now, how can you best advise your clients in light of the Department’s enforcement priorities and given the climate we are in where there is so much distrust of corporate America.”

“First, you can make sure that your clients have robust, effective compliance programs and internal controls. A company’s compliance program continues to be one of the most important factors that we consider under the Principles of Federal Prosecution of Business Organizations. You are on the front lines of this issue and can make a real difference in your respective institutions by sending the message about the need for an effective compliance program. Compliance programs must not exist only on paper.”

“In this context, I want to point out that the United States Sentencing Commission recently amended the Sentencing Guidelines on the issue of compliance programs. Specifically, the Commission clarified the importance of assessing and modifying compliance programs after you discover criminal conduct at your company. The current Guidelines provide that, following the discovery of criminal conduct, a company should, among other things, make “any necessary modifications to the organization’s compliance and ethics program.” The new amendment — assuming it goes into effect in November — provides a new commentary to that provision specifying that this post-violation process includes “assessing the compliance and ethics program and making modifications necessary to ensure the program is effective … and may include the use of an outside professional advisor to ensure adequate assessment and implementation of any modifications.”

“In addition, the latest Guideline amendments clarify the circumstances under which an effective compliance and ethics program can entitle an organization to a 3-level reduction in its culpability score. Specifically, the amendment allows an organization to receive the decrease if the organization meets four criteria: (1) the individual or individuals with operational responsibility for the compliance and ethics program have direct reporting obligations to the organization’s governing authority or appropriate subgroup thereof; (2) the compliance and ethics program detected the offense before discovery outside the organization or before such discovery was reasonably likely; (3) the organization promptly reported the offense to the appropriate governmental authorities; and (4) no individual with operational responsibility for the compliance and ethics program participated in, condoned, or was willfully ignorant of the offense. These amendments reinforce the point that having a robust compliance program is critical not only to preventing misconduct in the first place, but also how your organization will be treated in the event criminal conduct does take place.”

“The second thing you can do to best position your client, is you can partner with us. As I hope has been clear in my discussion of our enforcement efforts, there is a consistent theme of the importance of sharing information and partnering with the private sector in its anti-fraud efforts. Through examples like the National Heath Care Fraud Summit and the regional mortgage fraud summits, we have been reaching out to private sector anti-fraud professionals to share information about fraud schemes and improvements in data analysis. While we have limitations in what we can share, we are interested in exploring ways to work together within those constraints. If the private sector sees new fraud schemes or ways in which we can prevent fraud, that is something you should share with us.”

“Third, you can advise your clients to make early, voluntary disclosure of misconduct. As you know, it is usually in your client’s best interest to cooperate with the government’s investigation through the disclosure of relevant facts, the production of documents and other evidence, and making witnesses available who have relevant information.”

“Fourth, you can guide your client’s decision to take meaningful remedial measures in response to criminal wrongdoing, including the payment of restitution and the disciplining or termination of culpable employees, officers, or directors.”

“In the end, all of these steps – robust compliance programs, information sharing between public and private sector anti-fraud efforts, voluntary disclosure, and meaningful remedial measures — will inure to the benefit of your clients in several significant ways. They will deter criminal conduct from occurring in the first place. They will ensure that if and when misconduct does occur, it is detected early on and can be rooted out before too much damage is done. Your client will receive credit for such actions during the prosecutorial decision-making process. Finally, such steps will make your clients stronger corporate citizens, and will empower your clients’ officers, directors, and employees to fulfill their fiduciary obligations to shareholders and their duties of honest dealing to the investing public and the taxpayers.”

For more on Grindler’s speech, including topics raised during the Q&A, see this piece from Christopher Matthews at Main Justice.

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On Wednesday, Breuer spoke (see here for a copy of his remarks). Below are various excerpts from the speech.

Given the DOJ’s recent “bribery, yet no bribery” cases against BAE and Daimler, I must admit to getting a bit frazzled after only paragraph two of the speech in which Breuer talks about the “the Justice Department’s determination to prosecute – and prosecute aggressively – financial fraud and corruption in all its forms. The American public demands no less, and we will deliver no less.”

Speaking generally, Breuer described “a new era of heightened white-collar crime enforcement – an era marked by increased resources, increased information-sharing, increased cooperation and coordination, and tough penalties for corporations and individuals alike.”

Breuer next discussed that “additional resources are also being committed in the Criminal Division, where we are in the process of adding a number of attorneys to the Fraud Section – lawyers who will be deployed immediately to prosecute crimes like securities fraud, health care fraud, and foreign bribery under the Foreign Corrupt Practices Act.” He cited the Africa Sting case as an example of using “more aggressive law enforcement techniques” and further stated that “it is fair to say that [DOJ] will continue to look for opportunities to innovate in how we identify financial fraud and corruption.”

Speaking of innovation at the SEC, Breuer stated:

“The SEC will now make use of cooperation agreements, as well as deferred and non-prosecution agreements – all of which have been staples of the Justice Department’s approach in white collar criminal cases for many years now. These innovations will likely lead to even earlier and closer coordination between the SEC and the Justice Department.”

Breuer next talked specifically about foreign bribery “which obviously is at the center of this heightened enforcement climate and which presents unique compliance challenges.”

Below are his remarks.

“As I have said in the past, foreign bribery is a law enforcement challenge of truly global dimensions. It is, as the Attorney General has said, a ‘scourge on civil society.’ We in the Criminal Division combat foreign bribery each and every day. And as we go about our business, we are looking carefully at lapses in corporate compliance. Why? Because of what I said a few minutes ago. Our preference, like yours, is for these crimes to be prevented in the first instance. And the only way that can happen in your organizations is through a robust, state-of-the-art compliance program and a true culture of compliance.”

“I know that you all do not lack for incentives; the statistics in FCPA enforcement are well known. But it is worth pausing on them for a moment.”

“Since 2004, the Fraud Section has achieved 37 corporate FCPA and foreign bribery related resolutions, with fines totaling over $1.5 billion. In this time period, we have charged 81 individuals with FCPA violations and related offenses. Forty-six have been charged since the start of 2009 – more than the total number of individuals charged in the previous seven years combined.”

“The individuals charged have included CEOs, CFOs, other senior-level corporate officials and, where jurisdiction existed here, several foreign officials. Charging individuals is part of a deliberate enforcement strategy to deter and prevent corrupt corporate conduct before it happens. And rest assured that we will seek equally tough sentences, including significant jail time if appropriate, to reinforce this message of deterrence.”

“Aggressive enforcement by the Criminal Division provides one set of incentives for corporations. Others are sprouting up each and every day, and they are coming from all corners as anti-fraud and corruption enforcement catches up with the globalization of business.”

“Here in the United States, the United States Sentencing Commission recently approved amendments to its Sentencing Guidelines, one of which reaffirmed the importance of compliance and ethics programs within organizations. The amendment stressed the critical need to embed these programs at the very highest level of the organization. In an interesting twist, the Commission expanded eligibility for effective compliance and ethics program credit at sentencing even if one or more members of ‘high level personnel’ has some role in the offense.”

“But there’s a catch. In order to be eligible for credit where there is such ‘high level’ involvement, the corporation must have in place a direct reporting relationship between the individual with operational responsibility for the compliance program and the corporation’s governing body. And more than that, the corporation must have discovered the offense and reported it to enforcement officials before it otherwise became known. The amendment has not been uncontroversial. But whatever your opinion, it can at least be said that the amendment reflects the Commission’s view that compliance should be embedded at the very highest levels of an organization.”

“On the international front, the United Kingdom has passed a new, comprehensive Bribery Act that criminalizes, among other things, the failure by a corporate entity to prevent bribery. Pretty serious, right? Well, the Act does provide a defense to such a charge if the corporate entity can show that it has ‘adequate procedures’ in place to deter and detect such conduct. What does ‘adequate procedures’ mean? It’s not entirely clear. And I’m, of course, not your lawyer. But, at a minimum, it would seem prudent to have in place a strong, state-of-the-art compliance program.”

Breuer then offers a few thoughts on compliance and offers up the Principles of Federal Prosecution of Business Organizations (see here) and the OECD’s Good Practice Guidance on Internal Controls, Ethics, and Compliance (see here – Annex II) as benchmarks.

Breuer then acknowledges that “even the best compliance program may not stop fraud or corruption from occurring. So, what should a corporation do when a problem has been discovered?”

Because the answer has been stated numerous, numerous times, you probably already known the answer – voluntarily disclose and cooperate.

Below are Breuer’s comments on these issues:

“Whether to voluntarily disclose potential criminality is admittedly a difficult question for business entities.”

“But I can offer you this: If you come forward and if you fully cooperate with our investigation, you will receive meaningful credit for having done so. In talking about ‘meaningful’ credit, we are not promising amnesty for doing the right thing. But, self-reporting and cooperation carry significant incentives – by working with the Department, no charges may be brought at all, or we may agree to a deferred prosecution agreement or non-prosecution agreement, sentencing credit, or a below-Guidelines fine. Ultimately, every case is fact-specific and requires an assessment of the facts and circumstances, as well as the severity and pervasiveness of the conduct and the quality of the corporation’s pre-existing compliance program. But, in every case of self-disclosure, full cooperation, and remediation, the Department is committed to giving meaningful credit where it’s deserved to obtain a fair and just resolution.”

“The Siemens matter is a case in point. While the conduct in that case is arguably the most egregious example of systemic foreign corruption ever prosecuted by the Department, [Note – Siemens was not charged with violating the FCPA’s anti-bribery provisions] it also illustrates the tremendous benefits that flow from truly extraordinary cooperation. By Siemens opening itself up to authorities, [Note – Siemens did this after its offices were raided by German authorities] the Department completed its investigation and resolved the case – with domestic and international dimensions – in two years’ time. In the end, the benefits Siemens received through its cooperation, even in the absence of a voluntary disclosure, were plain – the $450 million fine that was paid to the Justice Department, although quite substantial, was a far cry from the advisory range of $1.35 billion to $2.7 billion called for in the Sentencing Guidelines. Put another way, Siemens received a penalty that was 67 to 84 percent less than what it otherwise could have faced had it not provided extraordinary cooperation and carried out such extensive remediation.”

“Another example, on a more modest scale, was the resolution of the Helmerich & Payne matter, a company that self-disclosed improper or questionable payments. [Note – is Breuer acknowledging that the payments at issue in this case – payments to various officials and representatives of the Argentine and Venezuelan customs services in connection with importation and exportation of goods and equipment – may not have violated the FCPA? See here for more] The case was resolved through a non-prosecution agreement with a term of two years, a penalty of $1 million (which was approximately 30 percent below the bottom of the Guidelines range), and compliance self-reporting by the company for a period of two years in lieu of an independent compliance monitor. Because of the forward-leaning, proactive, and highly cooperative approach taken by Helmerich & Payne, that company received a host of benefits that likely would not otherwise have been obtained from the Department.”

“In short, these two cases, and others like them, reflect the Department’s willingness to step up to the plate when a corporation does the right thing by making a voluntary disclosure and cooperating fully.”

“Let me offer one additional piece of guidance on this topic. When a problem has been discovered, the corporation should seriously consider seeking the government’s input on the front end of its internal investigation. [Note – at the front end of an FCPA internal investigation, it is generally not even known if a violation has occurred – why should a company seek the DOJ’s input when it is not yet known if a violation of law has occurred?] We encourage a company to come in and describe its work plan for conducting the investigation. Often we have questions, or helpful suggestions, or we may ask that the corporation expand the scope of the investigation. Regardless, the dialogue can be very helpful in ensuring at the outset that the corporation has an effective, cost-effective plan in place to investigate and deal with the problem.”

Breuer then offered a few words about compliance monitors.

Below are his comments.

“In resolving criminal conduct, the Department’s goal is to vindicate the law and ensure adherence to it in both letter and spirit. In that regard, the structure and terms of a corporate resolution are properly determined by the particular facts of the case and the circumstances surrounding the specific business entity and the public interest. Thus, a compliance monitor may be particularly useful where the agreement requires the corporation to design, or substantially re-design, and implement a broad compliance and ethics program and internal controls. As an independent observer, the monitor can enable the government to verify whether a business is fulfilling the obligations to which it agreed. In other cases, however, a compliance monitor may not be needed for a variety of reasons, such as where the business organization has ceased operations in the area where the criminal conduct occurred, or where the business has re-designed and effectively implemented appropriate compliance measures and internal controls before entering into an agreement with the United States.”

“However the calculus plays out, we are always mindful of, and we do weigh, the potential benefits of employing a monitor with the cost of a compliance monitor and its impact on the operations of the business organization. Of that much you can be sure.”

For more on Breuer’s speech, including topics raised during the Q&A, see this piece from Christopher Matthews at Main Justice.

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A good holiday weekend to all – please check back on Tuesday for a post about a current FCPA compliance monitor.

Focus on Pharma

Yesterday, Acting Deputy Attorney General Gary Grindler spoke at the National Institute on Health Care Fraud in Miami. Part of his remarks (see here) included the following:

“… in the months ahead, you can expect to see the department increasingly using the Foreign Corrupt Practices Act to prosecute kickbacks and bribes paid to foreign government officials by pharmaceutical companies. As the drug companies do more and more of their business overseas where so much of the health care business is government run, we unfortunately see the opportunities for FCPA violations proliferating. In some foreign countries, nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product may involve a “foreign official” within the meaning of the FCPA. The department will not hesitate to charge pharmaceutical companies and their senior executives under the FCPA if warranted to root out foreign bribery in the industry.”

If the above “nearly every aspect” snippet sounds familiar, you have a good memory.

It is nearly verbatim what Assistant Attorney General Lanny Breuer said during a keynote address to the 10th Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum last November. (See here).

In The News

The SEC Goes Searching

Last August (see here) when Robert Khuzami, the SEC’s Director of the Division of Enforcement, announced that the SEC would be creating a specialized FCPA unit he said, among other things, that:

“The Foreign Corrupt Practices Act unit will focus on new and proactive approaches to identifying violations of the Foreign Corrupt Practice Act…”

In February, Cheryl Scarboro (the head of the SEC’s FCPA Unit) similarly stated (here) that “the new unit will give us the resources and the ability to do even more going forward,” that the new unit will allow the SEC to do more industry investigations, and that one industry the SEC is focusing on is the pharmaceutical industry.

Given these comments, it should come as no surprise that a recent Wall Street Journal article notes that the SEC enforcement division sent letters “within the past two months” to several companies in the pharmaceutical and energy industries” “as part of an investigation by the SEC division that looks into potential violations of the FCPA.” According to the article, the letters ask the companies “about their internal controls to guard against bribery” specifically in terrorism-sponsor states such as Cuba, Iran, Sudan, and Syria. According to the article, “it isn’t clear which companies received the letters.” The article also notes that “the SEC probe, which is in its early stages, comes as the Justice Department’s criminal fraud section has sent letters in recent weeks to a number of pharmaceutical companies asking about payments made to foreign officials in several nations…” Both the SEC and DOJ declined to comment for the article.

Bribes for Books

A post earlier this week talked about the World Bank and other multilateral development banks (see here).

Fitting because recently the World Bank (see here) “debarred Macmillan Limited, a U.K. company, declaring the company ineligible to be awarded Bank-financed contracts for a period of six years in the wake of the company’s admission of bribery payments relating to a Trust Fund-supported education project in Southern Sudan.” According to the release, “the debarment can be reduced to three years subject to continued cooperation.”

In a press release yesterday (see here), the company said “the international publishing business, Macmillan Publishers Ltd UK (“Macmillan”), has today confirmed that it has voluntarily referred to the Serious Fraud Office its concerns over historic payments made by a subsidiary of its education business, Macmillan Education, to secure a contract in Southern Sudan.”

A Look Back (and Forward)

This week marks not only the end of a year, but also a decade.

So let’s take a look back at FCPA enforcement circa 2000.

In 2000, the FCPA was indeed “on the books” (the statute was enacted in 1977), yet there was little in terms of FCPA news or enforcement actions.

A “U.S. newspapers and wires” search for the FCPA in the 2000 picks up 64 “hits” and among the more noteworthy stories from that year were the following:

(1) BellSouth corporation disclosed that the SEC launched a probe into whether one of its Latin American subsidiaries violated the FCPA and the company also disclosed that its outside counsel had already investigated the conduct and found that no violations had occurred; and

(2) BF Goodrich Company announced that it was using a web-enabled training system to educate its employees about work-related legal issues including the FCPA.

One could even attend a few FCPA training sessions in 2000 as the search picked up programs sponsored by both the City of New York Bar and the Washington DC Bar.

There was even one FCPA enforcement action in 2000!

In December 2000, the SEC announced (here) the filing of a settled cease-and-desist proceeding against International Business Machines Corporation (“IBM”).

According to the SEC order (here), IBM violated the books and records provisions of the FCPA based on the conduct of its indirect, wholly-owned subsidiary, IBM-Argentina, S.A. The conduct involved “presumed illicit payments to foreign officials” in connection with a “$250 million systems integration contract” between Banco de la Nacion Argentina (“BNA”) (an apparent “government-owned commercial bank in Argentina) and IBM-Argentina.

The SEC order finds that, in connection with the contract, IBM-Argentina’s Former Senior Management (without the knowledge or approval of any IBM employee in the U.S.) caused IBM-Argentina to enter into a subcontract with an Argentine corporation (“CCR”) and that “money paid to CCR by IBM-Argentina in connection with the subcontract was apparently subsequently paid by CCR to certain BNA officials.”

According to the Order, IBM-Argentina paid CCR approximately $22 million under the subcontract and “at least $4.5 million was transferred to several BNA directors by CCR.”

According to the Order, the former Senior Management “overrode IBM procurement and contracting procedures, and hid the details of the subcontract from the technical and financial review personnel assigned to the Contract.” The Order finds that IBM-Argentina “recorded the payments to CCR in its books and records as third-party subcontractor expenses” and that IBM-Argentina’s financial results were incorporated into IBM’s financial results filed with the Commission.

Based on the above conduct, the SEC concluded that “IBM violated [the FCPA’s books and records provisions] by failing to ensure that IBM-Argentina maintained books and records which accurately reflected IBM-Argentina’s transactions and dispositions of assets with respect to the Subcontract.” IBM consented to a cease and desist order and consented to entry of a judgment ordering it to pay a $300,000 penalty.

A Washington Post article about the IBM action notes that it “is the SEC’s first in three years involving overseas bribery.”

In 2000, there were no DOJ FCPA prosecutions (against corporations or individuals).

The first DOJ corporate FCPA prosecution of this decade did not occur until 2002.

In that action (here) Syncor Taiwan, Inc. (a wholly-owned, indirect subsidiary of Syncor International Corporation) pleaded guilty to a one-count criminal information charging violations of the FCPA. According to the DOJ release, “[t]he company admitted making improper payments [approximately $344,110] to physicians employed by hospitals owned by the legal authorities in Taiwan for the purpose of obtaining and retaining business from those hospitals and in connection with the purchase and sale of unit dosages of certain radiopharmaceuticals.”

The release further notes that the company “made payments [approximately $113,000] to physicians employed by hospitals owned by the legal authorities in Taiwan in exchange for their referrals of patients to medial imaging centers owned and operated by the defendant.”

Based on this conduct, the release notes that the company agreed to a $2 million criminal fine – “the maximum criminal fine for a corporation under the FCPA” (as noted in the release). The release also notes that “Syncor International has consented to the entry of a judgment requiring it to pay a $500,000 civil penalty, the largest penalty ever obtained by the SEC in an FCPA case.”.

From this retrospective, two issues jump out.

First, as demonstrated by the IBM action, the notion that an issuer may be strictly liable for a subsidiary’s (even if indirect) violations of the FCPA books and records is nothing new. (See here for a prior post on this issue).

Second, as demonstrated by the Syncor action, DOJ’s interpretation of the “foreign official” element to include non-government employees employed by state-owned or state-controlled entities stretches back to earlier this decade. (See here for prior posts on this issue).

This retrospective also highlights just how significantly FCPA enforcement has changed this decade.

For starters, the same “U.S. newspapers and wires” search for the FCPA (year to date) picks up nearly 700 “hits” (a ten-fold increase from ten years ago). In addition, if one wanted to, one could attend (it seems) an FCPA seminar, training session, bar event, etc. every week in a different state.

Further, I bet my Jack LaLanne Power Juicer received this holiday season that if the IBM enforcement action were to have recently occurred, the SEC would have also charged FCPA internal control violations as well as sought a significant disgorgement penalty given that the alleged improper payments in that matter helped secure a $250 million contract.

Moreover, the $2 million “maximum criminal fine for a corporation under the FCPA” (as noted in the Syncor DOJ release) seems laughable when viewed in the context of the $450 million Siemens criminal fine (Dec. 2008) or the $402 million Kellogg Brown & Root criminal fine (Feb. 2009). Also laughable is the $500,000 “largest penalty ever obtained by the SEC in an FCPA case” (as noted in the Syncor release) when viewed in the context of the $350 million Siemens penalty or the $177 million KBR/Halliburton penalty.

Has the conduct become more egregious during this decade or have enforcement theories and strategies simply changed? I doubt it is the former.

Why have enforcement theories and strategies changed? One of the best, candid explanations I’ve heard recently is that FCPA enforcement for the government “is lucrative.” (See here).

One of the great legal “head-scratchers” of this decade is how DOJ and SEC’s enforcement of the FCPA against business entities has taken place almost entirely outside of the normal judicial process due to the fact that corporate FCPA prosecutions are resolved through non-prosecution or deferred prosecution agreements, settled through SEC cease and desist orders, or otherwise resolved informally. The end result is that in many cases, the FCPA means what DOJ and SEC says it means.

My hope for the New Year and decade is that many of the untested and unchallenged legal theories which are now common in FCPA enforcement will actually be subject to judicial scrutiny and interpretation.

A Few Questions From the Back Row

Today, Assistant Attorney General Lanny Breuer gave a keynote address to the 10th Annual Pharmaceutical Regulatory and Compliance Congress and Best Practices Forum (see here for his address).

In addition, to talking about the unique FCPA compliance risks facing the pharmaceutical industry, Breuer also discussed general FCPA topics such as compliance and voluntary disclosure. Whether you are in the pharma industry or not, you probably want to take a look at what he had to say.

Here is what Breuer had to say about the “foreign official” element of an FCPA anti-bribery violation.

“…who exactly qualifies as a ‘foreign official’ in the context of a public health system, and what constitutes a corrupt offer or payment that violates the FCPA? Of course, the answers to those questions depend on the facts and circumstances of every case, and I can’t give you binding guidance from the podium today.”

Breuer also said:

“…consider the possible range of ‘foreign officials’ who are covered by the FCPA: Some are obvious, like health ministry and customs officials of other countries. But some others may not be, such as the doctors, pharmacists, lab technicians and other health professionals who are employed by state-owned facilities. Indeed, it is entirely possible, under certain circumstances and in certain countries, that nearly every aspect of the approval, manufacture, import, export, pricing, sale and marketing of a drug product in a foreign country will involve a ‘foreign official’ within the meaning of the FCPA.”

If I had attended the address, I would have raised my hand and asked these questions (perhaps someone did).

Why can’t the DOJ give binding guidance (or even just guidance) on the meaning of the “foreign official” element?”

You say that “doctors, pharmacists, lab technicians and other health professionals who are employed by state-owned facilities” are included in the range of “foreign officials who are covered by the FCPA.” However, isn’t that merely the DOJ’s interpretation of the statute, and an untested and unchallenged interpretation at that? Before companies are subject to an FCPA enforcement action based on this theory, shouldn’t there at least be some judicial acceptance of this theory? If you believe there has been, can you please provide the case cites? Is DOJ willing to make public its legal analysis and rationale for this theory?

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