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A Former Enforcement Official Is Likely To Say (Or Has Already Said) The Same Thing

Some think – or at least I’ve been told – that certain of my Foreign Corrupt Practices Act views are controversial or out of the “main stream” (whatever the “main stream” actually is or means).

Yet, I am confident that much of what I write and talk about represents silent majority views.

Indeed, as I’ve commented before, one of the interesting things about writing about the FCPA and related issues on a daily basis is that often I just need to wait for a former FCPA enforcement official to say the same thing.

It happens frequently.

Looking for support as to the following issues:

  • “it is often difficult to determine where the lines  [regarding the FCPA’s anti-bribery provisions] are to be drawn,”
  • the enforcement agencies “push[] the boundaries of jurisdiction for substantive FCPA charges,”
  • “U.S. enforcement personnel have interpreted the language [of the obtain or retain business element] broadly,”
  • that it is “not necessarily easy to identify the dividing line between a permitted facilitating payment and a prohibited bribe,” and
  • that various public policy issues are raised because “virtually all DOJ and SEC enforcement cases against business entities are settled.”?

That’s easy – all of the above quotes are from writings of the self-described “architect and key enforcement official of the DOJ’s modern FCPA enforcement program.”  (See here)

Does every FCPA issue need to be voluntarily disclosed to the DOJ or SEC?  Don’t believe just me that the answer is no.  A former DOJ Deputy Assistant Attorney General, Criminal Division has stated the same thing (see here for the prior post).  So has a former DOJ fraud section chief (see here).

A central theme in my “The Facade of FCPA Enforcement” article was that not all instances of FCPA scrutiny resolved via non-prosecution and deferred prosecution agreements represent actual, provable violations of the FCPA.  A former DOJ attorney general has stated the same thing (see here).

Does FCPA enforcement appear – in certain instances – to be a cash cow for the government?  Former enforcement officials have said the same thing and one of the more forceful comments on this issue came from a former DOJ Assistant Chief for FCPA enforcement who stated that “[t]he government sees a profitable program, and it’s going to ride that horse until it can’t ride it anymore.”

Who else is in favor of an FCPA compliance? Lots of former DOJ FCPA enforcement officials or other high-ranking DOJ officials as detailed in “Revisiting an FCPA Compliance Defense” and here.

Numerous other examples also abound.

For instance, just last week a candid quote was captured by the Wall Street Journal in this article concerning SEC enforcement. Robert Khuzami, who stepped down as the SEC’s head of enforcement in January, stated that the SEC has de facto power as “judge, jury and prosecutor.”  This dynamic is also highlighted in my “Facade of FCPA Enforcement” article.  (The referenced Wall Street Journal article is also an interesting read regarding whether SEC enforcement is a numbers game).

Often times, waiting for an enforcement official to leave government service is not necessary.  Another fruitful source that informs my FCPA and related views are statements of current enforcement officials made prior to government service.

For instance, as highlighted in this prior post, one of the more informed and forceful critiques of NPAs and DPAs is from Mary Jo White, the current Chair of the SEC.  As highlighted in this prior post and in the “Revisiting an FCPA Compliance Defense” article, one of the more notable advocates of an FCPA compliance-like defense is James Doty, appointed by the SEC in 2011 to be Chair of the Public Company Accounting Oversight Board.

In short, what’s so controversial or out of the “main stream” writing and talking about the same issues former enforcement officials are likely to say (or have already said)?

Upgrades

FCPA Professor is a constant work in progress.  I am pleased to share the following upgrades to the website.

Once a year, I go “back in” to previous posts to make sure that subject matter tagging is consistent and comprehensive.  That process is now done and the search page of FCPA Professor now contains approximately 850 unique subject matter categories to assist in your FCPA and related research needs.  Want to review all FCPA enforcement activity in 2011?  That’s just a click away.  Interested in keeping up to speed on FCPA reform and related issues?  That too is just a click away.  What about FCPA enforcement actions or other instances of scrutiny against foreign issuers?  You guessed it, that too is just a click away.  You name the substantive topic, and there is likely a search tab for it on FCPA Professor.  Having this research capability in any other area of law likely requires paid subscriptions and passwords, yet this capability on FCPA Professor is provided to you for free.

The FCPA 101 page of FCPA Professor has been updated to reflect current developments and contains more substantive detail concerning the FCPA and its enforcement than ever before.

The Resources page of FCPA Professor has been updated and enhanced to make it more user-friendly.  The page now contains dozens of links to other sites that contain FCPA news and analysis, research databases, and other useful resources.

The above additions and upgrades to FCPA Professor, not to mention the daily posts, take substantial time and effort.  The expenses associated with FCPA Professor are my own and FCPA Professor very much represents a kitchen-table project.

This past July, a donate button was placed on FCPA Professor allowing readers to contribute and show support for FCPA Professor.  While grateful to the small handful of contributors, the response rate was generally dismal.

The metrics on FCPA Professor indicate that hundreds of thousands of people from all over the world visit FCPA Professor throughout the year.  Often times readers contact me thanking me for spending the time to run the site, keeping them informed of the issues, providing in-depth analysis of FCPA enforcement actions and other topics, or simply causing them to consider the issues in a different way.

FCPA Professor can and should become more of a reader-supported website.

Do you get your FCPA from FCPA Professor?

If the answer is yes, you can help support this free website here.

Thank you for your support.

Three-Time Ironman

My annual off-topic post.

I am a three-time Ironman.  I competed in Ironman Wisconsin yesterday for the third-straight year.  I did the race (a 2.4 mile swim, a 112 mile bike and a 26.2 mile run) in a respectable 12 hours and 23 minutes.  A podium finish it was not, but perhaps in the FCPA category it was.  It was my slowest Ironman time, but most gratifying as leg injuries had me on crutches for a few weeks this summer and thereafter unable to run any significant distance.

Ironman is obviously a physicial test, but a mental and emotional journey just the same.  It takes determination to get to the finish line as well as courage to put yourself at the starting line.  Why Ironman?  Why not?  In many respects it is the celebration of the human spirit.

Because …

The day after Labor Day has always seemed like a second New Year.  In that spirit, let’s kick off the “new year” with some big-picture thoughts on why this new era of FCPA enforcement matters.

Because the DOJ has created – through use of non-prosecution and deferred prosecution agreements –  an alternative justice system whereby FCPA enforcement theories are shielded from judicial scrutiny in all but the rarest of situations and whereby FCPA enforcement actions are often resolved for business reasons not necessarily legal reasons.

Because this alternative justice system facilitates both the under-prosecution of egregious instances of business bribery as well as the over-prosecution of business conduct.

Because this alternative justice system often results in FCPA prosecutorial common law, not legal authority.

Because quantity of FCPA enforcement actions seems to be valued more by political actors, monitoring groups and civil society than quality of FCPA enforcement actions.

Because other countries are increasingly modeling enforcement of their FCPA-like laws on the U.S. approach.

Because in the rare instances in which the enforcement agencies are put to their ultimate burdens of proof, more often than not, the enforcement agencies do not prevail.

Because over 35 years after enactment of the FCPA there is more bribery and corruption (in the eyes of the enforcement agencies) than ever before even though FCPA compliance is at an all-time high.

Because the current enforcement climate and enforcement agency policies do not create the right positive incentives for companies in that a company’s good faith compliance investment is not properly recognized.

Because the enforcement agencies have unique internal policies which vest FCPA enforcement authority in the hands of a few people and these same people who helped contribute to this new era of FCPA enforcement are now making millions in the private sector providing FCPA defense and compliance services.

Because companies subject to FCPA scrutiny are spending $1.3 million per working day on pre-enforcement action professional fees and expenses and because such fees and expenses typically greatly exceed enforcement action fine and penalty amounts.

Because plaintiff’s law firms representing shareholders latch on to instances of FCPA scrutiny and often bring parasitic FCPA-related civil claims.

Because FCPA prosecutorial common law is increasingly being used offensively to accomplish a business purpose or advance a litigating position.

Because FCPA enforcement has turned into a boondoggle for many involved.

Because there is a glaring double standard between enforcement of the U.S. domestic bribery statute and the FCPA.

Because a meaningful, issues-based public policy debate as to this new era of FCPA enforcement was short-circuited by the enforcement agencies’ political posturing in regards to the FCPA Guidance.

Because more people are starting to pay attention.

Help Celebrate A FCPA Professor Milestone

Today’s post is the 1,000th to appear on FCPA Professor.

I launched FCPA Professor in July 2009 with the simple goal of injecting a much-needed scholarly voice into FCPA issues, exploring the more analytical why questions present in this era of FCPA enforcement, and fostering a forum for critical analysis and discussion of the FCPA and related topics among practitioners, business and compliance professionals, scholars and students, and other interested persons.

At first, I wondered if I would be able to consistently – week after week, month after month, year after year – produce a daily post.  Now I force myself to publish just one daily post.

FCPA Professor posts have impacted the issues and events of the day and has grown in ways I did not anticipate.  Thousands of diverse readers around the world rely on FCPA Professor for updates and analysis of FCPA and related topics and I am grateful for the comments of others such as:

  • “FCPA Professor is the Wall Street Journal concerning all things FCPA-related”
  • “FCPA Professor, one of the best law blogs on the planet”
  •  “If the FCPA Professor didn’t exist, we would have to invent him”

While FCPA Professor may have started as a blog, I invite you to think of FCPA Professor today as a comprehensive website.   In addition to informing readers of FCPA news and developments in a timely and in-depth manner, FCPA Professor features among other things:

  • links to original source documents;
  • a detailed FCPA 101 page;
  • a resource portal; and
  • hundreds of subject matter categories designed to facilitate in-depth FCPA research and analysis.

All of this takes time, money, and substantial effort.

Unlike other websites in the FCPA space, the content on FCPA Professor is provided free to readers and without compromising and distracting advertisements.  The expenses associated with FCPA Professor are my own and FCPA Professor very much represents a kitchen-table project (even though many days I write posts outside on the back patio or in hotel rooms while traveling).

FCPA Professor can and should become more of a reader-supported website.

Thus, if FCPA Professor adds value to your practice or business or otherwise enlightens your day and causes you to contemplate the issues in a more sophisticated way, please consider a donation to FCPA Professor to celebrate this 1,000th post milestone.  The donate page is located on the above banner as well as here.

Thank you for your support.

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