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A Downtime FCPA Reading Package

Required Reading

The practice of law – as well as other corporate positions in the FCPA space – occasionally result in certain periods of downtime.

The next few days likely represent downtime. If you have substantive work great (or perhaps not), but if not substantive work probably will not hit your desk until the New Year.

However, this downtime can be used effectively to elevate your Foreign Corrupt Practices Act knowledge and sophistication.

This post provides a downtime reading package designed to do just this.

FCPA – Statute

A good place to start, and to better understand how we got here in the first place, is to read the “Story of the Foreign Corrupt Practices Act.” The article weaves together information and events scattered in the FCPA’s voluminous legislative record to tell the FCPA’s story through original voices of actual participants who shaped the law. The FCPA’s story remains important and relevant to government agencies charged with enforcing the law, those subject to the law, and policy makers contemplating reform.

Next, read the actual FCPA statute. It can be found here (in 50 different languages). When reading the FCPA realize that the law appears much more dense than it actually is.  The FCPA’s anti-bribery provisions are divided into three separate prongs (dd-1, dd-2, and dd-3 for “issuers,” “domestic concerns,” and persons other than issuers or domestic concerns).  While each prong contains certain differences – particularly as to jurisdictional issues – the key substantive provisions are essentially repeated three times.

FCPA Enforcement

To start, it is important to recognize that the FCPA is enforced two different ways.

The first (traditional) way is for the enforcement agencies (the DOJ or SEC) to allege FCPA violations and to prove those violations to a judge or jury in the context of an adversarial proceeding.

The second more common approach over the past decade is for the enforcement agencies to utilize leverage over risk-averse business organizations and to resolve alleged FCPA violations through alternative resolution vehicles – such as a non-prosecution agreement or deferred prosecution agreement – in the absence of any meaningful judicial scrutiny.

As to the first way, you should read every substantive FCPA judicial decision – after all there are not that many despite the FCPA being around for 38 years.  At a minimum, read the following cases: U.S. v. Liebo, U.S. v. Esquenazi, U.S. v. Carson, U.S. v. Lindsey Manufacturing, SEC v. Straub, SEC v. Steffen, U.S. v. Kay, SEC v. Mattson, U.S. v. Bourke, SEC v. Jackson, U.S. v. Castle, and SEC v. World-Wide Coin.

As to the second more common way of resolving alleged instances of FCPA violations, you may want to check out this article titled “The Facade of FCPA Enforcement.” In addition,  this article titled “Measuring the Impact of NPAs and DPAs on FCPA Enforcement,” highlights how alternative resolution vehicles have become the dominant way the DOJ resolves corporate FCPA scrutiny and serve as an obvious reason for the general increase in FCPA enforcement over the past decade. To the many cheerleaders of increased FCPA enforcement, NPAs and DPAs are thus worthy of applause. Yet in a legal system based on the rule of law, quality of enforcement is more important than quantity of enforcement. Through empirical data and various case studies, the article measures the impact NPAs and DPAs have on the quality of FCPA enforcement and concludes that NPAs and DPAs — while resulting in higher quantity of FCPA enforcement — result in lower quality of FCPA enforcement.

Despite the prevalence of NPAs and DPAs in FCPA enforcement, on occasion the DOJ or SEC are still put to their burden of proof, and more often than not, the end result is a defense win.  This article asks the question – “What Percentage of DOJ FCPA Enforcement Losses is Acceptable?”

Regardless of how an alleged FCPA violation is resolved, it is important to understand various FCPA enforcement theories by reading actual FCPA enforcement actions. All DOJ FCPA enforcement actions (minus a few exceptions) can be found here and all SEC FCPA enforcement actions (minus a few exceptions) can be found here. For a more in-depth review of every FCPA enforcement action since July 2009 (and most “old” FCPA enforcement actions), visit the FCPA Professor search page and look for the subject-matter tag “(year) enforcement actions.”

Additional Reading on Enforcement and Related Issues

While FCPA enforcement actions by the DOJ or SEC are worthy of attention, a sophisticated understanding of the FCPA is to recognize that settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement.  By coining a new term of art – the “three buckets” of FCPA financial exposure – and through various case studies and examples, this article titled “FCPA Ripples” demonstrates how FCPA scrutiny and enforcement can impact a company’s business operations and strategy in a variety of ways from: pre and post-enforcement action professional fees and expenses; to market capitalization; to cost of capital; to merger and acquisition activity; to impeding or distracting a company from achieving other business objectives; to private shareholder litigation; to offensive use of the FCPA by a competitor or adversary to achieve a business objective or to further advance a litigating position.

The below links contain extensive year-in-review articles regarding FCPA enforcement, enforcement agency policy, and related issues. Combine the below articles and you will have an extensive collection of FCPA enforcement statistics, trends, and other information over time.

  • For 2014, see here.
  • For 2013, see here.
  • For 2012, see here.
  • For 2011, see here.
  • For 2010, see here.
  • For 2009, see here.

For a general overview of the FCPA and its enforcement in a Q&A format, see here for the “FCPA 101” page of FCPA Professor.

Although much tends to be written about the FCPA and its enforcement, there are certain FCPA facts that are seldom discussed. Yet such facts, covering the entire span of the FCPA — from the statute’s enactment, to its statutory provisions, to FCPA enforcement, to FCPA reform, to the FCPA industry itself — occasionally bear repeating.  This article, highlights ten seldom discussed FCPA facts that you need to know.

Guidance / Compliance

It is also worth your time to review other information and sources of guidance relevant to the FCPA.

This include: the SEC’s 1981 guidance concerning the FCPA’s books and records and internal controls provisions (here); the DOJ’s and SEC’s 2012 FCPA Guidance (here); and DOJ FCPA Opinion Procedure Releases (here). For an article titled “Grading the FCPA Guidance” see here.

An FCPA expert should also be well-versed on compliance best practices and benchmarking metrics that can be found in the following documents: the DOJ’s Principles of Prosecution of Business Organizations; the U.S. Sentencing Guidelines; and the OECD Good Practice Guidance on Internal Controls, Ethics, and Compliance.

Looking for a fun way to benchmark FCPA compliance.  See here for the article titled “How a Successful Football Organization Can Inform FCPA Compliance in a Business Organization.”

FCPA Reform

Just because the FCPA may be a fundamentally sound statute does not mean that the FCPA (or its enforcement) could not be improved.

In November 2010, the Senate held an FCPA hearing (see this post for the full hearing transcript and vide0).  In June 2011, the House followed with its own FCPA hearing and here is the transcript.

Much of the discussion in both hearings focused on an FCPA compliance defense. To better understand how an FCPA compliance defense can better accomplish the goals of the FCPA as well as other policy objective see here for the article titled “Revisiting an FCPA Compliance Defense.”

And Finally …

The FCPA is not the only statute in the federal criminal code concerning bribery. Rather, the FCPA was modeled in large part after the U.S. domestic bribery statute, and when speaking of its FCPA enforcement program, the government has recognized that it “could not be effective abroad if we did not lead by example here at home.” Indeed, the policy reasons motivating Congress to enact the FCPA — that corporate payments were subverting the democratic process, undermining the integrity and stability of government, and eroding public confidence in basic institutions — apply with equal force to domestic bribery.

Against this backdrop, this article titled “The Uncomfortable Truths and Double Standards of Bribery Enforcement” explores through various case studies and examples whether the United State’s crusade against bribery suffers from uncomfortable truths and double standards. Through these case studies and examples you can decide for themselves whether the U.S. government “practices what it preaches” when it comes to the enforcement of bribery laws and whether the United States is indeed “in a unique position to spread the gospel of anti-corruption.”

Begin 2016 By Elevating Your FCPA Knowledge At The FCPA Institute – Miami

Featured Image FCPA Institute

Begin 2016 by elevating your Foreign Corrupt Practices Act knowledge and practical skills in Miami, Florida at the FCPA Institute on January 14th – 15th.  The FCPA Institute – Miami also provides participants the opportunity to earn CLE credit as well as a value-added professional credential.

The FCPA Institute is different from other FCPA conferences as information is presented in an integrated and cohesive manner by an expert instructor with FCPA practice and teaching experience.  Moreover, the FCPA Institute promotes active learning by participants through issue-spotting video exercises, skills exercises, small-group discussions, and the sharing of real-world practices and experiences.

To best facilitate the unique learning experience that the FCPA Institute represents, attendance at each FCPA Institute is capped at 30 participants and registrants for the FCPA Institute – Miami already include compliance professionals from leading companies and leading firms from around the world.

Click here to learn more about the FCPA Institute and to register for the Miami event.

At the end of the FCPA Institute, participants can elect to have their knowledge assessed and can earn a certificate of completion upon passing a written assessment tool.  In this way, successful completion of the FCPA Institute represents a value-added credential for professional development. In addition, attorneys who complete the FCPA Institute may be eligible to receive Continuing Legal Education (“CLE”) credits. The FCPA Institute – Miami will be applying for CLE credit and approval is pending in New York and California.  FCPA Institute participants seeking CLE in other states will receive a Uniform Certificate of Attendance that can be used for attorney self-submission in other states. Moreover, previous FCPA Institute participants have successfully obtained continuing education units from the Society of Corporate Compliance and Ethics for attending the FCPA Institute.

Leading law firms and companies across a variety of industry sectors have chosen the FCPA Institute to elevate the FCPA knowledge and practical skills of their employees.

Institute LogosRepresentatives from the organizations at left have attended the FCPA Institute and set forth below is a sampling of what FCPA Institute “graduates” have said about their experience.

*****

“Unlike other FCPA conferences where one leaves with a spinning head and unanswered questions, I left the FCPA Institute with a firm understanding of the nuts and bolts of the FCPA, the ability to spot issues, and knowledge of where resources can be found that offer guidance in resolving an issue.  The limited class size of the FCPA Institute ensured that all questions were answered and the interactive discussion among other compliance professionals was fantastic.” (Rob Foster, In-House Counsel, Oil and Gas Company)

“The FCPA Institute was one of the best professional development investments of time and money that I have made since law school. The combination of black letter law and practical insight was invaluable. I would highly recommend the FCPA Institute to any professional who has compliance, ethics, legal or international business responsibilities.” (Norm Keith, Partner, Fasken Martineau, Toronto).

“The FCPA Institute is very different than other FCPA conferences I have attended.  It was interactive, engaging, thought-provoking and at the completion of the Institute I left feeling like I had really learned something new and useful for my job.  The FCPA Institute is a must-attend for all compliance folks (in-house or external).” (Robert Wieck, CPA, CIA, CFE, Forensic Audit Senior Manager, Oracle Corporation)

The FCPA Institute is a top-flight conference that offers an insightful, comprehensive review of the FCPA enforcement landscape.  Professor Koehler’s focus on developing practical skills in an intimate setting really sets it apart from other FCPA conferences.  One of the best features of the FCPA Institute is its diversity of participants and the ability to learn alongside in-house counsel, company executives and finance professionals. (Blair Albom, Associate, Debevoise & Plimpton)

“The FCPA Institute was a professionally enriching experience and substantially increased my understanding of the FCPA and its enforcement. Professor Koehler’s extensive insight and practical experience lends a unique view to analyzing enforcement actions and learning compliance best practices. I highly recommend the FCPA Institute to practitioners from all career stages.” (Sherbir Panag, MZM Legal, Mumbia, India)

“The FCPA Institute provided an in-depth look into the various forces that have shaped, and that are shaping, FCPA enforcement.  The diverse group of participants provided unique insight into how, at a practical level, various professionals evaluate risk and deal with FCPA issues on a day-to-day basis.  The small group setting, the interactive nature of the event, and the skills assessment test all set the FCPA Institute apart from other FCPA conferences or panel-based events.” (John Turlais, Senior Counsel, Foley & Lardner)

A Christmas Classic

Christmas Star

A Christmas classic from James McGrath, a valued colleague in the FCPA space with a candid wit, who passed away in 2014. The below post originally appeared on McGrath’s Internal Investigations Blog on December 24, 2012.

*****

The allegations being investigated surround gifts being given by individual businessmen to the family of an Israeli government official a number of years ago.  These businessmen – a Mr. Balthasar, a Mr. Gaspar, and a Mr. Melchior – supposedly provided a family in the royal line of King David with significant gifts, including gold, frankincense, and myrrh, in return for favorable consideration of an as-yet undetermined project in the Middle East.

The three men are believed to be third-party intermediaries for a multitude of Christian church organizations within the United States, and any jurisdictional nexus would seem to be predicated upon such a fact, if verified.

Whether any member of the family that received the gifts was or is a “government official” – as that term has come to be expansively defined by the DOJ – is unverified, but nonetheless likely.  While Transparency International’s Corruption Perceptions Index does not reference them in any of its yearly rosters, there is a large volume of other source material that seemingly establishes one or more of them as being related to the ruling family in Israel.

Regardless of the strength of the government’s case in these regards, there is still the hurdle presented by the age of the alleged violations.  They are reported to have occurred approximately 2,012 years ago.  The DOJ could be expected to assert that the clock did not begin to run until the government recently became aware of Balthazar’s, Gaspar’s, and Melchior’s conduct, however, there appears to be a strong argument that voluntary self-disclosure was made some time ago, thus commencing the running – and expiration – of the statutory period.

This line of inquiry will continue in multiple, parallel investigations.

Begin 2016 By Elevating Your FCPA Knowledge At The FCPA Institute – Miami

Featured Image FCPA Institute

Begin 2016 by elevating your Foreign Corrupt Practices Act knowledge and practical skills in Miami, Florida at the FCPA Institute on January 14th – 15th.  The FCPA Institute – Miami also provides participants the opportunity to earn CLE credit as well as a value-added professional credential.

The FCPA Institute is different from other FCPA conferences as information is presented in an integrated and cohesive manner by an expert instructor with FCPA practice and teaching experience.  Moreover, the FCPA Institute promotes active learning by participants through issue-spotting video exercises, skills exercises, small-group discussions, and the sharing of real-world practices and experiences.

To best facilitate the unique learning experience that the FCPA Institute represents, attendance at each FCPA Institute is capped at 30 participants and registrants for the FCPA Institute – Miami already include compliance professionals from leading companies and leading firms from around the world.

Click here to learn more about the FCPA Institute and to register for the Miami event.

At the end of the FCPA Institute, participants can elect to have their knowledge assessed and can earn a certificate of completion upon passing a written assessment tool.  In this way, successful completion of the FCPA Institute represents a value-added credential for professional development. In addition, attorneys who complete the FCPA Institute may be eligible to receive Continuing Legal Education (“CLE”) credits. The FCPA Institute – Miami will be applying for CLE credit and approval is pending in New York and California.  FCPA Institute participants seeking CLE in other states will receive a Uniform Certificate of Attendance that can be used for attorney self-submission in other states. Moreover, previous FCPA Institute participants have successfully obtained continuing education units from the Society of Corporate Compliance and Ethics for attending the FCPA Institute.

Leading law firms and companies across a variety of industry sectors have chosen the FCPA Institute to elevate the FCPA knowledge and practical skills of their employees.

Institute LogosRepresentatives from the organizations at left have attended the FCPA Institute and set forth below is a sampling of what FCPA Institute “graduates” have said about their experience.

*****

“Unlike other FCPA conferences where one leaves with a spinning head and unanswered questions, I left the FCPA Institute with a firm understanding of the nuts and bolts of the FCPA, the ability to spot issues, and knowledge of where resources can be found that offer guidance in resolving an issue.  The limited class size of the FCPA Institute ensured that all questions were answered and the interactive discussion among other compliance professionals was fantastic.” (Rob Foster, In-House Counsel, Oil and Gas Company)

“The FCPA Institute was one of the best professional development investments of time and money that I have made since law school. The combination of black letter law and practical insight was invaluable. I would highly recommend the FCPA Institute to any professional who has compliance, ethics, legal or international business responsibilities.” (Norm Keith, Partner, Fasken Martineau, Toronto).

“The FCPA Institute is very different than other FCPA conferences I have attended.  It was interactive, engaging, thought-provoking and at the completion of the Institute I left feeling like I had really learned something new and useful for my job.  The FCPA Institute is a must-attend for all compliance folks (in-house or external).” (Robert Wieck, CPA, CIA, CFE, Forensic Audit Senior Manager, Oracle Corporation)

The FCPA Institute is a top-flight conference that offers an insightful, comprehensive review of the FCPA enforcement landscape.  Professor Koehler’s focus on developing practical skills in an intimate setting really sets it apart from other FCPA conferences.  One of the best features of the FCPA Institute is its diversity of participants and the ability to learn alongside in-house counsel, company executives and finance professionals. (Blair Albom, Associate, Debevoise & Plimpton)

“The FCPA Institute was a professionally enriching experience and substantially increased my understanding of the FCPA and its enforcement. Professor Koehler’s extensive insight and practical experience lends a unique view to analyzing enforcement actions and learning compliance best practices. I highly recommend the FCPA Institute to practitioners from all career stages.” (Sherbir Panag, MZM Legal, Mumbia, India)

“The FCPA Institute provided an in-depth look into the various forces that have shaped, and that are shaping, FCPA enforcement.  The diverse group of participants provided unique insight into how, at a practical level, various professionals evaluate risk and deal with FCPA issues on a day-to-day basis.  The small group setting, the interactive nature of the event, and the skills assessment test all set the FCPA Institute apart from other FCPA conferences or panel-based events.” (John Turlais, Senior Counsel, Foley & Lardner)

Begin 2016 By Elevating Your FCPA Knowledge At The FCPA Institute – Miami

Featured Image FCPA Institute

Begin 2016 by elevating your Foreign Corrupt Practices Act knowledge and practical skills in Miami, Florida at the FCPA Institute on January 14th – 15th.  The FCPA Institute – Miami also provides participants the opportunity to earn CLE credit as well as a value-added professional credential.

The FCPA Institute is different from other FCPA conferences as information is presented in an integrated and cohesive manner by an expert instructor with FCPA practice and teaching experience.  Moreover, the FCPA Institute promotes active learning by participants through issue-spotting video exercises, skills exercises, small-group discussions, and the sharing of real-world practices and experiences.

To best facilitate the unique learning experience that the FCPA Institute represents, attendance at each FCPA Institute is capped at 30 participants and registrants for the FCPA Institute – Miami already include compliance professionals from leading companies and leading firms from around the world.

Click here to learn more about the FCPA Institute and to register for the Miami event.

At the end of the FCPA Institute, participants can elect to have their knowledge assessed and can earn a certificate of completion upon passing a written assessment tool.  In this way, successful completion of the FCPA Institute represents a value-added credential for professional development. In addition, attorneys who complete the FCPA Institute may be eligible to receive Continuing Legal Education (“CLE”) credits. The FCPA Institute – Miami will be applying for CLE credit and approval is pending in New York and California.  FCPA Institute participants seeking CLE in other states will receive a Uniform Certificate of Attendance that can be used for attorney self-submission in other states. Moreover, previous FCPA Institute participants have successfully obtained continuing education units from the Society of Corporate Compliance and Ethics for attending the FCPA Institute.

Institute LogosLeading law firms and companies across a variety of industry sectors have chosen the FCPA Institute to elevate the FCPA knowledge and practical skills of their employees.

Representatives from the organizations at left have attended the FCPA Institute and set forth below is a sampling of what FCPA Institute “graduates” have said about their experience.

*****

“Unlike other FCPA conferences where one leaves with a spinning head and unanswered questions, I left the FCPA Institute with a firm understanding of the nuts and bolts of the FCPA, the ability to spot issues, and knowledge of where resources can be found that offer guidance in resolving an issue.  The limited class size of the FCPA Institute ensured that all questions were answered and the interactive discussion among other compliance professionals was fantastic.” (Rob Foster, In-House Counsel, Oil and Gas Company)

“The FCPA Institute was one of the best professional development investments of time and money that I have made since law school. The combination of black letter law and practical insight was invaluable. I would highly recommend the FCPA Institute to any professional who has compliance, ethics, legal or international business responsibilities.” (Norm Keith, Partner, Fasken Martineau, Toronto).

“The FCPA Institute is very different than other FCPA conferences I have attended.  It was interactive, engaging, thought-provoking and at the completion of the Institute I left feeling like I had really learned something new and useful for my job.  The FCPA Institute is a must-attend for all compliance folks (in-house or external).” (Robert Wieck, CPA, CIA, CFE, Forensic Audit Senior Manager, Oracle Corporation)

The FCPA Institute is a top-flight conference that offers an insightful, comprehensive review of the FCPA enforcement landscape.  Professor Koehler’s focus on developing practical skills in an intimate setting really sets it apart from other FCPA conferences.  One of the best features of the FCPA Institute is its diversity of participants and the ability to learn alongside in-house counsel, company executives and finance professionals. (Blair Albom, Associate, Debevoise & Plimpton)

“The FCPA Institute was a professionally enriching experience and substantially increased my understanding of the FCPA and its enforcement. Professor Koehler’s extensive insight and practical experience lends a unique view to analyzing enforcement actions and learning compliance best practices. I highly recommend the FCPA Institute to practitioners from all career stages.” (Sherbir Panag, MZM Legal, Mumbia, India)

“The FCPA Institute provided an in-depth look into the various forces that have shaped, and that are shaping, FCPA enforcement.  The diverse group of participants provided unique insight into how, at a practical level, various professionals evaluate risk and deal with FCPA issues on a day-to-day basis.  The small group setting, the interactive nature of the event, and the skills assessment test all set the FCPA Institute apart from other FCPA conferences or panel-based events.” (John Turlais, Senior Counsel, Foley & Lardner)

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