Last Thursday was a big speech day for Deputy Attorney General Rod Rosenstein. In addition to announcing a new non-binding DOJ policy on “coordination of corporate resolution penalties,” (see here and here for prior posts) Rosenstein also appeared at an FCPA conference and delivered this speech (continuing the disgraceful practice of for-profit conference firms using our public officials to drive attendance to their paid events).
Rosenstein’s speech was in part duplicative of his earlier “piling on” speech, but this post highlights Rosenstein’s general statements on the FCPA, foreign law enforcement cooperation, and the DOJ’s recent so-called declination.
Rosenstein began by stating:
“The rule of law is essential to commerce. It allows people to enter contracts, make investments and project revenue with some assurance about the future. It establishes a mechanism to resolve disputes, and it provides a degree of protection from arbitrary government action. Foreign Corrupt Practices Act enforcement focuses on the global marketplace, because the world is interconnected. Economic problems in distant places affect American businesses and financial markets. So too does foreign corruption. Foreigners who avail themselves of the American marketplace need to abide by our rules and standards. And our citizens, whether doing business here or overseas, remain accountable to the statutes and regulations of this great and prosperous nation. Paying bribes to government officials is destructive because it impels leaders to advance their personal interests instead of the interests of their citizens.
Thomas Jefferson famously stated: “On matters of style, swim with the current. On matters of principle, stand like a rock.” We must always stand for the principle that government exists to serve the interests of the citizens. Before the FCPA was enacted in 1977, paying bribes was viewed as an ordinary aspect of doing business overseas. Some businesses believed that prohibiting corrupt payments would put them at a competitive disadvantage. But Congress passed the FCPA with bipartisan support, and the marketplace adapted to America’s effort to establish and enforce anti-bribery laws. The Organization for Economic Co-operation and Development (OECD) adopted an Anti-Bribery Convention in 1997. The Convention established legally binding standards to prohibit bribery of public officials in international business transactions. Forty-three countries are now signatories to the Anti-Bribery Convention. The United States was one of the first. Our leadership through the years encouraged other major world powers to commit to doing business with integrity.”
Regarding foreign law enforcement cooperation, Rosenstein stated:
“Last November, the Department co-hosted a conference with the Securities and Exchange Commission and the OECD. The conference focused on strengthening international anti-bribery initiatives and improving coordination across borders. Federal prosecutors and investigators recently secured a number of convictions and other resolutions against companies and individuals in major FCPA-related cases. The FCPA Unit has announced eight guilty pleas since the start of 2018 alone. Our FCPA Unit Chief, Dan Kahn, is hard at work, along with the excellent Assistant U.S. Attorneys from the Eastern and Southern Districts of New York who participated in this conference. We also benefit from the exceptional assistance of the Securities and Exchange Commission and other federal agencies, as well as law enforcement partners around the world. The Department works closely with counterparts in the United Kingdom, France, Germany, Switzerland, the Netherlands, Brazil, and many other nations. Last December, we announced the first coordinated resolution with enforcement authorities in Singapore. That investigation secured a $400 million corporate resolution involving a deferred prosecution agreement, a related guilty plea by a subsidiary, and a guilty plea by an individual executive. Corruption is often a tool for companies that are unable to keep up with competitors through innovation, quality, and efficiency. When we speak of leveling the playing field for businesses, we mean leveling up to higher standards, not down.”
Like prior DOJ officials have done previously (see here for the prior post), Rosenstein next nicely articulated the policy rationale underlying an FCPA compliance defense when he stated:
“Law enforcement efforts are most effective when we build bridges with law-abiding members of the business community. One of America’s best crime-fighting weapons is the ingenuity and integrity of its people. Good corporate citizens play a critical role in upholding the rule of law. So the Department should reward companies that try in good faith to deter crime. That means developing corporate compliance programs that help to prevent problems in the first instance, and that detect problems early and stop them from spreading. It also means investigating misconduct, voluntarily reporting it, cooperating fully in investigations, and implementing appropriate remedies.
Corporate America should regard law enforcement as an ally. In turn, the government should provide incentives for companies to engage in ethical corporate behavior and to assist in federal investigations. That is the best way to deter crime and maintain the rule of law.”
Rosenstein next stated:
“Two weeks ago, we announced the first corporate declination under our new FCPA Policy. The company engaged in responsible corporate conduct after discovering of a violation and satisfied the rigorous requirements of the policy. The Department gave the company credit for its disgorgement as part of a $9 million payment in a related SEC administrative proceeding. So I hope you will advise your clients to work more closely with the Department when FCPA issues arise. It is the right thing to do, and it makes strategic sense.”
Before you fall hook-line-and-sinker for this rhetoric, read this post and ask yourself: just what viable criminal charges against Dun & Bradstreet did the DOJ actually decline?
Based on information in the public domain, the answer appears to be none.
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