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DOJ Announces “New” One-Year FCPA “Pilot Program”

For over a decade, DOJ officials have tried to motivate business organizations to voluntarily disclose Foreign Corrupt Practices Act violations.

In what should be seen as an acknowledgement that such long-standing efforts have not been as successful as the DOJ might hope, in a┬ápress conference this morning, Assistant Attorney General Leslie Caldwell and DOJ Fraud Section Chief Andrew Weissmann announced a new one-year Foreign Corrupt Practices Act “pilot program.”

According to the DOJ officials, the purpose of the “pilot program” is provide guidance to DOJ FCPA prosecutors about resolutions in corporate FCPA cases and to motivate companies to self-disclose and fully cooperate with the DOJ’s fraud section in FCPA enforcement actions.

Prior to summarizing the press conference (which I attended via telephone) let me offer my own two cents.

“To knowledgeable observers, there is little that is new in today’s DOJ announcement of a “pilot program”. Just by holding a press conference and ascribing a new label to something, does not make something new. The objectives of the DOJ are laudable, however if the DOJ best wants to accomplish its objectives, this new “pilot program” is not the best answer. Rather, as current Fraud Section Chief Andrew Weissmann (and several other former high-ranking DOJ officials) have recognized, an FCPA compliance defense is the best incentive to get companies to voluntary disclose FCPA violations by employees or agents within its organization. For additional information on how such an approach can best position the DOJ to better achieve its policy objectives, see prior posts here [1] and here [2].”

According to Caldwell, the goal of the “pilot program” (see here [3] and here [4] for additional details) is to “encourage self-reporting” because companies have information about individuals who have violated the FCPA and have documents relevant to FCPA violations. According to Caldwell, the goal of the program is to “encourage” companies to give the DOJ this information.

DOJ Fraud Section Chief Weissman was asked how this new “pilot program” is different than the information that has long been in the public domain about voluntary disclosure and cooperation. Weissmann merely stated that the “pilot program” draws a “clear distinction” between credit a company will receive for voluntary disclosure as opposed to companies that decide to wait and see if they get caught and then decide to cooperate.

According to the DOJ officials, “the main goal” of the pilot program is to better successfully prosecute individuals for FCPA violations and to better incentivize companies to disclose in the first place.

Asked why the DOJ was announcing the “pilot program,” Caldwell stated that the DOJ is “confident that there are lots of FCPA violations” that do not come to the DOJ’s attention.

DOJ officials acknowledged that the one-year “pilot program” may not accomplish its desired objectives and if that is the case the DOJ might tweak the program or scrap it altogether.

According to Caldwell, companies that have already self-reported to the DOJ and are in the enforcement pipeline, may be able to avail themselves of the “pilot program” on a case-by-case basis.

Stay tuned to FCPA Professor for additional posts regarding this development.