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DOJ Enforcement Of The FCPA – Year In Review

A previous post [1] highlighted facts and figures from SEC enforcement of the FCPA in 2013.

This post highlights facts and figures from DOJ FCPA enforcement in 2013.  (See here [2] for a similar post from 2012, here [3] for a similar post from 2011, and here [4] from 2010).

In 2013, the DOJ brought 7 corporate FCPA enforcement actions.  By comparision, in 2012 the DOJ brought 9 corporate FCPA enforcement actions, in 2011 the DOJ brought 11 corporate enforcement actions, and in 2010 the DOJ brought 17 corporate enforcement actions.  (Note:  these figures, like the previous SEC figures, use the “core” approach to FCPA statistics – see here [5] for the prior post – an approach also endorsed by the DOJ – see here [6]).

Fine Amounts

In the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million in criminal fines.  By comparison, in 2012, the DOJ collected approximately $142 million in criminal fines; in 2011, the DOJ collected approximately $355 million in criminal fines ($504 million including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action); and in 2010, the DOJ collected approximately $870 million in criminal fines.

DOJ FCPA enforcement in 2013 ranged from $245.2 million in criminal fines (Total) to $882,000 in criminal fines (Ralph Lauren).  1 FCPA enforcement action in 2013 was DOJ only (Bilfinger).

Of the $420 million the DOJ collected in 2013 corporate FCPA enforcement actions, approximately $245.2 million (58%) was in one enforcement action (Total).  Combined with the Weatheford enforcement action ($87.2 million), two enforcement actions comprised 79% of the $420 million the DOJ collected in 2013 corporate FCPA enforcement actions.

In 3 of the 6 corporate FCPA enforcement actions where an analysis was possible, the DOJ agreed to a criminal fine below the minimum range suggested by the sentencing guidelines.  In these 3 actions, the average was approximately 28% below the minimum guidelines range and the distribution range was 35% below the minimum guidelines range (ADM) to 20% below the minimum guidelines range (Parker Drilling).  In 3 corporate FCPA enforcement actions in 2013 (Bilfinger, Weatherford, and Total), the company paid a criminal fine within the guidelines range – either the minimum amount suggested by the guidelines or very close to the minimum amount.

[Note – why are only 6 of the 7 corporate enforcement actions included in the above analysis? 1 corporate enforcement action involved an NPA only and the DOJ did not set forth a guidelines range in the agreement or related documents.  Note, the ADM enforcement action also included an NPA, but the DOJ set forth a guidelines range in the related plea agreement involving ADM’s subsidiary]

Corporate vs. Individual Prosecutions

How many corporate FCPA enforcement actions in 2013 involved related individual prosecutions of company employees by the DOJ (recognizing that such prosecutions may be forthcoming in the future)?  Of the 7 corporate DOJ enforcement actions in 2013, 0 (0%) involved any related DOJ prosecutions of company employees.

The DOJ brought or announced 12 individual FCPA enforcement actions in 2013 in four core actions (3 individuals associated with Direct Access Partners, 4 individuals associated with Alstom, 4 individuals associated with BizJet, and 1 individual associated with Maxwell Technologies).  The individual actions against those associated with BizJet and Maxwell Technologies relate back to previous FCPA enforcement actions against the companies and thus do not increase the number of “core” FCPA enforcement actions.  (See this [5] prior post “What is an FCPA Enforcement Action”).  Stay tuned for future posts that will update various individual FCPA enforcement data (both DOJ and SEC).

NPAs / DPAs

What about non-prosecution and deferred prosecution agreements vs. old fashioned law enforcement (i.e. if a company committed a crime the DOJ charged it and if the company did not commit a crime the DOJ did not charge it)?  In 2013, 100% of corporate DOJ enforcement actions involved either an NPA (ADM and Ralph Lauren) or a DPA (Bilfinger, Weatherford, Diebold, Total, and Parker Drilling).  [Note, the ADM enforcement action involved a plea agreement as to a subsidiary and an NPA with ADM and the Weatherford enforcement action involved a plea agreement as to a subsidiary and a DPA with Weatherford.]

By way of comparison, in 2012 100% of corporate DOJ enforcement actions involved either an NPA or a DPA;  in 2011 82% of corporate DOJ enforcement actions were resolved via an NPA or DPA; and in 2010, 94% of corporate DOJ enforcement actions were resolved via such agreements.

In short, since 2010, 93% of corporate DOJ enforcement actions have been resolved via NPAs or DPAs.

Voluntary Disclosures

Of the 7 corporate DOJ FCPA enforcement actions in 2013, 4 enforcement actions (57%) were the result of corporate voluntary disclosures (ADM, Diebold, and Ralph Lauren) or the direct result of a related voluntary disclosure (the Bilfinger enforcement action was a direct result of a previous voluntary disclosure by Willbros Group).  2 enforcement actions (Parker Drilling and Total) appear to have been based on corporate disclosures following an industry sweep.  1 enforcement action (Weatherford) was based on the Iraq Oil for Food program.

Monitors

Of the 7 corporate DOJ FCPA enforcement actions in 2013, 4 enforcement actions (57%) (Bilfinger, Weatherford, Diebold and Total) involved a monitor.  The monitor term ranged from 3 years (Total) to 18 months (Bilfinger, Weatherford and Diebold).

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2013.

ADM (Dec. 20th)

See here [7] for the prior post.

Charges:  Criminal information against Alfred Toepfler International Ukraine (ATCI Ukraine) charging conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle:  Charges against ATCI Ukraine were resolved via a plea agreement; ADM agreed to a non-prosecution agreement (3 year term) which references violations of the FCPA’s internal controls provisions.

Guidelines Range:  $27.3 million to $54.6 million

Penalty:  $17.7 million

Disclosure:  Voluntary disclosure

Monitor: No

Individuals Charged: No

Bilfinger (Dec. 9th)

See here [8] for the prior post.

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and two substantive FCPA anti-bribery charges

Resolution Vehicle:  Criminal information resolved through a deferred prosecution agreement (3 year term)

Guidelines Range:  $28 million to $56 million

Penalty:  $32 million.

Disclosure:  The enforcement action was the direct result of the 2008 Willbros enforcement action which was the result of a voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged: No

Weatheford International  (Nov. 26th)

See here [9] for the prior post.

Charges:  The criminal information against Weatherford Services Ltd. charged a violation of the FCPA’s anti-bribery provisions, the criminal information against Weatherford International Ltd. charged a violation of the FCPA’s internal controls provisions

Resolution Vehicle:  The charges against Weatherford Services were resolved via a plea agreement, the charges against Weatherford International were resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:  $87.2 million to $174.4 million

Penalty:  $87.2 million

Disclosure:  The enforcement action was the result of the DOJ and SEC’s investigation of the company in connection with the Iraq oil-for-food program

Monitor:  Yes (18 months)

Individuals Charged:  No

Diebold (Oct. 22nd)

See here [10] for the prior post.

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and books and records provisions; and substantive FCPA books and  records violations.

Resolution Vehicle:  Criminal information resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:   $36 million to $72 million

Penalty:  $25.2 million

Disclosure:  Voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged:  No

Total  (May 29th)

See here [11] for the prior post.

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s books and records and internal controls provisions.

Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement (3 year term).

Guidelines Range:  $235.2 to $470.4 million.

Penalty:  $245.2 million.

Disclosure:  The company disclosed as follows.  “In 2003, the SEC followed by the DOJ issued a formal order directing an investigation in connection with the pursuit of business in Iran by certain oil companies, including among others, Total.”

Monitor: Yes (3 year term)

Individuals Charged: No.

Ralph Lauren (April 22nd)

See here [12] for the prior post.

Charges:  None.

Resolution Vehicle: Non-prosecution agreement (2 year term).

Guidelines Range:  Not set forth in the NPA.

Penalty:  $882,000

Disclosure:  Voluntary disclosure.

Monitor: No.

Individuals Charged: No.

Parker Drilling (April 16th)

See here [13] for the prior post.

Charges: FCPA’s anti-bribery violations.

Resolution Vehicle:  Criminal information resolved via a deferred prosecution agreement (3 year term).

Guidelines Range: $14.7 million to $29.4 million.

Penalty: $11.8 million.

Disclosure: Industry sweep related to Panalpina enforcement action.

Monitor: No.

Individuals Charged: No.