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Friday Roundup

Elevate, a double standard dandy, scrutiny alert, and quotable.

It’s all here in the Friday roundup.

Elevate

Elevate your Foreign Corrupt Practices Act substantive knowledge and practical skills at the FCPA Institute – Nashville on May 2-3. As highlighted here [1], 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.

FCPA Institute participants not only gain knowledge, practical skills and peer insight, but can also elect to have their knowledge assessed to 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 are also eligible to receive Continuing Legal Education (“CLE”) credits and prior FCPA Institute participants have also received continuing education units from the Society of Corporate Compliance and Ethics.

Law firm lawyers, in-house counsel, accounting and auditing professionals and others have already registered for the FCPA Institute – Nashville. To join this group, click here [2] to register.

A Double Standard Dandy

Daily readers know that “double standard” issues are occasionally highlighted on these pages. Many of the examples highlighted are discussed in this article “The Double Standards and Uncomfortable Truths of Bribery Enforcement.” [3]

I am no election law expert and recognizing that the issues in this CNN video titled “Is it Legal to Bribe Convention Delegates?” [4] are presented as “what ifs,” but still this has the potential to be a double standard dandy. (See also this Bloomberg article [5] which also touches upon the issue).

Stay tuned to FCPA Professor for continuing coverage of FCPA enforcement actions that contain allegations about “golf in the morning and beer drinking in the evening [6],” and other various things of value such as flowers, cigarettes, bottles of wine, evenings at karaoke bars, and sauna and spa sessions, provided to what the U.S. government alleges are “foreign officials” under the FCPA.

Scrutiny Alert

Och-Ziff, a publicly-traded hedge fund, has been under FCPA scrutiny since 2011 (no that is not a typo).

This recent Wall Street Journal states [7]:

“Federal authorities are wrangling with hedge fund Och-Ziff Capital Management Group LLC over a possible criminal guilty plea and the amount of potential financial sanctions as they wrap up a five-year international bribery investigation according to people familiar with the matter.

The Justice Department is pushing for the company to plead guilty, which would be rare for a major financial institution. Securities regulators also are seeking civil sanctions of as much as $400 million from Och-Ziff, based on what they believe were the company’s profits from alleged bribery overseas, these people said.

Och-Ziff’s lawyers have argued that the company shouldn’t be held criminally liable, and any potentially illegal behavior wasn’t widely known at the firm, with profits from the activities in question totaling less than $100 million, these people said.

The investigations by Justice and the Securities and Exchange Commission have examined whether Och-Ziff, the nation’s largest publicly traded hedge-fund firm with $42 billion of assets under management, knowingly paid bribes to government officials to obtain an investment from Libya’s sovereign-wealth fund and in natural-resources deals in other African countries, these people said.”

The largest SEC FCPA enforcement action of all-time (in terms of settlement amount) was the 2008 enforcement action against Siemens in which the SEC component was $350 million. Even this action though was an outlier as the 2nd and 3rd largest SEC FCPA enforcement actions of all-time are Halliburton ($177 million) and Alcoa ($175 million).

As often occurs in connection with media coverage of the FCPA, the market over-reacted. On Tuesday, (the day of the WSJ story) Och-Ziff shares fell approximately 25%. Since then the company’s share price has regained nearly all this value.

Quotable

High-ranking DOJ officials sure do give a lot of speeches. The latest is this speech [8] from Assistant Attorney General Leslie Caldwell in Colombia. On the issue of corruption, Caldwell stated:

“[T]he Criminal Division has focused significant prosecutorial resources into investigating foreign corruption, especially that involving American businesses.  In the United States, in addition to our domestic anti-bribery and fraud laws, we have the Foreign Corrupt Practices Act, or FCPA.  The FCPA prohibits the paying of bribes to foreign government officials to assist in obtaining or retaining business, and it applies to most companies whose business has a nexus to the United States.  This law mirrors Colombia’s newly-passed transnational corruption regulatory law, except that the FCPA is a criminal law.  Through the FCPA’s extraterritorial reach, the United States ensures that its corporate entities do not contribute to a climate of corruption in the foreign countries where they operate, and that they do not undermine the free market through unfair economic advantage.

Enforcement of the FCPA frequently requires effective international cooperation.  Just last year, for instance, the former co-chief executive officer of PetroTiger Ltd.—a British Virgin Islands oil and gas company with operations in Colombia and previously an office in the United States—pleaded guilty to conspiring to pay bribes to a Colombian official at EcoPetrol in exchange for securing a $45 million oil services contract.”

The enforcement action Caldwell refers to above is U.S. v. Joseph Sigelman. Interesting though that Caldwell failed to mention that the DOJ’s case fell apart when the presiding judge asked the DOJ’s star witness “did you have a hallucination?” (For more on this DOJ trial court debacle see this prior post [9] as well as posts embedded therein).

On the topic of asset recovery, Caldwell stated:

“Criminal prosecution is only one aspect of the rule of law and justice.  Seizure of the assets and proceeds derived from corruption or financial crimes as well as other crimes is also essential.  The genesis of most criminal activity is greed, wealth and power.  Putting criminals in jail is not enough.  You must take away the very reason for their acts—the wealth and benefits they attained illegally and at the expense of innocent victims.  Within the Criminal Division, we rely on the expertise of our Asset Forfeiture and Money Laundering Section for sensitive and highly-sophisticated money laundering investigations and forfeiture proceedings.  I hope that by sharing our experiences in this area, we can assist in the successful implementation of Colombia’s recently enacted asset forfeiture law.  Forfeiture in the context of cross-border crime requires coordination, and so we also hope to conclude an asset-sharing agreement to permit the United States to share forfeited assets with Colombia, to return stolen assets that belong to the Colombian people.  Our long-term vision is to build a partnership with Colombia in this area, which is critical to rule of law and justice.”

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A good weekend to all.