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Friday Roundup

Roundup

Quotable, FCPA issues at City Hall, and for the reading stack. It’s all here in the Friday roundup.

Quotable

In this recent post titled “Judicial Scrutiny of Corporate Monitors: Additional Uncertainty for FCPA Settlements?” Debevoise attorneys Andrew Levine, Philip Rohlik and Michael Gramer note:

“Like many other complex corporate criminal matters, FCPA matters largely get resolved without meaningful judicial oversight. […] In complex cases, corporate criminal enforcement can follow the largely consensual process that has evolved in the FCPA arena.  After a long period of investigation, in which a company often cooperates, the company and DOJ negotiate a resolution, based on legal theories and facts largely determined by the DOJ.

[…]

Many commentators have criticized the effective abdication of the judiciary’s oversight role in corporate resolutions. In particular, such negotiated resolutions could be viewed as running contrary to the U.S. system of checks and balances, and sometimes allowing the government to extract large penalties based on novel and often untested legal theories, which might not hold up were a case to go to trial (as arguably suggested by the scarcity of parallel individual actions associated with corporate resolutions).  Despite these drawbacks, negotiated resolutions between corporations and the government have become the norm in the FCPA context and elsewhere, in large part due to the regularity and finality they offer corporations.”

Spot-on.

I began writing about the “Facade of FCPA Enforcement” in 2010 and the situation has become worse since. What surprises me the most is, the above comments notwithstanding, the general apathy surrounding the erosion of the rule of law.

FCPA Issues at City Hall

In running searches for FCPA content every day, I come across some unusual items from time to time.

For instance, this article highlights how a proposed $13.7 million energy savings between Fort Myers, Florida and Siemens is attracting controversy. The article states:

“A simple Google search would’ve found that the multinational corporation Fort Myers wants to do $13.7 million worth of business with has a history of breach of contract lawsuits, and has paid more than $800 million in civil and criminal fines to settle longstanding corruption charges. But that information slipped through the cracks despite a “very thorough vetting” process, as described by city spokeswoman Kirsten O’Donnell.

[…]

But after a News-Press reporter started asking questions about the company’s history with lawsuits surrounding similar deals, the city attorney’s office urged officials to “do more due diligence now that this has come forward,” according to emails obtained by The News-Press.  “I’m thankful the information was provided. The media can help us,” City Attorney Grant Alley said, adding this information did not come to light until a News-Press story announced the agreement. And if any other departments were aware of Siemens’ history, “I hope they would’ve shared that with me.” But the company’s troubles are well reported across the country and span the past decade.”

I’m not sure that a 2008 FCPA enforcement action should impact a 2017 contract, but the apparent lack of due diligence by a city government is fairly astounding given the massive amount of coverage Siemens FCPA (and related) enforcement actions attracted.

For the Reading Stack

The most recent edition of Debevoise & Plimpton’s always informative FCPA Update is here with articles on the recent Kokesh disgorgement decision and the recent Linde enforcement action.

For additional Kokesh related writings, see here from Professor Stephen Bainbridge and here from former SEC enforcement director Andrew Ceresney on “The Impact of the Kokesh Decision on Disgorgement for Conduct Within the Statute of Limitations.”

Shearman & Sterlings “Recent Trends and Patterns in the Enforcement of the FCPA” is here.

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