Recently, Public Citizen (a non-profit organization which bills itself as “serv[ing] as the people’s voice in the nation’s capital”) released this letter about Wal-Mart’s FCPA scrutiny and sent to U.S. Attorney General Loretta Lynch and SEC Chair Mary Jo White.
The sophomoric letter invokes almost exclusively the writings of a non-lawyer journalist from the New York Times (who reported on Wal-Mart issues in 2012, but has since not written another article about Wal-Mart) and calls for “vigorous prosecution of both the companies and individuals involved in the alleged bribery and cover-up.”
Substantively, the sophomoric letter is about two pages long and in those short two pages the general qualifier – if the New York Times article is accurate – is invoked nearly ten times.
That’s a big if.
As previously highlighted on this site, during Wal-Mart’s FCPA scrutiny I’ve communicated with the New York Times Journalist who wrote the Wal-Mart articles and expressed concerns about the FCPA aspects of the article and how the article omitted certain relevant legal information. In addition, and as previously shared on this site, I appeared with the journalist at the ABA’s Sixth Annual National Institute on the Foreign Corrupt Practices Act on a panel titled “Captain or Passenger?: How to Navigate the Rough Waters of an FCPA Media Crisis.” During the event, I again questioned certain of the FCPA information in the New York Times articles and the response of the journalist was along the following lines: I am a journalist, I tell stories, I leave the legal issues to others.
Even though Public Citizen’s sophomoric letter relies almost exclusively on the New York Times articles, the letter wholly ignores other aspects of even the New York Times reporting. For instance, and as previously highlighted on this site, even the New York Times stated that Wal-Mart’s subsidiary in Mexico “had taken steps to conceal [the payments] from Wal-Mart’s headquarters in Bentonville, Ark.” and that Wal-Mart Mexico’s chief auditor altered reports sent to Bentonville discussing various problematic payments.
Further, even the New York Times suggested that Wal-Mart’s December 2011 FCPA disclosure (long before the New York Times ran its front-page article in April 2012) was motivated by Wal-Mart’s desire to pro-actively understand its FCPA risk (notwithstanding whatever may have occurred within the company in 2005 upon learning of potentially problematic payments in Mexico). According to the New York Times, Wal-Mart’s internal review began in Spring 2011 when Jeffrey Gearhart (Wal-Mart’s general counsel) learned of an FCPA enforcement action against Tyson Foods (like Wal-Mart, a company headquartered in Arkansas). According to the New York Times article, “the audit began in Mexico, China and Brazil, the countries Wal-Mart executives considered the most likely source of problems” and Wal-Mart hired KPMG and Greenberg Traurig to conduct the audit.
Finally, even the New York Times rightly noted that Wal-Mart’s investigation “was uncovering the kinds of problems and oversights that plague many global corporations.” It was perhaps the most insightful thing the New York Times said about Wal-Mart’s FCPA scrutiny.
This site has repeatedly stressed that Wal-Mart’s FCPA scrutiny should not depend on a talented journalist at a leading newspaper writing a story about a well-known company. Indeed, the New York Times stories would have been largely the same if the journalist and the New York Times devoted its significant resources to other instances of FCPA scrutiny.
In short, Wal-Mart’s FCPA scrutiny is not “an important moment for law enforcement” as suggested by Public Citizen’s letter. Rather, Wal-Mart is one of likely several hundred business organizations currently under FCPA scrutiny and for reasons that arguably do not even violate the FCPA as intended by Congress and as interpreted by courts. (See here for the article “FCPA Enforcement As Seen Through Wal-Mart’s Potential Exposure.”
Law enforcement ought to be based on the facts and the law and not the writings of a non-lawyer journalist and not on the size of the company.
The rule of demands nothing less.
Does Public Citizen care about the rule of law?
Indeed, the New York Times articles that serve as the almost exclusive basis for its letter to the DOJ and SEC concerned conduct over a decade old.
Has Public Citizen heard that statute of limitations are a fundamental tenet of the rule of law?
Recently the U.S. Supreme Court stated:
“Statute of limitations are intended to ‘promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. They provide ‘security and stability to human affairs. [They] are ‘vital to the welfare of society [and] ‘even wrongdoers are entitled to assume that their sins may be forgotten.’ […] It ‘would be utterly repugnant to the genius of our laws if actions for penalties could ‘be brought at any distance of time.’”
Public Citizen’s sophomoric letter also contains the following statement:
“Of course, if the government concluded that the Times reporting was inaccurate, then Wal-Mart and the public are entitled to a clear statement to such effect.”
Good lord, if the government were to issue a statement every time a non-lawyer journalist wrote an inaccurate, misleading, or out-of-context article about a legal topic, would the government have time to do anything else?