Before Charles Duross, Mark Mendelsohn and others headed the DOJ’s FCPA unit, there was Richard Shine. The year was 1982 and Shine was Chief, Multinational Fraud Branch, Criminal Division, U.S. Department of Justice (the name given to the DOJ’s then de facto FCPA Unit). Shine gave a lecture titled “Enforcement of the FCPA by the Department of Justice” at Syracuse University that was published by the Syracuse Journal of International Law & Commerce – see 9 Syr. J. Int’l L. & Com. 283 (1982).
Three things stand out from Shine’s lecture.
First, the lecture is populated with references to the FCPA’s legislative history. On one level, this is not surprising given that in 1982 the DOJ was likely still finding its way as to the FCPA and its enforcement and it is logical that the legislative history which evidences Congressional intent would be a guide.
Yet the passage of time should make the FCPA’s legislative history and the Congressional intent it represents no less relevant today.
Second, under the heading “Enforcement Policies of the Justice Department,” Shine’s lecture evidences DOJ’s recognition and understanding of the primary foreign policy motivation Congress had in enacting the FCPA and how FCPA inquiries focused on the conduct of foreign governments and thus presented national security issues. Shine stated as follows. “Because of the obvious sensitivity both from a national security point of view and a foreign policy point of view, the Department has administered the enforcement of this statute quite differently than the enforcement of most of the provisions of Title 18 of the United States Code. Administration of the enforcement effort has been highly centralized. Generally, FCPA cases, by the terms of the United States Attorney’s Manual, are not investigated and prosecuted by the ninety-four United States Attorney’s Offices around the country. They are primarily investigated and prosecuted by the Multinational Fraud Branch in the Criminal Division at the Justice Department. Among other reasons, that is being done to make sure that there is a nationally uniform enforcement policy. Moreover, virtually any step that is taken in the investigative process, even more than in the post-indictment process, has potentially significant foreign policy and national security implications.” In speaking of “Investigative Procedures,” Shine stated as follows. “When an informant or an insider tells us that there is a bribe in process or that a bribe of a foreign government official has already occurred, we do not immediately notify the foreign government. As you can well imagine, if we started to communicate to a foreign government every unsupported and uncorroborated allegation of bribery of its officials, there would be worldwide foreign relations turmoil …”. Only after we have concluded, as a result of our initial investigation, that indeed there is a significant reason to believe a bribe was paid or offered to a foreign government official, do we notify the foreign government.”
With numerous FCPA enforcement actions in this new era based on alleged payments to alleged state-owned or state-controlled enterprises with many attributes of private commercial enterprises and with numerous FCPA enforcement actions also based on foreign licenses, customs, and certification issues, can it truly be said that in this new era most FCPA enforcement actions present “significant foreign policy and national security implications.” If the answer is no, what does it say about these numerous enforcement actions?
Third, Shine discusses the identity of the foreign official allegedly bribed. Shine stated as follows. “In our public pleadings, whether we are bringing an indictment or filing a civil complaint, generally we will not agree to withhold the identity of the foreign country or of the foreign official.”
As highlighted in this recent post concerning the SEC’s response to the Jackson and Ruehlen motion to dismiss, the SEC argues that “the name, title or exact position of the official need not be pleaded or proved” and the DOJ has likewise argued the same in other actions.
I first learned of Shine’s lecture and published article this past March when Duross participated in “The FCPA at Thirty-Five and Its Impact on Global Business” symposium at The Ohio State University Moritz College of Law (see here for the prior post). Duross referenced the article in stating that the DOJ’s FCPA enforcement practices and policies have been consistent over time and that even though the FCPA is approaching its 35th year, not much has changed in terms of DOJ practices and policies. To be sure, Duross is correct in part. Yet, as the above excerpts from Shine’s 1982 lecture demonstrate, when viewed in the context of the FCPA’s new era, there are some things that have changed.