- FCPA Professor - http://fcpaprofessor.com -

The FCPA Mulligan Rule?

The FCPA Opinion Procedure regulations (here [1]) state that issuers and domestic concerns subject to the FCPA may “obtain an opinion of the Attorney General as to whether certain specified, prospective — not hypothetical — conduct conforms with the Department’s present enforcement policy regarding the antibribery provisions of the Foreign Corrupt Practices Act.”

Since 1980, the DOJ has issued 55 FCPA opinion procedure releases (see here [2] and here [3]).

In nearly every instance the DOJ expresses an opinion that it does not intend to take any enforcement action as to the disclosed facts or conduct? If my figures are correct, in 54 of the 55 opinion procedure releases (98%) the DOJ expressed such an opinion. [The only exception would appear to be 98-01 (here [4])].

Perhaps you already knew this, but recently I learned something that may help explain this 98% no enforcement statistic.

What did I learn?

That often times, when the requestor senses that it will not receive a favorable DOJ opinion, it simply withdraws the request. I confirmed that this practice does indeed occur with a former high-ranking DOJ FCPA official and others.

Call it the FCPA mulligan rule.

Sec. 80.15 of the opinion procedure regulations specifically states that “a request submitted under the foregoing procedure may be withdrawn prior to the time the Attorney General issues an opinion to such request.”

But here is the issue as I see it.

How does the requestor get the sense that it will receive an unfavorable DOJ opinion so that it can withdraw the request before the opinion procedure is publicly released?

After all, Sec. 80.09 of the regulations, titled “no oral opinion,” states: “no oral clearance, release or other statement purporting to limit the enforcement discretion of the Department of Justice may be given.”

This would seen to eliminate DOJ oral communications to the requestor as to DOJ’s initial observations which may then motivate the requestor to withdraw the request.

Sec. 80.8 of the regulations requires that the Attorney General “respond to the request by issuing an opinion …”. So if the initial DOJ observation which then motivates the requestor to withdraw the request is communicated in writing, should the writing be made public in the same fashion as the opinions that are actually released? Would this not add to the mix of information available as to the FCPA?

As long as I am in question mode, let me throw out this question (see here [5] for the prior post) – should DOJ’s declination decisions be made public?

At a recent public event, I asked Charles Duross (DOJ FCPA chief) this question and he said (see here [6]) that it was a “difficult issue.” In a recent video (here [7] – start at the 6 minute mark), William Stuckwisch (DOJ) wondered aloud whether DOJ declination decisions should be made public. Last, but not least, in this [8] recent Q&A with Sue Reisinger of Corporate Counsel Billy Jacobson (a former high-ranking DOJ FCPA official) stated: “The Justice Department could publicize cases anonymously that it has not brought because of the company’s actions.”