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Unbelievably Uniformed

This prior post [1] highlighted Public Citizen’s (a non-profit organization which bills itself as “serv[ing] as the people’s voice in the nation’s capital”) sophomoric commentary about Walmart’s Foreign Corrupt Practices Act scrutiny.

Now that Walmart has finally resolved its long-standing FCPA scrutiny (see here [2]here [3]here [4], here [5], and here [6] for prior post), Public Citizen is back at it and recently released this unbelievably uniformed release [7] about the Walmart enforcement action.

The statement, titled “In Trump’s America, Crime Does Pay,” by Robert Weissman (President, Public Citizen) reads in full:

Walmart agreed to pay $282 million to settle a U.S. bribery investigation regarding the corporation’s securing of permits abroad. In 2016, Public Citizen demanded [8] the federal government prosecute Walmart and its employees if the allegations proved true.

The Trump Justice Department’s message to would-be corporate criminals the world over couldn’t be clearer: Go right ahead.

Today’s slap-on-the-wrist settlement will embolden corporations to skirt the law, or simply ignore it, secure in the knowledge that if caught red-handed, the penalties will be inconsequential.

In Trump’s America, apparently, crime does pay.

The extensive, Pulitzer Prize-winning reporting by The New York Times on the Walmart bribery scandal in Mexico identified misconduct that was intentional and systemic, involving 19 stores that the Times was able to identify, reaching the highest levels of Walmex and Walmart. According to the Times’ reporting, Walmart not only failed to self-report the corruption when it was brought to light; the Times reported that senior management shut down an informal investigation into, reporting it only when faced with imminent disclosure in the national media.

We now know that there were additional problems and Foreign Corrupt Practices Act transgressions at Walmart operations in Brazil and India.

Yet Walmart is escaping any meaningful accountability, paying a grossly insufficient fine, escaping prosecution of the parent company and avoiding prosecution of any of the executives involved in the bribery scheme.

The settlement fails to satisfy minimum standards of justice (see the benchmarks we suggested in October 2016 here [9]):

  • Walmart is settling this case for $282 million, a fraction of what the government originally sought and a blip in the accounting ledger of a company with hundreds in billions of annual revenue. There is no reason to believe this amount disgorges Walmart’s ill-gotten gains from Mexico alone, and it certainly won’t deter Walmart or other wrongdoers from future bad acts.
  • The Walmart parent company is avoiding pleading guilty to wrongdoing, with the government instead accepting a thoroughly discredited non-prosecution agreement. Non-prosecution agreements effectively amount to a waiver of prosecution in exchange for a company promise not to break the law in the future – something the company was already required to do. In this case, a criminal plea may have been consequential in affecting Walmart’s ability to receive government funding. The plea deal for the Walmart subsidiary is likely to be of little import.
  • There is no indication that any person connected with the bribery scandal or the global misconduct will be criminally charged.
  • Finally, the government failed even to disclose what it found about Walmart’s misconduct.

Walmart is one the largest companies in the world. The deal today makes clear that it had a global problem of noncompliance with anti-bribery laws. Why in the world should the company get off, almost scot-free, simply because it has belatedly, purportedly put in place compliance systems that it should have implemented in the first place?

This is a shocking disgrace even by the degraded standards of the Trump administration.”

[10]

Does Public Citizen want criminal charges to be based solely on a non-lawyer journalist writing an article (an article that failed to even mention the most salient aspects of the law applicable to the alleged conduct)? To state the obvious, there is a difference between simply publishing an article and accusing a person (whether a natural person or a legal person like Walmart) with a crime.

Does Public Citizen want corporate settlement amounts to be based solely on the the size of a company and how much money it makes? Is that how this thing called criminal justice is supposed to work? I must have missed that semester of law school because the semesters I recall taught me that Lady Justice is blind and outcomes are supposed to be based on the facts and the law.

Does Public Citizen want corporate settlement amounts to be measured against uninformed commentators  who suggested that the Walmart enforcement action could be in the billions of dollars or measured against unsourced leaks that the government was perhaps seeking a larger settlement amount?

As to the conduct alleged in the actual Walmart enforcement action, does Public Citizen realize that the conduct at issue allegedly occurred 10-15 years ago and beyond any conceivable statute of limitations?

Based on the actual conduct alleged by the DOJ, just what criminal charges did Public Citizen want Walmart to plead guilty to? One would think that when calling for criminal charges against a business organization it would be incumbent on the one calling for the charges to articulate a persuasive factual and legal basis for such charges. Nothing about that in Public Citizen’s release and as highlighted here [4], the Walmart enforcement action was truly underwhelming.

Public Citizen seems to have an issue with how the Walmart FCPA inquiry was resolved. That is fair, but to suggest that how the Walmart FCPA inquiry was resolved was someone unique to the Trump administration is unbelievably uniformed.

Did Public Citizen issue a public statement when the Obama administration (and the Bush administration prior to that) used NPAs NUMEROUS times to resolve corporate FCPA enforcement actions?

Did Public Citizen issue a public statement when the Obama administration (and the Bush administration prior to that) FREQUENTLY resolved corporate FCPA inquiries through a plea agreement with a subsidiary and an NPA or DPA with the parent company?

Did Public Citizen issue a public statement when the Obama administration (and the Bush administration prior to that) resolved NUMEROUS corporate enforcement actions, yet charged no individuals in connection with the underlying conduct?

Did Public Citizen issue a public statement when the Obama administration (and the Bush administration prior to that) “failed to even disclose” what if found regarding a company resolving an FCPA enforcement action beyond what was alleged in the resolution documents?

Does Public Citizen even care about the numerous issues highlighted above or is it just interested in click-bait headlines that it knows will resonate with at least certain readers?

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