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Weismmann On 2015 Slow-Down In DOJ FCPA Prosecutions: “Just Wait Three Months, It Might Be A Very Different Picture”

Andrew Weissmann’s selection of DOJ Fraud Section Chief in January 2015 was interesting to say the least.

As highlighted in this prior post [1], in recent years Weissmann has been a vocal advocate of Foreign Corrupt Practices Act reform and more broadly reforming corporate criminal liability principles. Unable to achieve, no doubt for political reasons, the actual reforms he previously championed, Weissmann is widely viewed as the architect of the DOJ’s new compliance counsel position, largely a public relations move as highlighted in this prior post [2].

Trace Blog [3] recently scored an interview with Weissmann. Relevant excerpts of the Q&A are set forth below.

“TT: Assistant Attorney General Leslie Caldwell announced in November [4] that the FCPA Unit was planning to increase its capacity by hiring 10 additional prosecutors – where will the efforts of these additional lawyers be focused?

AW: That’s correct, in addition to the 19 line attorneys currently working in the FCPA Unit, we are adding 10 more, as well as 5 supervisors. These additional resources will help us enhance the “stick” side of the carrot and stick approach we use in the Fraud Section. The focus will be on companies that do not self-disclose, and on parts of the world where there is a sense of “practical immunity” due to common misperceptions that investigations are unlikely to take place there. Also, as we don’t just rely on self-disclosures, we need additional resources to follow other various leads, such as referrals from international enforcement agencies and governments, statements made by whistleblowers, and results of paper trails.

TT: How can you explain the relative dearth of FCPA prosecutions in 2015 [5] when compared with previous years?

AW: I would say that 1 year isn’t long enough to tell the whole story. If we just wait three months, it might be a very different picture. The other part of the answer is that we are prosecuting more individuals. This focus on individuals adds a lot of complexity to our investigations and makes for a more time consuming process overall. And on top of that, we have a very high number of open investigations. The volume of matters per attorney was one reason I made the pitch for more resources.

[…]

TT: Do you have plans to update the 2012 Resource Guide [6]?

AW: Yes, we are actually looking into it right now. There have been some clarifications and new issues since the last edition that would be important to include in the updated version.”

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Weissman assertion that the DOJ is “prosecuting more individuals” is curious.

As highlighted in this post [7] and based on the DOJ’s own information, in 2015 the DOJ prosecuted fewer individuals for FCPA offenses than in 2014 and in 2014 the DOJ prosecuted fewer individuals for FCPA offenses than in 2013.

No doubt, as Weissmann stated, the “focus on individuals adds a lot of complexity to [DOJ]investigations and makes for a more time consuming process overall.” That tends to happen when the DOJ is forced to prove things to someone other than itself and the DOJ is subject to an adversary proceeding. In the 38 year history of the FCPA, only two business organizations have put the DOJ to its ultimate burden of proof in FCPA matters and in both instances the DOJ did not prevail.

To the extent the DOJ / SEC issues revised FCPA Guidance as Weissmann hinted, a good place to start might be correcting the selective information, half-truths, demonstratively false information in the 2012 Guidance. (To learn more, see the article “Grading the FCPA Guidance [8]“).

At the very least, it should be an interesting start to 2016 based on Weissmann comment about the next three months.

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