February 8, 2023
This type of post has been published several times before (see here and here among other posts), and once again today, to highlight an important (yet often overlooked) aspect of the Foreign Corrupt Practices Act: the FCPA has always been a law much broader than its name suggests.
Sure, the FCPA contains anti-bribery provisions which concern foreign bribery. Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.
However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery. For lack of a better term, let’s call these numerous enforcement actions non-FCPA, FCPA enforcement actions.
The latest example is this recent SEC enforcement action against Gentex (a Michigan based company that provides digital vision, connected car, dimmable glass, and fire protection products).
February 7, 2023
As highlighted in this article:
“A Venezuelan Supreme Court justice and former president of that court [Maikel Jose Moreno Perez] has been indicted in Florida on charges he accepted bribes totaling around $10 million in exchange for leniency or case dismissals, spending the money on luxury homes and vacations abroad.”
According to the indictment, the bribes were intended to influence the justice to resolve cases in a manner favorable to Venezuelan contractors who owned companies that received funds from Venezuelan government-controlled entities. Certain of the bribe payments were used to purchase real estate in the U.S. and/or passed through U.S. bank accounts.
SEC Commissioner Peirce: “The SEC Once Again Has Sat Down At The Gaming Console To Play Its New Favorite Game “Corporate Manager”
February 6, 2023
Last week, the SEC announced that Activision Blizzard Inc. (a video game development and publishing company) “agreed to pay $35 million to settle charges that it failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate.”
The SEC order also found that the company “violated an SEC whistleblower protection rule.”
In summary fashion, the SEC order finds:
February 2, 2023
As highlighted here, Senator Marco Rubio recently reintroduced the Countering Corporate Corruption in China Act. First introduced in February 2022 (see here for the prior post) the “legislation seeks to modernize the Foreign Corrupt Practices Act (FCPA) by clarifying that the definition of “corrupt intent” includes actions that excuse the genocide in Xinjiang, advance the Chinese Communist Party’s (CCP) propaganda efforts, or “invest” in core CCP activities, among other actions.”
The bill was a bad idea in 2022 and remains a bad idea.
Regardless of the merits of the foreign policy objectives, the Foreign Corrupt Practices Act is not the place for country specific foreign policy.
February 1, 2023
In an annual non-event, Transparency International (TI) released its so-called Corruption Perceptions Index (CPI) (see here). The CPI “ranks 180 countries and territories by their perceived levels of public sector corruption according to experts and business people. It relies on 13 independent data sources and uses a scale of zero to 100, where zero is highly corrupt and 100 is very clean.”
The CPI’s methodology is shown at the end of this post.
According to TI, “the global average remains unchanged for over a decade at just 43 out of 100. More than two-thirds of countries score below 50, while 26 countries have fallen to their lowest scores yet. Despite concerted efforts and hard-won gains by some, 155 countries have made no significant progress against corruption or have declined since 2012.”
The CPI generates a lot of media coverage and is aggressively marketed by TI and is perhaps a popular tool for business organizations in ranking risk (and thus prioritizing compliance).
However, for the reasons highlighted in this post compliance professionals should take the CPI with a grain of salt.