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Addressing The “Luncheon Law” Nature Of The FCPA

A lawyer once used the phrase “luncheon law”  in a conversation with me to describe the FCPA.  What did this person mean?  That the FCPA contains many vague and ambiguous terms, that there is little FCPA caselaw,  and that the enforcement agencies offer little official guidance (as noted in this prior post the DOJ has promised FCPA guidance in 2012).   The lawyer observed that in order to learn about the FCPA and FCPA enforcement one has to attend the luncheons during which the enforcement agency officials speak.

The lawyer had a point and the “luncheon law” nature of the FCPA needs to be addressed. 

If you have not heard or experienced it yourself, there is a very active FCPA “conference circuit” at which enforcement agency officials (DOJ and SEC) frequently speak.  Few of these events are free and open to public.  Rather if you want to attend, you will have to pay hundreds, if not a few thousand, dollars.  Perhaps if Assistant Attorney General Lanny Breuer is speaking at the FCPA event, you will see a transcript of the remarks, but otherwise generally you will not.

Therein lies the problem and various people have shared with me how this “luncheon law” aspect of the FCPA … well … drives them crazy and makes their jobs advising clients more difficult. In their words, the FCPA has become an area of law where “did you hear this” or “were you there” matters more than anything else.

I was reminded of the “luncheon law” aspect of the FCPA yesterday when an FCPA practitioner e-mailed me asking whether I had seen a transcript of Charles Duross’s (Chief DOJ FCPA Unit) remarks at the recent ACI FCPA Conference in Washington (see here).   I had not, but absent a transcript, the practitioner was looking for any reporting of Duross’s comments.  Thankfully, I was able to send the practitioner this write up from the FCPAmericas blog and I encourage you to read it as well.

But here is the problem.  Should one really have to pay ($2,000+ dollars, the published rate of the ACI conference, not to mention travel expenses)  to hear public servants speak about the most important law governing international business transactions?

FCPA events with government speakers happen so often that it is very difficult for the public to assess whether the enforcement agencies are speaking with one voice, whether one enforcement official is contradicting another, and whether the agencies speak with any uniform consistency against the backdrop of often inconsistent enforcement results.

What are some public policy issues raised by the “luncheon law” aspect of the FCPA?  For starters, I urge readers to consider, at a minimum, the following questions.  Should public servants be allowed to speak at private conferences and events that charge thousands of dollars to attend?  Should public servants be used as pawns by corporate conference organizers to boost attendance and thus revenue?  Should the enforcement agencies release all speeches, comments and remarks, including answers to questions posed by the audience?  Do small to medium size enterprises have the resources to attend such events?

Recently on his Open Air Blog (see here), Howard Sklar used the term “crime” (jokingly) in referring to the lack of attendance at the ABA’s 4th Annual FCPA Institute in which Duross and Charles Cain (SEC – FCPA) spoke.  Sklar said, “seriously, what a panel … it covered  self-disclosure calculus, the effect of Dodd-Frank, due diligence, and other excellent topics, we even got a couple of pieces of wisdom about declinations.”  Sklar ended his post as follows.  “I’m not going to tell you what Charles Cain identified as two important elements of a program that influences him toward declining to prosecute. Or what Chuck Duross said about it. You should have been here.”

I disagree.  One’s ability to learn a public servant’s view of the law they enforce should not depend on where one lives or one’s budget.  Yet because of the “luncheon law” nature of the FCPA this is often the case.

So long as this “luncheon law” aspect of the FCPA continues, consider doing a public service and taking detailed notes anytime an FCPA enforcement official speaks. I have in the past posted such summaries and would be happy to do so in the future.

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