Bonny Island Bribery Archives

Friday Roundup

By Mike Koehler on February 13, 2015 in Arbitration Issues, Bonny Island Bribery, Facilitating Payments, Jeffrey Tesler, Teva Pharmaceuticals

Scrutiny alert and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alert

In August 2012, the Israel-based Teva Pharmaceuticals first disclosed its FCPA scrutiny and in its most recent annual report the company disclosed as follows.

“For several years, we have been conducting a voluntary worldwide investigation into business practices that may have implications under the FCPA. We have engaged outside counsel to assist in the investigation, which was prompted by the receipt, beginning in 2012, of subpoenas and informal document requests from the SEC and the Department of Justice (“DOJ”) to produce documents with respect to compliance with the FCPA in certain countries. We have provided, and will continue to provide, documents and other information to the SEC and the DOJ, and are cooperating with these agencies in their investigations of these matters. In the course of our investigation, which is continuing, we have identified certain business practices and transactions in Russia, certain Eastern European countries, certain Latin American countries and other countries in which we conduct business, which likely constitute violations of the FCPA and/or local law. In connection with our investigation, we have also become aware that affiliates in certain countries under investigation provided to local authorities inaccurate or altered information relating to marketing or promotional practices. We have brought and continue to bring these issues to the attention of the SEC and the DOJ. Our internal investigation is not complete and additional issues or facts could become known to management as the investigation continues, which may expand the scope or severity of the potential violations and/or extend to additional jurisdictions. Our investigation is expected to continue through the end of 2015, and may continue beyond that date.”

Reading Stack

From Shearman & Sterling attorneys in the New York Law Journal “A Bribe Is a Bribe: FCPA’s Influence on International Arbitration.”

“Although bribery investigations conducted under the auspices of the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) may appear, at first glance, detached from the world of international arbitration, BSG Resources v. Guinea highlights an issue that practitioners should understand when advising their clients on the potential repercussions of FCPA liability. While practitioners are generally aware of the litigation risks associated with FCPA investigations in the U.S. courts, they would also be well advised in considering the implications that FCPA liability may have on their clients’ recourse to foreign investment protections and bilateral investment treaties, and related international arbitration.”

For additional information on this topic, see this prior guest post.

*****

The attorneys who represented Mark Jackson in SEC. v. Jackson (the SEC’s failed case against Noble executives in connection with Nigerian permits – see here, here, and here for prior posts) ask whether the SEC has written the facilitating payments exception out of the FCPA? The article states:

“Last summer, a lawsuit brought by the Securities and Exchange Commission (SEC) alleging Foreign Corrupt Practices Act (FCPA) violations against two individuals related to Noble Corporation, a global oil and gas drilling services company, nearly went to trial in federal court in Texas. SEC v. Jackson and Ruehlen, No. 12-cv-563 (S.D. Tex.). […] As one of the only civil FCPA cases to proceed to that stage of litigation, the case provided unique insights into the SEC’s interpretation of key provisions of the FCPA. The case ultimately settled on very favorable terms for the individuals, but the SEC’s position on the facilitating payments exception to the FCPA was a notable departure from its own stated guidance and may herald a renewed attempt by the SEC to further narrow the exception to the point of irrelevance.”

[…]

“Due to the settlement [in the case], the court never had the opportunity to rule on the fate of the FCPA’s facilitating-payments exception under the SEC’s newfound interpretation. But the SEC’s position on this issue signals a shift in policy toward the practical elimination of the exception. If the SEC continues down the road established in this case, it will be interesting to examine whether courts accept the SEC’s position eliminating the exception. However, since most FCPA cases are not litigated, the SEC may seek to push its novel interpretation into law, without approval by the courts, by including it in settlement agreements going forward. Counsel should be aware of this effort and, where possible and appropriate, resist the SEC’s efforts to rewrite the law.”

My own two cents on the issue is consistent with other observations, and that is yes, the enforcement agencies have largely read facilitating payments out of the FCPA, along with the corrupt intent element in many cases.

*****

Much has been written about the recently leaked records from HSBC, including this piece regarding Jeffrey Tesler’s role in the Bonny Island, Nigeria bribery cases (4 out of 10 cases in the top ten in terms of FCPA settlements). According to the article:

“Leaked records from HSBC, a huge global bank based in London, reveal new details about the bank’s role as a conduit for the bribes — and new details about how Tesler operated. The files, obtained by the French newspaper Le Monde and the International Consortium of Investigative Journalists, show ties between Tesler and high-ranking Nigerians not previously named publicly in connection with the scandal, raising the possibility of renewed questions about Nigeria’s handling of the affair.”

[…]

The files obtained by Le Monde and ICIJ show that nine people, including members of the Tesler family and Nigerian nationals, held a variety of roles with accounts at HSBC Private Bank (Suisse) between 1990 and 2003 — months before the completion of the gas plant. Nine of the 12 accounts instructed HSBC to keep all correspondence under lock and key in a bank safe.

Despite Tesler being under investigation since 2003, HSBC continued to offer advice, services and cash withdrawals to Tesler and his family, whose accounts with the bank totaled tens of millions of dollars at one point in 2006/2007. HSBC advised the family even though its individual files for Tesler and those close to him include references to “criminal cases” and “the Tesler affair.”

*****

A good weekend to all.

Friday Roundup

By Mike Koehler on April 4, 2014 in African Development Bank, Bonny Island Bribery, Cisco, Citigroup, Declination Decisions, Enforcement Agency Policy, Enforcement Agency Speeches, Internal Investigation Issues, JGC of Japan, Kellogg Brown and Root, Opinion Procedure Release, SBM Offshore, Societe Generale, Sweett Group, Technip, Voluntary Disclosure

Contorted, interesting, deserving?, scrutiny alerts and updates, and for the reading stack. It’s all here in the Friday Roundup.

Contorted

One of the most contorted words in the FCPA vocabulary is “declination” (see here among other posts).

This K&L Gates report contains a useful summary of DOJ and SEC comments at a recent conference. It states:

“Mr. Knox [DOJ Criminal Division Fraud Section Chief] stated that companies continue to request specific information regarding the Department’s declinations, but that it is the Department’s long-standing practice not to publish details of declinations without a company’s permission, which is rarely given. According to Mr. Knox, however, over the last two years, the Department has declined to prosecute dozens of cases. Notably, Mr. Knox stated that, aside from finding no evidence of criminal conduct, the Department may issue a declination when a case involves an isolated incident, the company had a strong compliance program, and the problem was remediated.”

Newsflash.

If the DOJ does not find evidence of criminal conduct and therefore does not bring a case, this is not a “declination,” it is what the law commands.

On the topic of voluntary disclosure, the K&L Gates report states:

“Mr. Cain [SEC FCPA Unit Deputy Chief] started by stating “there is no perfect compliance program;” therefore, companies will always have some “background issues” which need to be addressed, especially as business and risk profiles change. Mr. Cain does not expect companies to disclose these “normative” problems; however, companies should disclose “significant problems.” These “significant problems” are the types of issues which may end up being enforcement actions if the SEC learns of them through means other than self-disclosure.”

“Mr. Knox took the position that it would be “very reckless and foolish” for him “to try and draw a line between matters which should be self-disclosed and matters which shouldn’t.” In making the decision of whether to self-disclose, he advised companies and counsel to apply “common sense” and ask whether this is “something that [the Department] would be interested in hearing about?” According to Mr. Knox, if the answer to that question is “yes,” then the Department would “probably want [a company] to self-disclose it.” Nonetheless, there are instances which are not worthy of self-disclosure because the conduct is “minor” and “isolated” or the allegation of wrongdoing is “much too vague.” Mr. Knox advised companies to “be thoughtful” when making disclosure decisions and carefully document any decision not to disclose.”

If the above leaves you scratching your head, join the club.

Interesting

My article “Why You Should Be Alarmed by the ADM FCPA Enforcement Action” highlights how ADM and its shareholders were victims of a corrupt Ukrainian government in that the government refused to give ADM something even the DOJ and SEC acknowledged ADM was owed – VAT refunds. Among other things, the article discusses how VAT refund refusals were well-known and frequently criticized prior to the ADM enforcement action in late 2013.

Fast forward to the present day and VAT refund refusals remain a problem in Ukraine. Recently the International Monetary Fund issued this release concerning a potential aid package for Ukraine. Among the conditions is that Ukraine adopt “reforms to strengthen governance, enhance transparency, and improve the business climate” such as taking “measures to facilitate VAT refunds to businesses.”

Deserving?

Earlier this week, the African Development Bank Group (AfDB) released this statement

“Kellogg Brown & Root LLC, Technip S.A. and JGC Corp. agree to pay the equivalent of US $17 million in financial penalties as part of Negotiated Resolution Agreements with the African Development Bank following admission of corrupt practices by affiliated companies in relation to the award of services contracts for liquefied natural gas production plants on Bonny Island, Nigeria, from 1995 until 2004.”

The Director of the AfDB’s Integrity and Anti-Corruption Department stated:

“This settlement demonstrates a strong commitment from the African Development Bank to ensure that development funds are used for their intended purpose. At the same time, it is a clear signal to multinational companies that corrupt practices in Bank-financed projects will be aggressively investigated and severely sanctioned. These ground-breaking Negotiated Resolution Agreements substantially advance the Bank’s anti-corruption and governance agenda, a strategic priority of our institution.”

Pardon me for interrupting this feel good moment (i.e. a corporation paying money to a development bank), but why is AfDB deserving of any money from the companies? As noted here, AfDB’s role in the Bonny Island project was relatively minor as numerous banks provided financing in connection with the project. Moreover, as noted here, the AfDB “invested in the oil and gas sector through a USD 100 million loan to NLNG [Nigeria LNG Limited] to finance the expansion of a gas liquefaction plant located on Bonny Island.”

As alleged in the U.S. Bonny Island FCPA enforcement actions, the above-mentioned companies allegedly made corrupt payments to, among others, NLNG officials. And for this, the specific companies paid $579 million (KBR, et al), $338 million Technip, and $219 million (JGC).

Why is the bank that loaned money to NLNG deserving of anything? Is there any evidence to suggest that the $100 million given to NLNG was not used for its “intended purpose” of building the Bonny Island project?

Scrutiny Alerts and Updates

SBM Offshore, Sweett Group, Citigroup, Cisco, and Societe Generale.

SBM Offshore

The Netherlands-based company (with ADRs traded in the U.S. that provides floating production solutions to the offshore energy industry) has been under FCPA scrutiny for approximately two years. It recently issued this statement which states, in summary, as follows.

“SBM Offshore presents the findings of its internal investigation, which it started in the first quarter of 2012, as the investigators have completed their investigative activities. The investigation, which was carried out by independent external counsel and forensic accountants, focused on the use of agents over the period 2007 through 2011. In summary, the main findings are:

The Company paid approximately US$200 million in commissions to agents during that period of which the majority relate to three countries: US$18.8 million to Equatorial Guinea, US$22.7 million to Angola and US$139.1 million to Brazil;

In respect of Angola and Equatorial Guinea there is some evidence that payments may have been made directly or indirectly to government officials;

In respect of Brazil there were certain red flags but the investigation did not find any credible evidence that the Company or the Company’s agent made improper payments to government officials (including state company employees). Rather, the agent provided substantial and legitimate services in a market which is by far the largest for the Company;

The Company voluntarily reported its internal investigation to the Dutch Openbaar Ministerie and the US Department of Justice in April 2012. It is presently discussing the disclosure of its definitive findings with the Openbaar Ministerie, whilst simultaneously continuing its engagement with the US Department of Justice. New information could surface in the context of the review by these authorities or otherwise which has not come up in the internal investigation to date;

At this time, the Company is still not in a position to estimate the ultimate consequences, financial or otherwise, if any, of that review;

Since its appointment in the course of 2012 the Company’s new Management Board has taken extensive remedial measures in respect of people, procedures, compliance programs and organization in order to prevent any potential violations of applicable anti-corruption laws and regulations. Both it and the Company’s Supervisory Board remain committed to the Company conducting its business activities in an honest, ethical, respectful and professional manner.”

The SBM Offshore release contains a detailed description of the scope and methodology of its review, as well as remedial measures the company has undertaken. For this reason, the full release is an instructive read.

Sweett Group

As noted in this prior post, in June 2013 Sweett Group Ltd. (a U.K. based construction company) was the subject of a Wall Street Journal article titled “Inside U.S. Firm’s Bribery Probe.” The focus of the article concerned the construction of a hospital in Morocco and allegations that the company would get the contract if money was paid to “an official inside the United Arab Emirates President’s personal foundation, which was funding the project.”

Earlier this week, the company issued this release which stated:

“[T]here have been further discussions with the Serious Fraud Office (SFO) in the UK and initial discussions with the Department of Justice (DOJ) in the USA. The Group is cooperating with both bodies and no proceedings have so far been issued by either of them. The Group has commissioned a further independent investigation which is being undertaken on its behalf by Mayer Brown LLP. Whilst this investigation is at an early stage and is ongoing, to date still no conclusive evidence to support the original allegation has been found. However, evidence has come to light that suggests that material instances of deception may have been perpetrated by a former employee or employees of the Group during the period 2009 – 2011. These findings are being investigated further.”

Citigroup

When first discussing Citigroup’s “FCPA scrutiny” I noted the importance of understanding that the FCPA contains generic books and records and internal controls provisions that can be implicated in the absence of any FCPA anti-bribery issues. (See here for a prior post on this subject). As highlighted in this recent New York Times Dealbook article, this appears to be what Citigroup’s scrutiny involves. According to the article:

“Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter … The investigation, overseen by the FBI and prosecutors from the United States attorney’s office in Manhattan, is focusing in part on whether holes in the bank’s internal controls contributed to the fraud in Mexico. The question for investigators is whether Citigroup — as other banks have been accused of doing in the context of money laundering — ignored warning signs.”

Cisco

BuzzFeed goes in-depth as to Cisco’s alleged conduct in Russia that has resulted in FCPA scrutiny for the company. The article states, in pertinent part:

“[T]he iconic American firm is facing a federal investigation for possible bribery violations on a massive scale in Russia. At the heart of the probe by the Department of Justice and the Securities and Exchange Commission, sources tell BuzzFeed, are allegations that for years Cisco, after selling billions of dollars worth of routers, communications equipment, and networks to Russian companies and government entities, routed what may have amounted to tens of millions of dollars to offshore havens including Cyprus, Tortola, and Bermuda.”

“Two former Cisco insiders have described to BuzzFeed what they say was an elaborate kickback scheme that used intermediary companies and went on until 2011. And, they said, Cisco employees deliberately looked the other way.”

“No one is suggesting that Cisco bribed Russia’s top leaders. Instead, the investigation is centered on day-to-day kickbacks to officials who ran or helped run major state agencies or companies. Such kickbacks, according to the allegations, enabled the firm to dominate Russia’s market for IT infrastructure.”

“Last year, according to sources close to the investigation, a whistleblower came forward to the SEC, sketching out a vast otkat [kickback] scheme and providing documents as evidence.”

“The two former Cisco executives laid out for BuzzFeed how the alleged scheme worked: In Cisco’s Russia operations, funds for kickbacks were built into the large discounts Cisco gave certain middleman distributors that were well-connected in Russia. The size of the discounts are head-turning, usually 35% to 40%, but sometimes as high as 68% percent off the list price. And there was a catch: Instead of discounting equipment in the normal way, by lowering the price, parts of the discounts were often structured as rebates: Cisco sent money back to the middlemen after a sale. Some intermediaries were so close to the Russian companies and government agencies — Cisco’s end customers — that these intermediaries functioned as their agents. These middleman companies would direct the rebate money to be sent to bank accounts in offshore havens such as Cyprus, the British Virgin Islands, or Bermuda.”

According to the article, WilmerHale is conducting the internal investigation.

Societe Generale

Like other financial services company, Societe Generale has come under FCPA scrutiny for business dealings in Libya. (See here for the prior post). As noted in this recent article in the Wall Street Journal, in a U.K. lawsuit the Libyan Investment Authority has alleged that the company “paid a middleman $58 million in alleged bribes to secure almost $2 billion in business … during the final years of dictator Moammar Gadhafi’s rule.”

Reading Stack

The most recent issue of the always informative FCPA Update from Debevoise & Plimpton contains a useful analysis of the DOJ’s recent opinion procedure release (see here for the prior post). Among other things, the Update states:

“[W]hy did it take eight months for the DOJ to issue an Opinion which could have simply cited [a prior Opinion Release]? The delay does not appear to be related to the DOJ’s heavy workload or bureaucratic inertia, as “significant backup documentation” was provided and “several follow up discussions” took place during the eight months.”

*****

A good weekend to all. On Wisconsin!

Keeping FCPA Enforcement Statistics In Perspective

By Mike Koehler on January 23, 2013 in Bonny Island Bribery, CustomsGate, FCPA Statistics, Iraq Oil For Food

The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2012, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year. (The below data was assembled using the “core” approach – see this prior post for an explanation).

Corporate FCPA Enforcement Actions (2007-2012)

Year	Enforcement Actions	Settlement Amounts	Of Note
2007	15	$149 million	Six enforcement actions involved Iraq Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount.
2008	10	$885 million	The $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount.
2009	11	$645 million	The $579 million KBR / Halliburton Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount.
2010	21	$1.4 billion	Six enforcement actions, all resolved on the same day, centered on various oil and gas companies use Panalpina in Nigeria. Panalpina also resolved an enforcement action on the same day.Two enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island conduct. In other words, there were 14 unique corporate enforcement actions in 2010. Of further note, the two Bonny Island enforcement actions, Technip($338 million) and Eni/Snamprogetti ($365 million) comprised approximately 50% of the $1.4 billion amount.
2011	16	$503 million	The $219 million JGC Corp. Bonny Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount
2012	12	$260 million	None that significantly skewed the statistics.
	TOTAL: 85	TOTAL: $3.9 billion

As demonstrated by the above chart, 2010 was the apex of FCPA enforcement, both in terms of the number of enforcement actions and settlement amounts. FCPA enforcement in 2012 was less than in 2011, and FCPA enforcement in 2011 was less than in 2010.

Industry participants have offered various reasons for the decrease in FCPA enforcement in 2012 – all speculative and not empirically based.

What is not speculative and what is empirically based is an analysis of how just a few unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011 and how these events place 2012 FCPA enforcement data in a proper context.

The events, as suggested by the above chart, are the following: (i) publication in 2005 of the so-called Volcker Report on the United Nations Iraq Oil for Food Program which served as a ready-made list of enforcement actions; (ii) in 2003 Georges Krammer, a former top official at Technip, shared information with French investigators concerning a $6 billion dollar project at Bonny Island, Nigeria; and (iii) several oil and gas companies utilized the services of Panalpina.

As indicated in the below charts, these unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011.

Corporate FCPA Enforcement Actions Based on Iraq Oil For Food Conduct (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

Settlement Amounts

Total Settlement Amount Percentage

19%

$267 million

Corporate Bonny Island, Nigeria FCPA Enforcement Actions (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

Settlement Amounts

Total Settlement Amount Percentage

$1.5 billion

41%

Corporate Panalpina Related FCPA Enforcement Actions (2007-2011)

Enforcement Actions

Total Enforcement Action Percentage

Settlement Amounts

Total Settlement Amount Percentage

11%

$262 million

As demonstrated by the above charts, the combined effect of just three unique historical events – Iraq Oil for Food, Bonny Island conduct, and use of Panalpina – had a significant impact on FCPA enforcement data between 2007 and 2011. These events served as the foundation for 35% of all corporate enforcement actions between 2007-2011 and resulted in 55% of the settlement amounts in corporate enforcement actions between 2007-2011.

Adding just the 2008 Siemens enforcement action to the settlement amount calculation, results in just four unique historical events accounting for 77% of settlement amounts in corporate enforcement actions between 2007-2011.

While the January 2012 FCPA enforcement action against Marubeni did involve Bonny Island conduct, the unique events identified above have run their course. Recognizing these events and how they impacted FCPA enforcement data is important to understanding why FCPA enforcement has declined in recent years.

Even though FCPA enforcement has declined in recent years, unique events giving rise to FCPA enforcement actions have remained relatively constant between 2007 and 2012. In 2007, corporate FCPA enforcement actions were the result of 15 unique events. In 2008, corporate FCPA enforcement actions were the result of 10 unique events. In 2009, corporate FCPA enforcement actions were the result of 11 unique events. In 2010, corporate FCPA enforcement actions were the result of 14 unique events. In 2011, corporate FCPA enforcement actions were the result of 16 unique events. In 2012, corporate FCPA enforcement actions were the result of 12 unique events.

Inside FCPA Enforcement Statistics

By Mike Koehler on July 18, 2012 in Bonny Island Bribery, CustomsGate, FCPA Statistics, Iraq Oil For Food

FCPA Inc., it often seems, is obsessed with enforcement statistics. Increasing FCPA enforcement, and the ability to demonstrate it through numbers and graphs, is an effective marketing device for many in the industry. But what happens when enforcement actually decreases? How do you market decreasing FCPA enforcement? As Michael Volkov recently stated (here) on his Corruption, Crime and Compliance site “law firms are wringing their hands wondering how they can ‘scare’ businesses with the latest FCPA enforcement action.” It seems the answer is to speculate as to possible reasons for the decrease and remind your marketing targets of the many cases in the “pipeline.”

The decrease in FCPA enforcement has been a hot topic of late, for instance see here from the FCPA Blog.

Let me share a not-so-secret, secret and that is this. FCPA enforcement 2007-2011 was, to a great extent, the function of just three unique events: (1) publication in 2005 of the so-called Volcker Report on the United Nations Iraq Oil for Food Program which served as a ready-made list of enforcement actions; (2) in 2003 Georges Krammer, a former top official at Technip, shared information with French investigators concerning a $6 billion dollar project at Bonny Island, Nigeria; and (3) several oil and gas companies utilized the services of Panalpina.

These three unique events have resulted in approximately 35% of the core corporate FCPA enforcement actions between 2007-2011.

There have been 14 core corporate enforcement actions focused on Iraq Oil for Food conduct (Chevron, Azko Nobel, El Paso, Novo Nordisk, AGCO, ABB, Innospec, Ingersall-Rand, Textron, York, AB Volvo, Flowserve, General Electric and Fiat). Siemens and Daimler also included Iraq Oil for Food conduct, but such conduct was a minor focus of the overall allegations and thus not included in the above figure. In short, the Iraqi Oil for Food enforcement actions have largely run their course (one of the few remaining inquiries would seem to be Weatherford International where the conduct under investigation includes Iraq Oil for Food conduct). [Note: most of the Iraq Oil for Food enforcement actions involved “only” FCPA books and records and internal control charges given that the kickback payments were to the Iraqi government, not a particular foreign official. Nevertheless such actions are usually included in FCPA enforcement statistics].

There have been 7 core corporate enforcement actions concerning oil and gas companies utilizing the services of Panalpina in Nigeria (Panalpina, Noble, Pride, Shell, Tidewater, Transocean, and Global SantaFe). These actions, all announced in November 2010, largely account for the spike in 2010 corporate FCPA enforcement.

There have been 4 core corporate enforcement actions concerning the so-called TSKJ joint venture in relation to Bonny Island, Nigeria conduct (KBR / Halliburton, Technip, ENI/Snamprogetti, and JGC Corp.) [Throw in the 2012 enforcement action against Marunbeni and the number is 5]. These enforcement actions of course have not been mere garden-variety types; rather Bonny Island enforcement actions have resulted in 4 of the top 6 FCPA enforcement actions of all time.

Add these numbers together and you find that 25 of the 73 core corporate enforcement actions between 2007-2011 were the direct result of just three unique events.

Viewing FCPA enforcement statistics in the abstract is not a very useful exercise. Rather, the more thoughtful way to view such statistics is to understand the root causes leading to the enforcement actions in the first place. When viewed in this way, the not-so-secret, secret is that approximately 35% of FCPA enforcement actions between 2007-2011 were the direct result of just three unique events. These events have largely run their course and I submit this is the biggest reason why enforcement actions in 2012 are not on pace with the past few years.

[Note – as discussed in previous posts, unlike some others, I keep my corporate FCPA statistics using the “core” approach. Thus, for instance, the Siemens enforcement action was 1 ”core” enforcement action even if the DOJ entered into separate agreements with Siemens AG, Siemens Argentina, Siemens Bangladesh, and Siemens Venezuela and even if the SEC separately brought an enforcement action against Siemens AG. I submit that counting Siemens as 5 corporate enforcement actions, as many do, results in misleading FCPA enforcement statistics. Further distorting FCPA enforcement statistics is separately counting related individual enforcement actions. For instance, if one took such an approach in connection with Siemens the end result would be 20 enforcement actions – even though all enforcement actions were based on the same core set of conduct].

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