An Interesting Statement
This site has long followed the criminal prosecution of four former Commonwealth Edison (“ComEd”) executives and associates based on allegations of attempting to influence and rewarding the former Speaker of the Illinois House of Representatives in order to assist with the passage of legislation favorable to the electric utility company.
Bribery of a state politician is not ordinarily the type of conduct that results in Foreign Corrupt Practices Act issues.
However, ComEd (a majority-owned indirect subsidiary of Exelon Corp) was an issuer (as was Exelon) and the FCPA has always been a law much broader than its name suggests because of the FCPA’s books and records and internal controls provisions.
A Further Reminder That The FCPA Has Always Been A Law Much Broader Than Its Name Suggests
The Foreign Corrupt Practices Act 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 and these provisions are among the most generic legal provisions one can possibly find.
Quotable
“What is an internal accounting controls violation? Anything that the SEC staff thinks—and three out of five Commissioners agree—is a righteous case and to which a public company is willing to settle.”
A good read here from Walker Newell (Woodruff Sawyer and former Senior Counsel in the SEC’s Division of Enforcement in San Francisco) titled “Uncooked Books: Avoiding SEC Accounting Scrutiny.” The article discusses recent trends in the SEC’s accounting enforcement activities.
As stated in the article:
Sarbanes-Oxley Certifications As A Basis For Books And Records Violations
As highlighted in this prior post, the DOJ recently announced criminal charges against Abraham Cigarroa Cervantes (a Mexican citizen described as a former finance director of the Latin America division of Stericycle).
The alleged conduct was in connection with the same bribery schemes at issue in Stericycle’s 2022 FCPA enforcement action as well as the related 2024 FCPA enforcement action against Mauricio Gomez Baez (a Mexican citizen who was the former Senior Vice President of Stericycle’s Latin American).
As stated in the DOJ release announcing the Cigarroa enforcement action:
Courts Upholds FCPA Convictions Of Former ComEd Executives And Associates
As discussed in this prior post, in May 2023 a federal jury in Chicago found four former Commonwealth Edison (“ComEd”) executives and associates guilty on all counts charged, including conspiring to influence and reward the former Speaker of the Illinois House of Representatives in order to assist with the passage of legislation favorable to the electric utility company, in addition to multiple bribery and record falsification charges. (See here for the DOJ release).
Bribery of a state politician is not ordinarily the type of conduct that results in Foreign Corrupt Practices Act issues.
However, ComEd (a majority-owned indirect subsidiary of Exelon Corp) was an issuer (as was Exelon) and the FCPA has always been a law much broader than its name suggests because of the FCPA’s books and records and internal controls provisions.
Indeed, the most serious (from a sentencing and fine perspective) criminal charges the four individuals were found guilty of were record falsification in violation of the FCPA.