Regarding DOJ “Declination” Decisions ….
This recent Bloomberg article is titled “Outing Companies That Avoid Charges a Dilemma for US Prosecutors” and it begins as follows:
“The Justice Department is wrestling over how to provide greater transparency into when it ends investigations of companies without pressing charges, former officials said. Such coveted resolutions, known as declinations, are usually concealed from the public, as details of their existence are sought by the defense bar and other businesses considering whether to self-report white-collar crime. But DOJ is also motivated to show its work, knowing it will give companies more certainty that turning themselves in won’t backfire. Internal DOJ deliberations and discussions with outside counsel over ways to make the process less opaque have a major obstacle to overcome, according to six lawyers who’ve been involved in the talks that date to at least 2016. All parties benefit from more declination visibility except the recipient companies that are outed.”
The same general topic has been discussed for years on these pages.
Friday Roundup
Where is the outrage now, Odebrecht related, and for the people. It’s all here in the Friday roundup.
Where Is The Outrage Now?
In 2016 the Obama Justice Department invented another way to resolve an FCPA enforcement action – the so-called “declination” – a form of resolution that sometimes requires disgorgement. In 2016, the DOJ used this way of resolving an FCPA enforcement five times. (See here).
In 2017 the Trump Justice Department used this way of resolving an FCPA enforcement and – all of a sudden – some commentators were outraged. This commentator stated: “bring a matter to the department’s attention, fall all over yourself to help prosecutors understand the case, and show them you cleaned up your act—and presto, you avoid the DPA or monitor …”. The commentator added: “President Trump himself doesn’t seem much interested in enforcing the [FCPA]” (another odd statement because President’s don’t enforce the law.
DOJ Quietly Releases “Declination With Disgorgement” Letter Involving JLT
This March 15th post discussed a future $29 million “declination with disgorgement” enforcement action disclosed by Marsh & McLennan Companies, Inc. in connection with its 2019 acquisition of Jardine Lloyd Thompson Group plc (JLT).
On March 22nd, the DOJ quietly updated its FCPA Corporate Enforcement Policy declinations page by posting the March 18th “declination with disgorgement” letter.
The last time the DOJ self-identified an FCPA enforcement action as a “declination” was approximately 1.5 years ago (in August 2020).
Measured By This Goal, DOJ Policy Has Failed
Imagine a government enforcement agency unveiling an enforcement policy that had X as a stated goal and then nearly six years later, X occurred only 7% of the time.
The answer would seem clear: the goal of the enforcement policy failed.
As highlighted below, in releasing the 2016 FCPA Pilot Program and thereafter in 2017 in releasing the FCPA Corporate Enforcement Policy (CEP), the DOJ stated that a “main goal” was to encourage voluntary disclosures to permit prosecution of individuals. Yet, nearly six years later there have been FCPA prosecutions of individuals in only 7% of cases the DOJ has self-identified as being resolved pursuant to / or consistent with the Pilot Program or the CEP.
DOJ Seeks Court Order To Release Previously Withheld Privileged Documents In Connection With Alleged Adoption Agency Bribery Scheme
As highlighted in prior posts here and here, in 2019 and 2020 (in a rather unusual Foreign Corrupt Practices Act enforcement action) the DOJ criminally charged various individuals associated with Ohio-based European Adoption Consultants Inc. (EAC) with FCPA and related criminal charges in connection with a Ugandan bribery scheme and other conduct.
One defendant, Robin Longoria, pleaded guilty to one count of conspiring to violate the FCPA’s anti-bribery provisions and to commit wire fraud and visa fraud “for her role in a scheme to corruptly facilitate adoptions of Ugandan children through bribing Ugandan officials and defrauding U.S. adoptive parents and the U.S. Department of State.” The subsequently charged defendants, Margaret Cole, Debra Parris and Dorah Mirembe, appear to be mounting a defense.
Recently, the DOJ filed a motion seeking a court order allowing its privilege “filter team” (which currently possesses thousands of documents related to EAC and its former attorneys that were obtained during the investigation) to disclose the documents to the prosecution team because EAC’s assertion of privilege no longer applies because EAC is “defunct and thus no longer has the ability to assert privilege over those materials.”