Bloomberg BNA’s White Collar Crime Report published my recent article “Grading the DOJ’s FCPA Pilot Program.”
The article can be downloaded here for free.
Do go read the article.
Grading The DOJ’s FCPA Pilot Program
FCPA Flash – A Conversation With Billy Jacobson
The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from the written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Billy Jacobson. Jacobson has experience with the FCPA from a number of vantage points few can claim. He has been an Assistant Chief for FCPA enforcement in the DOJ fraud section. He has been a Senior Vice President, Co-General Counsel and Chief Compliance Officer for Weatherford International Ltd., a large oil and natural gas services company that does business around the world. Currently, he is a lawyer in private practice at Orrick and was previously a lawyer in private practice at other firms.
In the episode, Jacobson discusses the DOJ’s FCPA “pilot program” announced in April 2016, his policy suggestions for more effective FCPA enforcement, an FCPA compliance defense and what the FCPA might look like if it was passed today (instead of 1977), and whether a business organization should put the DOJ to its burden of proof.
Six Reasons Why The Corporate Community Should Take The DOJ’s “Pilot Program” With A Grain Of Salt
Numerous prior posts have highlighted various aspects of the DOJ’s Foreign Corrupt Practices Act “pilot program” announced earlier this month.
To be clear, this post does not advocate or even imply that the corporate community should ignore the pilot program. After all, the DOJ has extreme leverage over business organizations subject to FCPA scrutiny and it is always wise to at least be cognizant of what an adversary possessing a big and sharp stick is saying.
Nevertheless, absent limited circumstances not often present in instances of FCPA scrutiny, how to respond to internal breaches of FCPA compliance policies is a business decision entrusted to those charged with managing the business organization. In exercising this business judgment, the corporate community should take the pilot program with a grain of salt for at least six reasons.
Weissmann Should Have Listened To His Former Self
A supreme irony regarding last week’s announcement by the DOJ of a “new” Foreign Corrupt Practices Act “pilot program” is that the substantive document highlighting the “pilot program” bears the signature of Andrew Weissmann (Chief of the DOJ’s Fraud Section).
As highlighted in this prior post, Weissmann assumed this position in January 2015 after being a vocal critic of various aspects of the DOJ’s FCPA enforcement program as well as corporate criminal liability principles generally.
As stated in the FCPA “pilot program” that bears his signature, the goal of the program is the following:
“The principal goal of this program is to promote greater accountability for individuals and companies that engage in corporate crime by motivating companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs. If successful, the pilot program will serve to further deter individuals and companies from engaging in FCPA violations in the first place, encourage companies to implement strong anti-corruption compliance programs to prevent and detect FCPA violations, and, consistent with the memorandum of the [Yates Memo] increase the Fraud Section’s ability to prosecute individual wrongdoers whose conduct might otherwise have gone undiscovered or been impossible to prove.”
Prior to last week’s announcement of the “pilot program,” the DOJ last Fall also announced the new position of “compliance counsel,” a development that Weissmann is widely viewed as motivating. Regarding the compliance counsel position, in this recent interview, Weissmann stated that a motivation in creating the DOJ’s new compliance counsel position was to “empower a robust compliance function within organizations. We can play a big role in fostering that development.”
Asked what he “hope[d] to accomplish in general and specifically to assist the compliance professional,” Weissmann responded: “I hope that, in seeing how seriously the Department of Justice takes compliance, we will strengthen the voice of the compliance professionals and help them get a stronger seat at the table as a key stakeholder in how businesses are run.”
Whether its the stated goal of the “pilot program” to “encourage companies to implement strong anti-corruption compliance programs to prevent and detect FCPA violations” or to best “empower a robust compliance function within organizations” and best “strenghten the voice of the compliance professional [to] help them get a strong seat at the table,” Weissmann should have listened to his former self because his former self seemed to recognize that the DOJ’s recent announcements are not the best answer to accomplish its stated goals.
What Others Are Saying About The DOJ’s “New” FCPA “Pilot Program”
One thing that is not in dispute about FCPA Inc. is that it is an active group of writers.
Since release of the DOJ’s “new” Foreign Corrupt Practices Act “pilot program on April 5th (see here, here, here, here and here for prior FCPA Professor posts), there have been a flurry of law firm client alerts, etc. on the topic.
Many of the alerts have been purely factual and of course, just like most other FCPA developments, there are those who are calling the development a big deal or something similar perhaps in a subtle attempt to market FCPA compliance services.
However, certain of the alerts move beyond the pure facts of the “pilot program” and take a position on the value and likely success of the “pilot program.” Those alerts are excerpted below.
As highlighted below, the general thrust of practitioner comments is a “thumbs down” for the DOJ’s latest effort to encourage voluntary disclosure with some of the most pointed criticisms coming from former high-ranking DOJ FCPA officials.
