DOJ’s Centralized FCPA Enforcement Policy
Yesterday’s post highlighted a 1979 speech by the DOJ’s Assistant Attorney General outlining the DOJ’s FCPA enforcement priorities. (See here). In the speech, the Assistant Attorney General talked about DOJ’s centralized FCPA enforcement policy and stated as follows.
“To maintain consistency in enforcement policy and to keep close liaison with the Department of State, SEC, and foreign law enforcement agencies, we have concluded that enforcement responsibility under the Act should be substantially centralized. Unlike other law enforcement areas where primary responsibility for prosecution rests with 94 different U.S. Attorneys around the country, most prosecutions under the Foreign Corrupt Practices Act for payment activities will be supervised by the Multinational Fraud Branch in the Criminal Division in Washington.”
The speech also referenced improper payments leading to the downfall of foreign governments and the foreign policy implications of such payments. Indeed, as told in my article “The Story of the Foreign Corrupt Practices Act,” what primarily motivated Congress to enact the Foreign Corrupt Practices Act was payments to foreign government officials such as the Prime Minister of Japan, the President of Korea, the President of Gabon, and Italian political parties. Congress really didn’t care (at least enough to legislate) about the many other questionable payments it learned of during its multi-year investigation and deliberation of the foreign corporate payments problem in the mid-1970’s. We know this because Congress excluded from the original definition of “foreign official” government employees whose duties were ministerial or clerical.
In 1982, Richard Shine (Chief of the DOJ’s Multinational Fraud Branch, the name then given to the DOJ’s FCPA Unit) likewise spoke of the DOJ’s centralized enforcement policy and stated as follows (see here for the prior post).
“Because of the obvious sensitivity both from a national security point of view and a foreign policy point of view, the Department has administered the enforcement of this statute quite differently than the enforcement of most of the provisions of Title 18 of the United States Code. Administration of the enforcement effort has been highly centralized. Generally, FCPA cases, by the terms of the United States Attorney’s Manual, are not investigated and prosecuted by the ninety-four United States Attorney’s Offices around the country. They are primarily investigated and prosecuted by the Multinational Fraud Branch in the Criminal Division at the Justice Department. Among other reasons, that is being done to make sure that there is a nationally uniform enforcement policy. Moreover, virtually any step that is taken in the investigative process, even more than in the post-indictment process, has potentially significant foreign policy and national security implications.”
The point is this.
As reflected in the above speeches, there was a time when the DOJ recognized Congressional intent in enacting the FCPA and based on this recognition the DOJ wisely implemented a centralized enforcement policy.
After all, did the country really want an Assistant U.S. Attorney in Seattle, Miami, you name it, bringing an enforcement action concerning payments to foreign government officials that could cause the downfall of a foreign government and raise a host of foreign policy and national security issues?
Centralized FCPA enforcement is still the DOJ’s policy and the U.S. Attorneys Manual states as follows.
“No investigation or prosecution of cases involving alleged violations of the [FCPA] shall be instituted without the express authorization of the Criminal Division. Any information relating to a possible violation of the FCPA should be brought immediately to the attention of the Fraud Section of the Criminal Division. Even when such information is developed during the course of an apparently unrelated investigation, the Fraud Section should be notified immediately. […] The investigation and prosecution of particular allegations of violations of the FCPA will raise complex enforcement problems abroad as well as difficult issues of jurisdiction and statutory construction. For example, part of the investigation may involve interviewing witnesses in foreign countries concerning their activities with high-level foreign government officials. In addition, relevant accounts maintained in United States banks and subject to subpoena may be directly or beneficially owned by senior foreign government officials. For these reasons, the need for centralized supervision of investigations and prosecutions under the FCPA is compelling.”
According to the DOJ’s website, this Attorneys Manual excerpt is from 2000 and even then the DOJ still recognized that its FCPA enforcement efforts were targeted at high-level government officials and other senior foreign government officials.
Things have obviously changed with the DOJ’s FCPA enforcement program.
Most enforcement actions in this new era involve alleged payments to state-owned or state-controlled enterprises with many attributes of private commercial enterprises, employees of various foreign health care systems such as physicians, or actions based on payments to ministerial or clerical officials concerning mundane foreign licenses, permits or customs issues.
Can it truly be said that these enforcement actions concern payments that could lead to the downfall of foreign governments or payments that have “significant foreign policy and national security implications”?
Tracing the history of the DOJ’s centralized FCPA enforcement policy and its original policy justifications actually speaks volumes to how FCPA enforcement has changed in this new era.
There is another point to be made as well concerning DOJ’s centralized FCPA enforcement policy.
It is a special policy.
As noted in this recent post, before recently leaving the DOJ for FCPA Inc., then DOJ Deputy Chief of Staff for the Criminal Division Daniel Suleiman rightly noted as follows. “It is Justice Department policy that no FCPA prosecution can be brought without authorization from the Criminal Division, which distinguishes FCPA prosecutions from most other kinds of federal criminal cases.”
Likewise, former DOJ Assistant Chief for FCPA Enforcement Billy Jacobson also rightly observed (see here for the prior post) as follows.
“The FCPA has been recognized and treated as different by the U.S. government since its passage in 1977. […] [The FCPA] is one of just a few, select statutes to be prosecuted centrally from one DOJ office. The over-whelming majority of federal criminal statutes may be brought by each of the country’s U.S. Attorney’s Offices, but FCPA actions may be brought only by the Fraud Section of the Criminal Division within Main Justice.”
What this special DOJ FCPA policy means is that FCPA enforcement is highly centralized and, from a supervisory and discretionary standpoint, very few individuals control FCPA enforcement. Because of the DOJ resolution vehicles typically used to resolve FCPA enforcement actions, these few individuals largely “enforce” the FCPA behind closed doors in Washington D.C. often without any meaningful judicial scrutiny and in the general absence of case law of precedent setting the parameters of the FCPA.
The DOJ’s special policy warrants another special policy.
And that is, as I have long suggested, a prohibition on DOJ FCPA enforcement attorneys with supervisory and discretionary authority from providing FCPA defense or compliance services for five years upon leaving government service.
Over-Criminalization And FCPA Reform Return To Capital Hill
Over-criminalization was a topic discussed at the June 2011 House FCPA hearing. (See here for the prior post).
The topic (as well as FCPA reform) returned to Capital Hill earlier this month.
The House Committee on the Judiciary, Over-Criminalization Task Force, recently held a hearing titled “Defining the Problem and Scope of Over-Criminalization and Over-Federalization.”
In his written testimony, under the heading “Poor Legislative Draftsmanship,” Steven Benjamin (President, National Association of Criminal Defense Lawyers) stated as follows.
“Consider, for example, the Foreign Corrupt Practices Act (FCPA) and the risk it poses for legitimate businesses and the people who work for them. The purpose of the FCPA—to deter and redress bribery and corruption worldwide—is laudable, but its overly broad language has created an enforcement climate where the statute means whatever the government says it means. Despite its more than 30-year history, published judicial decisions interpreting the FCPA are sparse, because enforcement has largely focused on corporations unwilling to undertake the life-or-death risk inherent in the defense of a felony criminal case. Further evidence of this point came last fall when, after significant pressure, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) issued a 120-page guide on the government’s interpretation of the FCPA. While this guidance is certainly helpful to companies and individuals seeking to comply with the current enforcement regimes, the manual sets forth untested legal theories. Because the statutory language does not provide all of the answers to the questions that its broad language permits, the enforcers of the law are left to ‘fill in the blanks.’ And because the document is not legally binding, it affords no reliable protection from prosecution even if a regulated person or entity acts in accordance with the Government’s enforcement guidance. Such a state of affairs is not only bad for business and economic certainty, it is fundamentally unfair and in direct conflict with our constitutional principles of fair notice and due process.”
[For additional reading on the above dynamics, see my 2010 article “The Facade of FCPA Enforcement” and my 2010 Senate FCPA testimony]
In his written testimony, under the heading “Recommendations for Reform”, George Terwilliger (Morgan Lewis and a former DOJ Deputy Attorney General) stated as follows.
“Congress should consider long-overdue reforms to the FCPA. Although this law is only one of several thousand imposing criminal penalties, it presents a significant impediment to businesses and uncertainty in FCPA enforcement standards represents a ready example of the adverse affect on businesses of poorly formed statutes. Specifically, because the FCPA is largely enforced exclusively by the Department of Justice and Securities Exchange Commission, beyond the scrutiny of judicial oversight, enforcement is dependent largely on prosecutorial discretion and internal agency guidance. In order to provide greater clarity to the FCPA, Congress should consider some of the following reforms.
Affirmative Defense for Adequate Procedures: Like the UK Bribery Act, the FCPA should include a presumption against criminal prosecution upon a showing by a defendant corporation that it has in place an effective compliance program, structured around specified standards. Such a reform would permit companies to concentrate resources into structuring effective compliance programs (which in turn would help assist in furthering the deterrent effect of the law), knowing that the efforts could help insure them against unforeseeable corruption risks, thus helping to spur investment in overseas operations and ventures.
Repose of Post-Acquisition Due Diligence: Congress should consider an amendment to the FCPA that would provide that if in a defined period after an acquisition closes, a company conducts a detailed compliance assessment of the acquired company’s operations, promptly discloses to the government and remediates any non-compliant conduct discovered, the acquiring company would be immune from penalty for FCPA violations occurring in the acquired entity’s operations during or prior to that period. Because the realities of pre-acquisition due diligence do not always allow full and complete access to the target company’s operations records, this would incentivize and allow an acquiring company the opportunity to uncover issues not identified during preacquisition due diligence and to quickly and fully integrate the acquired entity into its compliance program.
Additional Reforms: Additionally, in order to promote greater clarity, Congress should consider amendments to the FCPA that would clarify specific ambiguous terms that have been the subject of much spilled ink in the academia, the FCPA bar, and before this very Committee. Specifically, greater clarity should be provided to the meaning of “foreign official” and the degree of control required of foreign governments before a state-owned enterprise or other foreign entity is considered an “instrumentality” of a foreign government.
Greater clarity can also be provided to the meaning of “facilitation payment.” Due in part to the government’s expansive definition of liability, the facilitation payment exception to the FCPA exists in theory, but not in practice. Many companies that discover what appear to be benign facilitating payments can be left paralyzed with uncertainty as to whether the practice violates the law.”
[For additional reading on a compliance defense, see my article “Revisiting an FCPA Compliance Defense“]
Double-Dipping
In this 2011 letter from Senator Mike Crapo to then SEC Chairman Mary Schapiro, Crapo asked, among other FCPA questions “under what circumstances, if any, is it appropriate for both the SEC and the DOJ to seek the recovery of penalties from the same entity for the same conduct.”
As noted in this prior post, Chairman Schapiro responded as follows.
“The Commission and Department of Justice do not obtain duplicative penalties in FCPA cases. Typically, the Commission will obtain monetary sanctions in the form of disgorgement (ill-gotten gains) while the Department of Justice obtains monetary sanctions in the form of penalties. In those rare cases where both the Commission and the Department of Justice obtain penalties, the total penalty assessed against the company is no greater than it would be if either the Commission or DOJ alone obtained the penalty.”
Nice answer, but as I noted in the prior post, DOJ penalties are calculated by reference to the advisory U.S. Sentencing Guidelines where an important factor in determining the ultimate penalty amount is value of the benefit received by the company from the conduct at issue.
Among the FCPA reform proposals advanced by Philip Urofosky (former DOJ Assistant Chief of the Fraud Section) in this article is to “eliminate overlapping enforcement jurisdiction” – in other words Urofosky writes, “the SEC should get out of the anti-bribery business.”
He writes as follows.
“The SEC’s enforcement of the anti-bribery provisions raises a fundamental matter of fairness. Take two companies, one public and one private, and assume that both violate the FCPA and realize the same illicit gain from the violation. The private company will be subject only to DOJ’s jurisdiction and will therefore be exposed to a criminal fine of up to twice its gain. The public company, on the other hand, will be subject both to that criminal fine and to a civil fine and disgorgement of the illicit proceeds, thus potentially paying a third more in fines than the private company for the same conduct.”
Should the SEC be removed from enforcing the FCPA’s anti-bribery provisions, I’d call it “granting the wish” because, as noted in my article “The Story of the Foreign Corrupt Practices Act,” the SEC never wanted any part in enforcing the FCPA’s anti-bribery provisions. For additional support for this reform proposal, see Professor Barbara Black’s article (here) “The SEC and the Foreign Corrupt Practices Act: Fighting Global Corruption Is Not Part of the SEC’s Mission.”
Despite the SEC’s response that it does not double-dip in FCPA enforcement actions involving a DOJ component, like in many instances of enforcement agency rhetoric, the reality suggest something different.
Consider the recent Total enforcement action (see here for the prior post). At $398 million in total fine and penalty amounts, the action is the third largest in FCPA history. The action involved a DOJ component ($245.2 million) and a SEC component ($153 million).
It is clear from the enforcement agency documents that approximately $150 million represented a double-dip.
The DOJ DPA sets forth the Sentencing Guidelines calculation and notes that the base fine was $147 million “which corresponds to the value of the benefit received in return for the unlawful payments.” This base fine amount is the most significant factor determining the fine amount after the culpability score multiplier is added to it.
The SEC’s order states that Total’s improper payments “netted Total approximately $150 million in profits.” Based on this figure, the SEC ordered Total to pay $153 million in disgorgement and prejudgment interest.
In other words, Total repaid the approximate $150 million benefit it received from the alleged improper payments twice – first to the DOJ and then to the SEC.
This is called double-dipping.
And it is not unique to the Total enforcement action. Nearly every FCPA enforcement action that involves a DOJ and SEC component, in which the SEC seeks disgorgement, involves the same dynamic.
Friday Roundup
Enforcement agency speeches, “foreign official” delay, and for reading stack. It’s all here in the Friday roundup.
Enforcement Agency Speeches
This prior post detailed comments by Mary Jo White prior to becoming SEC Chairman.
Last week, White spoke before the Investment Company Institute on the general topic of the SEC’s role in an increasingly global financial and regulatory system. She stated as follows (see here) concerning the SEC’s enforcement of the FCPA.
“Of course, misrepresentations and other unlawful actions travel in both directions across borders, which is another reason why our partnership with our regulatory counterparts abroad is so important. Among the most prominent concerns in this regard is bribery by U.S. companies overseas, which not only undermines international markets and governments but also simultaneously undermines the reporting and disclosure integrity of our own markets. Thus, strong and fair enforcement of the Foreign Corrupt Practices Act, which forbids U.S. companies from bribing foreign officials, has been and will continue to be a priority for us. Our first objective is to help companies avoid FCPA violations by educating them. And so our staff along with our colleagues at the Department of Justice recently published a comprehensive Guide to the FCPA to give clear guidance and clear up some myths. Of course, the other side of education is deterrence. Deterrence can mean strong enforcement actions with tough disgorgement and penalties. But it can also mean the tangible benefits that come with cooperation – as demonstrated by the Non-Prosecution Agreement with Ralph Lauren Corporation we announced in April. In this particular case, the corporation’s Argentine subsidiary paid bribes to government and customs officials to improperly secure the importation of their products into the country. The bribes occurred during a period when the U.S. parent company lacked meaningful anti-corruption compliance and control mechanisms over its foreign subsidiary. The misconduct came to light as a result of the company’s efforts to improve internal controls and compliance. And the company immediately reported the problem to the SEC and provided exceptional assistance to our investigation. Successful FCPA cases also increasingly require assistance from foreign law enforcement authorities. That is why we recently partnered with the DOJ and FBI in conducting a foreign bribery training program that provided intensive training to 130 foreign investigators and prosecutors from 30 countries, many on which the SEC staff relies for mutual legal assistance in FCPA cases.”
Yesterday, Daniel Suleiman (DOJ Deputy Chief of Staff for the Criminal Division) spoke at the Minnesota Bar Association’s Annual International Business Law Institute. (See here). Suleiman offered “some views from the U.S. Department of Justice on the topic of anti-corruption enforcement” and “what the Justice Department is doing in the area of criminal enforcement to fight corruption at home and abroad.” He stated, in pertinent part, as follows.
“I think of our anti-corruption efforts as falling into three principal buckets: number one is criminal prosecution; number two is assisting foreign countries to build up their judicial, prosecutorial, and investigative institutions; and number three is the pursuit, through civil actions, of the proceeds of foreign official corruption. I will discuss each of these buckets in turn.
First and foremost, the Criminal Division is a litigating operation. We investigate and prosecute cases. Our corruption prosecutions are of two kinds: we prosecute corruption by domestic officials, and we prosecute foreign bribery offenses under the Foreign Corrupt Practices Act, or FCPA.”
[…]
“[W]e have an incredibly strong team of prosecutors who focus exclusively on enforcing the FCPA. Depending upon how familiar you are with FCPA enforcement, you may know that the Criminal Division is the entity in the United States with primary responsibility for criminal enforcement of the Act. It is Justice Department policy that no FCPA prosecution can be brought without authorization from the Criminal Division, which distinguishes FCPA prosecutions from most other kinds of federal criminal cases. The Securities and Exchange Commission, which is a few blocks up the street from us, has primary responsibility for the Act’s civil enforcement.”
“Foreign bribery enforcement has for a long time been an important aspect of U.S. policy. The FCPA was enacted roughly 35 years ago, around the same time that our Public Integrity Section was created to focus on public corruption prosecutions, and it was the first effort of any nation to specifically criminalize the act of bribing foreign officials. The statute was enacted in the wake of the Watergate scandal, but it took more than 20 years for the Act to become a strong enforcement tool. And, over the past several years, the Justice Department has substantially increased its enforcement of the Act.”
“One important aspect of our FCPA enforcement involves, of course, our corporate resolutions. We have collected billions of dollars in criminal fines and penalties to resolve FCPA investigations against companies doing business abroad, including BizJet International Sales and Support Inc., a Lufthansa subsidiary; Alcatel-Lucent; Johnson & Johnson; and many others.”
“But another, critically important aspect of our enforcement regime involves holding individuals responsible for FCPA offenses. There is no greater deterrent to corporate crime than the prospect of prison time. As many have recognized, if people don’t go to prison, then enforcement can come to be seen as merely the cost of doing business. In the past four years, the Criminal Division’s FCPA Unit has obtained over three dozen criminal convictions of individuals, including of people who have been sentenced to as many as 15 years in prison.”
“We are as active today in this area as we have ever been. In the past month alone, we have announced charges against several key defendants in ongoing, active FCPA investigations. In mid-April, in a case that we are prosecuting with the U.S. Attorney’s Office in Manhattan, we secured the arrest of a defendant in connection with an alleged bribery scheme to secure mining rights in the Republic of Guinea. In a separate case, which we are prosecuting with the U.S. Attorney’s Office in Connecticut, we also secured the arrest last month of a defendant in connection with an alleged bribery scheme to secure power contracts in Indonesia. And just two days ago, together with the U.S. Attorney’s Office in Manhattan, we announced charges against two broker-dealer employees and a senior Venezuelan banking official for engaging in a multi-million dollar bribery scheme.”
[…]
“Finally, I want to tell you about a relatively new Justice Department initiative. About three-and-a-half years ago, Attorney General Holder gave a speech in Qatar, at which he pledged to increase the United States’ commitment to recovering foreign corruption proceeds. Since that time, the Criminal Division has led the charge in developing what we refer to as the Kleptocracy Asset Recovery Initiative.”
“The initiative’s purpose is to identify the proceeds of foreign official corruption – in other words, the spoils – forfeit them through civil actions, and, to the extent possible, repatriate the forfeited funds for the benefit of the people harmed. In most criminal prosecutions, a court can order forfeiture, upon conviction, as part of the defendant’s sentence. Often, however, it may be impractical or impossible to bring a criminal prosecution against a particular person – because that person is immune from prosecution, for example, beyond our jurisdiction, or otherwise unavailable. In these circumstances, we have begun bringing civil forfeiture actions to recover the stolen property.”
“We have brought several Kleptocracy cases in the past couple of years, and forfeited millions of dollars in corrupt proceeds. The most high-profile of our Kleptocracy cases to date involves two civil actions we have brought against approximately $70 million in assets allegedly belonging to a government minister in Equatorial Guinea who is also the son of that country’s president. According to court papers, despite an official government salary of less than $100,000 per year, this minister amassed wealth of over $100 million. Among the items we are seeking to forfeit are nearly $2 million worth of Michael Jackson memorabilia (including the white glove), a Gulfstream G-V jet worth $38.5 million, and a $30 million house in Malibu. These are hard, and hard-fought, cases, but we believe strongly that foreign officials who amass wealth through corruption should not be permitted to use the United States as a haven for their ill-gotten gains.”
“Foreign Official” Delay
Oral argument in the “foreign official” challenge pending in the 11th Circuit – originally scheduled for later this month, has been postponed until the week of October 7th.
This is a historic appeal in that it will be the first instance in which a circuit court directly confronts the enforcement theory that employees of alleged state-owned or state-controlled entities are “foreign officials” under the FCPA (see here for a prior post, including embedded links).
Scrutiny Alerts
For more on Barclay’s scrutiny, on both sides of the Atlantic, see this recent article in Middle East Monitor concerning the bank’s relationship with the Abu Dhabi government, including Sheikh Mansour, the deputy prime minister of the United Arab Emirates.
Samuel Rubenfeld (Wall Street Journal Risk & Compliance Journal) has the latest (here) regarding BSG Resources Ltd. a Guernsey-based company in the news after Frederic Cilins, a French citizen associated with the company, was recently arrested and accused of attempting to obstruct an ongoing investigation into whether a mining company paid bribes to win lucrative mining rights in the Republic of Guinea. (See here for the prior post). As noted in the WSJ article, BSG recently released this detailed statement concerning its conduct in Guinea.
Reading Stack
Several articles of interest to pass along from last week’s Corporate Crime Reporter conference. This article details comments made by Denis McInerney (DOJ Criminal Division Deputy Assistant Attorney General) regarding non-prosecution and deferred prosecution agreements. This article details comments made by McInerney concerning my suggested two-step reform plan (see here for the prior post) and also details McInerney’s response to my question concerning the definition of a declination. Articles here and here concern corporate monitors.
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Over the years, Bloomberg’s David Glovin has written some excellent articles concerning Viktor Kozney, Frederic Bourke, et al. With Bourke soon to report to prison, Glovin pens another great article here.
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This prior post discussed the NY Times recent “With Bags of Cash, CIA Seeks Influence in Afghanistan” story and how the story put our stark double standards in the headlines once again. More recently, the NY Times reports (here) as follows. “[Afghan President] Karzai said he had called a meeting […] with the CIA’s Kabul station chief. “I told him because of all these rumors in the media, please do not cut all this money, because we really need it,” he said. “We want to continue this sort of assistance, and he promised that they are not going to cut this money.” For more on the situation, including the views of others, see here from Alison Frankel’s On the Case column.
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See here from Josh Goodman (an attorney at the Federal Trade Commission) titled “The Anti-Corruption and Antitrust Connection.”
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A good weekend to all.
Seeing The Light From The “Dark Ages”
During the panel session on DOJ non-prosecution and deferred prosecution agreements last week at the Corporate Crime Reporter sponsored conference in Washington, D.C., I shared my belief that it seems like DOJ is clearly troubled, with good reason, by traditional notions of corporate criminal liability. (See here for the prior post when I said the same thing about Lanny Breuer’s NPA/DPA speech last September). However, rather than seek substantive solutions to this issue, the DOJ defends an alternate reality (NPAs / DPAs) that are equally problematic.
After listening to fellow panelist Denis McInerney (DOJ, Deputy Assistant Attorney General) describe the goals of DOJ prosecution – among other things, to better promote compliance and to hold individuals accountable – I offered a solution in the Foreign Corrupt Practices Act context that could help the DOJ achieve these laudable goals.
Have a compliance defense and abolish NPAs and DPAs.
A compliance defense, along the lines I outlined in my article “Revisiting a Foreign Corrupt Practices Act Compliance Defense,” would not eliminate corporate criminal liability. Far from it. Rather, a compliance defense would only apply when, notwithstanding a company’s pre-existing compliance policies and procedures and its good-faith efforts to comply the law, a non-executive employee or agent acts contrary to those policies and procedures in violation of the law.
If a company did not have pre-existing compliance policies and procedures, it could not avail itself of a compliance defense. Similarly, even if a company did have pre-existing compliance policies and procedures, the company could not avail itself of a compliance defense if executive officers or employees (a concept already used in the U.S. Sentencing Guidelines) were involved in the improper conduct.
If this were the framework governing corporate criminal liability, then NPAs and DPAs should be abolished and the DOJ would return to the historical choice of two options: charge or do not charge.
At the conference, I stated my genuine belief that such a two-step reform would better incentive more robust corporate compliance, reduce improper conduct, and thus best advance the FCPA’s objectives of reducing bribery. Such a two-step reform would also increase public confidence in FCPA enforcement actions and allow the DOJ to better allocate its limited prosecutorial resources to cases involving corrupt business organizations and the individuals who actually engaged in the improper conduct. (See the article for additional details).
In short, this two-step reform will better allow the DOJ to achieve many of the objectives McInerney articulated.
However, not surprisingly, McInerney’s response to my two-step reform was the comment that this would be like returning to the “dark ages.”
The question is why?
Presumably most countries have an incentive to better promote compliance and to hold individuals accountable for wrongdoing. Does this mean that the following OECD Convention countries that have a compliance-like defense relevant to their FCPA-like laws are living in the “dark ages” – Australia, Chile, Germany, Hungary, Italy, Japan, Korea, Poland, Portugal, Sweden, Switzerland, and the United Kingdom. (See here).
Are Stanley Sporkin (former Director of the SEC Division of Enforcement, among other positions), James Doty (current head of the PCAOB), and Andrew Weissmann (former Director of the Enron Task Force and current General Counsel of the FBI) all living in the “dark ages”? All have supported compliance-like defenses or concepts relevant to the FCPA. (See here, here, and here).
Are former Attorney Generals Michael Mukasey and Alberto Gonzales or other former high-ranking DOJ officials such as Larry Thompson living in the “dark ages”? (See here, here, and here). Is former DOJ FCPA Unit chief Joseph Covington living in the “dark ages.” (See here).
Or have all these individuals, and others who support an FCPA compliance defense, seen the light and it’s the DOJ who is living in the “dark ages”?