A Final Embarassing Setback For The DOJ Related To The Africa Sting Cases
Yesterday, the DOJ was dealt a final embarrassing setback in connection with the Africa Sting cases as Judge Leon rejected the DOJ’s recommendation of no jail time for Richard Bistrong and sentenced the conductor of the manufactured sting to 18 months in prison followed by three years of supervised release. (For more on the Africa Sting case, see here, as well as numerous prior posts under the subject matter heading Africa Sting).
Bistrong, of course, was not charged in connection with the Africa Sting case. As noted in this prior post, in February 2009 he pleaded guilty to real-world conduct including conspiring with others: (i) to obtain for his employer [Armor Holdings] United Nations body armor contracts (valued at $6 million) by causing his employer to pay $200,000 in commissions to an agent while knowing that the agent would pass along a portion of that money to a United Nations procurement officer to cause the officer to award the contracts; (ii) to obtain for his employer, a $2.4 million pepper spray contract with the National Police Services Agency of the Netherlands by paying a Dutch agent approximately $15,000 while knowing that the agent would pass along some of that money to a procurement officer with the Police Services Agency to influence the contract; and (iii) to obtain for his employer (although it was never obtained), a contract to sell fingerprint ink pads to the Independent National Elections Commission of Nigeria by making kickback payments to a commission official indirectly through an intermediary company.
In this letter to Judge Leon, Bistrong candidly acknowledged spending a portion of his adult life “engaged in dishonest, deceitful and illegal behavior.” (See here for a copy of Bistrong’s sentencing memorandum).
Nevertheless, in its sentencing memorandum (here) the DOJ stated as follows. “Given Bistrong’s substantial assistance to law enforcement, the government recommends that Bistrong be sentenced within the guideline range to a sentence that includes a combination of probation, home confinement, and/or community service.” After detailing Bistrong’s cooperation, the DOJ stated “put simply, the length, depth, breadth, and thoroughness of Bistrong’s proactive cooperation was extraordinary.” As to the failure of the Africa Sting cases, the DOJ stated as follows. “[T]he dismissals and acquittals were not caused by a failure of Bistrong’s cooperation or assistance. Like any other case involving cooperating witnesses, the government views Bistrong’s cooperation in the investigation and prosecution of others independently from the outcome of the Gabon case against others. Credit should be based on Bistrong’s truthfulness and the completeness of his cooperation, irrespective of the outcome of any particular investigation, case, or trial.”
As to the DOJ recommending no prison time for Bistong, Judge Leon remarked, as noted in this post by Mike Scarcella at the Blog of LegalTimes, that the DOJ was “asking for the moon.” In this Wall Street Journal Corruption Currents post, Chris Matthews describes “a courtroom packed with prosecutors, agents from the Federal Bureau of Investigation and a handful of the men Bistrong helped to indict gathered to learn his fate.” Matthews quotes Judge Leon as follows in rejecting the DOJ’s sentencing recommendation. “We certainly don’t want the moral of the story to be: Steal big. Violate the law big. Cooperate big. Probation.”
Michael Madigan (Orrick – here) who represented an individual defendant in the Africa Sting case and who was present at yesterday’s sentencing observed as follows. “Judge Leon had it right on in observing that Bistrong got a huge break on the front side by being charged only with a one count conspiracy despite years of serious criminal conduct both in the US and in England (where he received immunity, with the help of the DOJ). The Judge’s rejection of the DOJ’s recommendation of probation was well warranted on the facts of the case. For example, the evidence showed Bistrong made millions illegally and actually made $1.2 million while acting as a government informant which the government allowed him to keep for his personal use (such as paying for his luxury wedding at the Ritz Carlton overlooking the Pacific while he was serving his difficult duty as a government informant). Bistrong was a one man crime wave who richly deserved his jail sentence.”
Friday Roundup
Burma with conditions, the SEC lawyer heading up the Wal-Mart inquiry, connections between foreign environmental crimes and corruption, FCPA Inc. marketing, adding to the Haiti Teleco Roundup, and a new entrant to the FCPA space. It’s all here in the Friday roundup.
Burma With Conditions
Yesterday Miller Chevalier released this informative alert concerning business opportunities in Burma. As noted in the alert, the U.S. Government recently “enacted measures that dramatically ease the Burmese Sanctions Regulations (“BSR”) that has been in place for over 15 years. On July 11, 2012, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) authorized new investments and the exportation of U.S. financial services into Burma for the first time since 1997 and 2003 respectively through the issuance of two new general licenses.”
As noted in the alert, on the same day that OFAC released the two new general licenses, the State Department published draft reporting requirements [here] relating to investment in Burma.” Pursuant to the draft reporting requirements, “any U.S. person whose aggregate investment in Burma exceeds $500,000” must provide information regarding, among other things, its policies and procedures as they relate to its operations and supply chain in Burma concerning, among other things, “policies and procedures on anti-corruption in Burma.” The State Department document specifically references the OECD Guidelines, Section VII. Combating Bribery, Bribe Solicitation and Extortion [here], and the OECD Good Practice Guidance on Internal Controls, Ethics, and Compliance.” [here].
It’s a bit ironic isn’t it. A company seeking to do business in Burma can obtain the necessary U.S. government licenses by disclosing its pre-existing FCPA compliance policies and procedures consistent with best practices guidance, but if any employee in its organization acts inconsistent with those policies and procedures without management or senior executive knowledge, the U.S. government may criminally prosecute the organization subject only to the non-reviewable, opaque, internal discretion of DOJ enforcement attorneys. See here for “Revisiting a Foreign Corrupt Practices Act Compliance Defense.”
SEC Attorney Sees “The Spotlight As An Opportunity”
This recent Texas Lawbook article profiles Michael King (Assistant Director of Enforcement with the SEC’s Forth Worth office) reportedly heading up the SEC’s Wal-Mart inquiry. King is quoted in the article as saying he views “the spotlight as an opportunity.” Other lawyers quoted in the article stated as follows. “I think King is under tremendous pressure to make Wal-Mart the poster child for what happens when corporations violate [the] Foreign Corrupt Practices Act and then don’t self report.”
Am I the only one alarmed when a government enforcement attorney uses the word “spotlight” and “opportunity” in the same sentence?
An interesting tidbit discussed in the article is that King also headed up the SEC’s enforcement actions against Panalpina and Pride International (see here and here for prior posts). These enforcement actions, as well as others in the so-called CustomsGate actions, reached the outer bounds of the FCPA (and likely involved conduct Congress did not seek to capture in passing the FCPA) and it is likely the same result will occur in any Wal-Mart action as I discussed in this previous post.
FCPA Inc. Marketing
“Firms face increasing exposure to anti-bribery and corruption laws and regulations. Laws such as the Foreign Corrupt Practices Act (FCPA) have been in place in the U.S. for 35 years. Despite this length of time, each year shows increasing non-compliance and growing fines, penalties and judgments by the U.S. Department of Justice. […] The financial impact is more significant than the fine alone. Investigation and litigation costs can easily equal the cost of the fine itself. The firm must then also bear the weight of interaction with a corporate monitor to validate its compliance program for the next 10 to 20 years [really, show me an FCPA monitor or FCPA NPA or DPA that has a 10 to 20 year term] and report to the Federal government. Not to mention the reputation and brand impact that bribery and corruption has upon the firm. If the FCPA is not enough, the United Kingdom approved the U.K. Bribery Act (UKBA) legislation in 2010, which went into force in July 2011. This anti-corruption law brings broader scope and implications to anti-corruption compliance. […] This is the era of the corporate bounty hunter. Government is increasingly turning to insiders (e.g., employees), incenting them to report wrongdoing and non-compliance. […] In an era of increased scrutiny and judgments for anti-corruption, this is a significant concern that keeps executives, the board, legal and compliance professionals up at night.”
So writes AccuitySolutions in a recent white paper titled “Addressing Anti-Bribery and Corruption Compliance.”
The solution, why of course ComplianceMAX and the Anti-Bribery and Corruption Solution “a flexible compliance management platform. The Solution eases the compliance burden by delivering operational effectiveness, human and financial efficiency and agility to compliance processes. The solution enables a firm to manage anti-bribery and corruption programs including monitoring and enforcing policy through workflow management; screening and tracking of high-risk entities and relationships; reporting and communicating compliance issues; and ensuring a state of readiness for inspections and audits.”
Next.
“The US FCPA and UK Bribery Act are far-reaching acts; they reach deep into the organization, leaving almost no part of the business untouched. The acts are taken very seriously both by governments, as well as by the general public. There is little empathy to bribes in the general public. This makes non-compliance, more than many other acts, a reputational risk in itself.”
So writes BWise in a recent white paper titled “US FCPA and UK Bribery Act.”
The solution, why of course The BWise GRC [Governance, Risk and Compliance] Platform “with a best-in-class method to address corruption and bribery, and achieve company-wide compliance and transparency.” (See here).
Next.
Another entrant into the FCPA insurance market (see here and here for previous posts).
Navigators recently announced (here) that “its Navigators Pro division has introduced “Side A Global InNAVation,” a directors and officers (D&O) liability policy to address emerging global risks. This new policy offers dedicated excess coverage for individual directors and officers for specific non-indemnifiable claims, including where the company they serve is insolvent. The policy provides coverage for civil fines and penalties, where insurable by law, when they are assessed pursuant to Section 308 of the Sarbanes Oxley Act of 2002, the Foreign Corrupt Practices Act, the U.K. Bribery Act or similar laws.”
Finally, an informative white paper (here) by FTI Consulting Technology titled “E-Discovery Strategies for International Anti-Bribery Investigations.” The paper discusses the “complexity of issues that may arise during an international anti-bribery investigation” such as data privacy laws, blocking statutes, secrecy laws and ill-defined privilege rules” that are a “common feature of an FCPA investigation.” And by the way “FTI Technology helps clients manage the risk and complexity of e-discovery” and collaborates with clients to develop and implement defensible e-discovery strategies with keen focus on the productivity of document review.”
It truly is an FCPA world.
The Lacey Act Meets the FCPA
The Lacey Act prohibits trafficking in wildlife and plant products in violation of foreign law.
Arnold & Porter attorneys Marcus Asner, Samuel Witten, and Jacklyn DeMar write in “The Foreign Corrupt Practices Act and Overseas Environmental Crimes: How Did We Get Here and What Happens Next?” (Bloomberg Law – see here) as follows.
“Environmental regulation by any country creates a series of touch points between the private sector and government authorities, any one of which may provide an opportunity and a temptation for an unscrupulous employee or agent of a company to seek to corruptly influence a government official. Opportunities for corruption occur, for example, from the moment officials decide how to regulate local natural resources through laws and regulations; how and when they decide who may harvest resources and in what amounts; how permit requests are reviewed; and how local laws are actually enforced in practice. Each point of contact creates an opportunity for offering or making bribes or otherwise seeking improper influence.”
The authors further state as follows. “Though there is no explicit statutory link between the Lacey Act and the FCPA, the possibilities are endless: Potential bribe takers in forestry and fishery schemes could run the gamut from the police, to forestry and fishery officials, to guards, to regulators, to customs and export officials, and even to officials at state-owned companies. All of these are government officials within the meaning of the Foreign Corrupt Practices Act. While there has been no public case charging both Lacey Act and FCPA violations thus far, we believe such investigations may well be just around the corner, and, in any event, responsible companies should do what it takes to protect themselves from the risks.”
Haiti Teleco Roundup
This recent post summarizing the expansive Haiti Teleco related enforcement actions has been updated to reflect Patrick Jospeh’s recent 366 day sentence. Joseph, an alleged “foreign official” at Haiti Teleco previously pleaded guilty to money laundering conspiracy in connection with the bribery scheme. As noted in this recent Wall Street Journal Corruption Currents post by Chris Matthews, Joseph was also ordered to forfeit nearly $1 million.
FCPA Monitor
Rajat Soni recently launched FCPA Monitor (here). FCPA Monitor examines news and cases about the Foreign Corrupt Practices Act and the UK Bribery Act of 2010. Soni is an attorney with several years of experience conducting global internal investigations related to the FCPA. He has worked on large FCPA investigations including those arising from the UN Oil-for-Food Program and Siemens AG.
*****
A good weekend to all.
Friday Roundup
Checking in on Wal-Mart, an enforcement action that flew under the radar from beginning to end, a guilty plea in the U.K., and is sex a thing of value? It’s all here in the Friday roundup.
Wal-Mart
Various reports this week reported on the expansion of Wal-Mart’s FCPA probe. As many readers know, this is hardly surprising as most FCPA inquiries result in the “where else” question as indicated in this prior guest post. Even if the enforcement agencies do not actually ask the “where else” question, a company knows it will eventually be asked and will thus likely conduct a broader review of certain other FCPA high-risk jurisdictions not part of the original inquiry on its own initiative and to demonstrate to the enforcement agencies its committment to compliance and its cooperation.
This June 12th letter from Elijah Cummings (D-MD, Ranking Member, House Committee on Oversight and Government Reform) and Henry Waxman (D-CA, Ranking Member, House Committee on Energy and Commerce) to Wal-Mart CEO Michael Dukes references that Wal-Mart’s review has expanded beyond Mexico to also include Brazil, China, South Africa and India. Indeed, the letter references that Wal-Mart is “conducting a worldwide assessment of the company’s anti-corruption policies” something Wal-Mart indicated it was already doing. In short, Wal-Mart’s FCPA inquiry is following a typical path.
In the letter, Cummings and Waxman again express disappointment as to Wal-Mart’s cooperation in their own Congressional probe. For more on Cummings and Waxman’s interest in Wal-Mart, see this prior post (and links therein).
Meanwhile on the civil litigation front, a 12th lawsuit has been filed in the wake of April’s New York Times story. As noted in this release from the New York City Comptroller, New York City Pension Funds filed a shareholder derivative action in the Delaware Chancery Court alleging “that Wal-Mart’s officers and directors breached their fiduciary duty to the company and its shareholders by failing to properly handle credible claims of the bribery allegations and attempting to cover up details of the scandal.”
Under the Radar
This post from March 2011 highlighted how criminal charges against Manual Salvoch flew under the radar in that the DOJ did not issue a press release announcing the charges and the enforcement action appeared to escape coverage elsewhere. Salvoch is the former CFO of LatiNode and was charged in connection with payments to Hondutel (see here – according to the charging documents a state-owned telecommunications company in Honduras responsible for providing telecommunications services in Honduras). The Hondutel payments also resulted in criminal charges against Jorge Granados (the founder and former CEO and Chairman of the Board of LatiNode), Manuel Caceres (a former Vice President of Business Development) and Juan Vasquez (a former senior commercial executive).
This prior post highlights the sentences of Granados, Caceres and Vasquez.
Last week, Salvoch was sentenced by Judge Paul Huck (S.D. of Florida) t0 10 months in prison and 3 years of supervised release. Just like the beginning, the end of the Salvoch enforcement action also flew under the radar.
The final sentencing scorecard in the LatiNode individual prosecutions is thus as follows.
Granados – 46 months
Caceres – 23 months
Vasequez – 3 years probation
Salvoch – 10 months.
U.K. Plea
Previous posts (here and here) discussed charges on both sides of the Atlantic against Paul Jennings, the former CEO of Innospec. Earlier this week, the U.K. Serious Fraud Office announced (here) that Jennings pleaded guilty to the following charges: “Two allegations of conspiracy to corrupt in that he gave or agreed to give corrupt payments to public officials and other agents of the Government of Indonesia (between 14 February 2002 and 31 December 2008) and Iraq (between 1 January 2003 and 31 January 2008) as inducements to secure, or as rewards for having secured, contracts from that Government for the supply of its products including Tetraethyl Lead by Innospec.”
As noted in this previous post, in March 2010, Innospec resolved enforcement actions on both sides of the Atlantic based on the same core set of facts.
Thing of Value?
At its core, the FCPA’s anti-bribery provisions require “anything of value” to a “foreign official” to “obtain or retain business.”
This recent Reuters story concerning an employee of Oracle’s business unit in Singapore has a “foreign official” (the former head of the city-state’s anti-narcotics agency) and the article describes that the thing of value was provided to the “foreign official” as “an inducement to help further the firm’s business interest.”
The thing of value?
Sex.
Can sex be a thing of value under the FCPA’s anti-bribery provisions? I guess it depends, it’s a factual issue.
On that note, a good weekend to all.
Friday Roundup
Distributor due diligence, a double dose of say what, news from the World Bank, and an FCPA-related sentence reduced. It’s all here in the Friday roundup.
Distributor Due Diligence
David Simon and Alex Kramer (Foley & Lardner – here and here) recently authored “Here’s How U.S. Companies Can Practically Manage FCPA Risks That Come With Global Distribution Networks” in Bloomberg BNA, Prevention of Corporate Liability, Current Report.
The authors note as follows. “While in some areas of the law selling a product to a distributor may insulate a company from liability, the same cannot be said for the FCPA. When a distributor purchases a product, title technically shifts, but if the distributor is seen as acting as a representative of the company whose goods it sells in foreign countries, and that distributor engages in bribery of foreign officials, FCPA liability may very well attach to the company. Consequently, companies need to be careful when working with distributors to ensure they do not engage in corrupt conduct that may wind up costing a company millions in fines and penalties and investigation and defense costs.”
The article next states as follows. “Many companies employ vast distributor networks, sometimes including hundreds, if not thousands, of distributors around the world. Many distributors are more like customers than agents; they merely purchase a product and resell it to others, often in conjunction with other products purchased from other manufacturers. Is it really practical and necessary to conduct full FCPA due diligence on every one of those distributors? Do the U.S. companies in these situations even have the leverage to insist on FCPA representations and warranties in the written agreements, to demand audit rights, and to require certifications by and training of these distributors? The question thus arises whether U.S. companies are faced with a difficult choice either to accept substantial FCPA risk or to devote disproportionate resources to running an FCPA compliance program that fully vets all distributors. We think the answer to this question is ‘‘no’’ and that there is a practical way to minimize the FCPA risk associated with a global distributor network without devoting an unreasonable and disproportionate amount of resources to compliance.”
The practical way?
The authors suggest as follows. “We recommend that companies following a risk-based approach take this risk analysis a step further and focus on the nature of their relationships with their distributors. The goal should be to determine which distributors are the most likely to qualify as agents, for whose acts the company can be held responsible. Think about this as a continuum of risk. On the low-risk end are distributors that are nothing more than resellers with little actual affiliation with the supplier company. On the high-risk end are distributors who are very closely tied to the supplier company, who effectively represent the company in the market and end up looking more like a quasisubsidiary than a customer. […] Once a company segregates the high-risk distributors that likely qualify as agents and potentially subject the company to FCPA liability from those that are mere resellers and pose little FCPA risk, FCPA compliance procedures can be tailored appropriately. For those distributors that qualify as ‘‘agents’’ and also pose FCPA risk, full FCPA due diligence, certifications, training, and contract language are imperative. For those that do not, more limited compliance measures that reflect the risk adjusted potential liability are perfectly appropriate.”
Say What? (1)
A recent op-ed in the Minneapolis Star-Tribune (here) was titled “Good Companies Don’t Bribe. Period.”
Say what?
To be sure, certain Foreign Corrupt Practices Act enforcement actions are based on allegations that executive management or the board was involved in or condoned the improper conduct at issue. For this type of FCPA enforcement action, the title of the article is indeed spot-on. However, this type of FCPA enforcement action is not typical. As noted in this prior post, there are several companies that I call the “World’s Most Ethical FCPA Violators.” These are companies who have earned designation as one of the “World’s Most Ethical Companies” by Ethisphere yet still, during the same general time period, have resolved an FCPA enforcement action or are otherwise the subject of FCPA scrutiny. Companies on this list include: General Electric, Statoil, Deere & Company, Hewlett-Packard, Rockwell Automation, AstraZeneca, Novo Nordisk, and Sempra Energy. For more, see this article from Corporate Crime Reporter titled “World’s Most Ethical Companies and the FCPA.” See also this prior post discussing W.W. Grainger’s recent FCPA disclosure and noting that the company is consistently ranked as one of the “world’s most admired companies” by Forbes.
Say What? (2)
This recent post on the FCPA Blog states as follows. “There’s a reason why you don’t see many of the biggest U.S.-based government contractors on the FCPA top ten list […]. Not that they didn’t struggle with compliance during the early years of enforcement, but they moved quickly to update their compliance and ethics programs once they saw the tide of FCPA enforcement turning. Then they moved on.”
Say what?
Here is the list of the largest contractors in the government market based on an analysis of government procurement data during fiscal 2010. Seven of the companies in the top twenty-one have, in the past few years, resolved FCPA (or related) enforcement actions or are otherwise the subject of FCPA scrutiny: Raytheon, H-P, KBR, Dyncorp, ITT Corp., IBM, and BAE.
The “U.S.-based” and “FCPA top ten list” qualifiers were apparently chosen carefully in the FCPA Blog post.
World Bank News
Earlier this week, the World Bank announced (here) publication “for the first time a set of decisions issued by the World Bank Group’s Sanctions boards in cases of alleged fraud and corruption.” World Bank Managing Director Sri Mulyani Indrawati stated as follows. “The World Bank Group takes a hard line against corruption, and we believe that greater transparency must be part of that effort. By publishing Sanctions Board decisions, we are making all parties involved in the sanctions process more accountable. This move should deepen the deterrent effect of debarments and enhance the educational value of the Sanctions Board’s findings.”
The Sanctions Board decisions can be found here.
Antoine’s FCPA-Related Sentence Reduced
This recent post provided a Haiti Teleco roundup. As noted in the prior post, the Haiti Teleco case (minus the manufactured and now former Africa Sting case) is the largest in FCPA history in terms of defendants charged – 13. Among the group of defendants were three “foreign officials” charged with non-FCPA offenses including Robert Antoine, the former director of international affairs at Haiti Teleco who pleaded guilty in March 2010 to conspiracy to commit money laundering. In June 2010, he was sentenced to 48 months in prison.
As Samuel Rubenfeld (Wall Street Journal Corruption Currents) noted in this recent post, Antoine, “who testified twice at trial on behalf of prosecutors in foreign bribery cases had [his] four-year prison sentence reduced to 18 months, and he will soon be out of prison.”
*****
A good weekend to all.
Friday Roundup
Efforts to influence the upcoming guidance, a stiff FCPA-related sentence, Representatives Cummings and Waxman think they are on to something, and thumbs up – it’s all here in the Friday roundup.
Guidance
Earlier this week, Global Financial Integrity, Open Society Foundations, and others released this letter to the DOJ and SEC concerning upcoming FCPA guidance. The letter addresses “foreign official,” a compliance defense, voluntary disclosure, declination decisions, parent-subsidiary liability, successor liability, de minimis gifts and hospitality, and mens rea and corporate criminal liability.
As to “foreign official” the letter states “that ownership of companies around the world, including in the U.S., is impossible to determine independently” and that “the staff of a U.S. company is not likely to be able to independently verify the direct and indirect ownership of foreign companies.” The letter also states, as to control of an instrumentality by a foreign government, that control can be conferred, among other ways, by “unspoken custom.”
Should one laugh or cry when reading such statements concerning a key element of the most important U.S. law governing international business transactions? Perhaps the groups don’t care. After all, as noted here, some of the groups have previously stated as follows regarding “foreign official” – “The U.S. Chamber is promoting the creation of a definition of “foreign official” so that companies have greater legal certainty. Greater certainty of what? Greater certainty of who they are permitted to bribe and who they are not permitted to bribe. […] In short, defining the term “foreign official” would underscore the idea that it is OK to bribe certain people and not others, a principle the United States surely does not want to promulgate.”
Duperval Sentenced
Earlier this week, the DOJ announced (here) that “Jean Rene Duperval, a former director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco), a Haitian state-owned telecommunications company, was sentenced [by U.S. District Court Judge Jose Martinez in the Southern District of Florida] to nine years in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.” The stiff sentence continues the trend of the Southern District of Florida (and Judge Martinez in particular) handing out the toughest FCPA or FCPA-related sentences in the country.
As noted in the release, Duperval was convicted in March 2012 of two counts of conspiracy to commit money laundering and 19 counts of money laundering. According to the release, “Judge Martinez also ordered Duperval to forfeit $497,331.” Assistant Attorney General Lanny Breuer stated as follows. “Mr. Duperval took bribes in exchange for giving companies an unfair and illegal advantage in the marketplace, and then tried to hide these illicit transactions behind the cloak of shell corporations and fake invoices. Just as we prosecute corrupt businesspeople under the FCPA, we will hold accountable corrupt foreign officials when they seek to launder the proceeds of that bribery through the U.S. financial system. Today’s nine-year prison sentence sends a strong message to foreign officials and others who would facilitate foreign corruption that they will face serious consequences.”
As noted in this prior post, the Haiti Teleco case (minus the manufactured and now former Africa Sting case) is the largest in FCPA history in terms of defendants charged – 13. The prior post provides a summary of all the enforcement actions.
The Latest FCPA Reform Volley
If your third cousin received a speeding ticket years ago does this prohibit you from forever seeking reform of speed limit laws? Probably not the best analogy, but Representatives Elijah Cummings and Henry Waxman seem to think so. As noted in this previous post, Cummings (Ranking Member of the House Committee on Oversight and Government Reform) and Waxman (Ranking Member of the House Committee on Energy and Commerce) sent letters to the Chairman of the Board of Directors of the Retail Industry Leaders Association and the President of the U.S. Chamber of Commerce stating as follows. “We are concerned about the role that Wal-Mart officials may have played in the Chamber’s Institute for Legal Reform (“ILR”). It would appear to be a conflict of interest for Wal-Mart officials to advise on ways to weaken the Foreign Corrupt Practices Act at a time when the leadership of the company was apparently aware of corporate conduct that may have violated the law.”
Earlier this week, Representatives Cummings and Waxman again put pen to paper and sent this letter to the President of the U.S. Chamber of Commerce stating as follows. “A new analysis by our staff reveals that Wal-Mart is not the only company represented on the ILR’s board that has faced allegations that it violated the Foreign Corrupt Practices Act. Our review of ILR’s tax filings from 2007 to 20 10, member companies’ filings with the U.S. Securities and Exchange Commission (SEC), and other documents reveals that 14 out of 55 ILR board members-almost one in four- were affiliated with companies that were reportedly under investigation for violations or had settled allegations that they violated the Foreign Corrupt Practices Act.” See here for more.
Closing with the analogy, perhaps Representatives Cummings and Waxman should instead inquire about how the speeding laws are being enforced – or at the very least – read this prior post titled “The Sun Rose, A Dog Barked, And A Company Disclosed FCPA Scrutiny.”
Thumbs Up
To Howard Sklar for this recent post on his Open Air Blog. I agree with the general thrust of Howard’s argument. So did Congress when it passed the FCPA. For that reason, and here is where I disagree with Howard, the issues he identifies are legal issues, not merely policy issues.
*****
A good weekend to all.