Category: FCPA Statistics

From Healthcare Providers To Customs Officials To SOE Employees – The “Foreign Officials” Of 2013

A “foreign official.”

Without one, there can be no FCPA anti-bribery violation (civil or criminal).  Who were the “foreign officials” of 2013 (at least from an enforcement perspective – recognizing of course that the meaning of this key FCPA element is the subject of on-going dispute including a historic appellate court challenge – see here for links to the briefing).

This post, describes the alleged “foreign officials” from 2013 corporate DOJ and SEC FCPA enforcement actions.

There were 9 core corporate enforcement actions in 2013.  Of the 9 enforcement actions, 5 (55%) involved, in whole or in part, employees of alleged state-owned or state-controlled entities (“SOEs”).  These entities ranged from oil and gas companies to banks .

In 2012, 42% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 348-353).  In 2011, 81% of corporate enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 29-41).  In 2010, 60% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 108-119).  In 2009, 66% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 410-44).  As to whether Congress intended employees of SOEs to be “foreign officials” under the FCPA, see here for my “foreign official” declaration.

Another notable “foreign official” enforcement theory from 2013 was that various foreign health care providers are “foreign officials” under the FCPA.  Of the 9 core corporate enforcement actions in 2012, 2 (22%) involved, in whole or in part, foreign health care providers.  In 2012, 50% of corporate enforcement actions involved, in whole or in part, this enforcement theory.  See here for a prior post on the origins and prominence of this enforcement theory.

Combining enforcement actions that involved, in whole or in part, SOE employees with enforcement actions that involved, in whole or in part, foreign health care providers, the result is 7 of 9 corporate enforcement actions (78%).   Last year, this figure was 10 of 12 (83%).

The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2013.  As is apparent from the specific descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity; in other instances with virtually no specificity.

[Note:  certain of the enforcement actions below technically only involved FCPA books and records and internal control charges.  As most readers know, actual charges in most FCPA enforcement actions hinge on voluntary disclosure, cooperation, collateral consequences, and other non-legal issues.  Thus, even if an FCPA enforcement action is resolved without FCPA anti-bribery charges, the actions remain very much about the “foreign officials” involved.  As I’ve said before, if an employee of a U.S. company consistently entertains his brother-in-law in the corporate suite and seeks reimbursement for “client entertainment” you will not be reading about this FCPA books and records and internal controls violation]

Philips Electronics

SEC

“public officials of Polish healthcare facilities”

Parker Drilling

DOJ

Employees of the Nigerian Customs Service (“NCS”)

Employees of the “Panel of Inquiry for the Investigation of All Cases of Temporary Import Permits Issued Between 1984 to Year 2000 (the “TI Panel”) (a board empanelled for the purpose of examining certain duties and tariffs that the NCS collected or failed to collect; the TI Panel was presidentially appointed, operated under the auspices of the Nigerian President’s office, and possessed the power to issue subpoenas and levy fines)”

Employees of “Nigeria’s State Security Service, a Nigerian intelligence and law enforcement agency that operated as a department within the Nigerian government’s executive”

SEC

Employees of the Nigerian Customs Service (“NCS”)

Employees of the “Panel of Inquiry for the Investigation of All Cases of Temporary Import Permits Issued Between 1984 to Year 2000 (the “TI Panel”) (a board empanelled for the purpose of examining certain duties and tariffs that the NCS collected or failed to collect; the TI Panel was presidentially appointed, operated under the auspices of the Nigerian President’s office, and possessed the power to issue subpoenas and levy fines)”

Employees of “Nigeria’s State Security Service, a Nigerian intelligence and law enforcement agency that operated as a department within the Nigerian government’s executive”

Ralph Lauren

DOJ

“customs and other government officials [in Argentina] to assist in improperly obtaining paperwork necessary for goods to clear customs, to permit clearance of items without the necessary paperwork, to permit the clearance of prohibited items, and to avoid inspection”

SEC

 “Argentine customs officials to secure the importation of RLC’s products into Argentina”

 “Argentine government officials to improperly secure the importation of RLC’s products into Argentina”

Total

DOJ

An Iranian Official described as “the Chairman of an Iranian engineering company that was more than 90% owned by the Government of Iran and substantially controlled by the Government of Iran” and also described as follows.  “The Iranian Official was [also] the head of an Iranian organization concerned with fuel consumption, which was a wholly  owned subsidiary of NIOC, and was a government advisor to a high-ranking Iranian  official.”  NIOC is described as a “government-owned corporation operating under the direction and control of the Ministry of Petroleum of Iran.”

SEC

An Iranian Official described as follows. “Between 1995 and 2004 the Iranian Official was first the head of one wholly owned subsidiary of the National Iranian Oil Company (“NIOC”) and later the head of another NIOC wholly owned subsidiary. The Iranian Official was also a government advisor to a high-ranking Iranian official.”

Diebold

DOJ

Employees of Bank 1 and Bank 2 described as follows.  “[The Banks] were controlled and approximately 70% owned by the [Chinese government] … and were [two] of several state-owned banks in [China] that together maintained a monopoly over the banking system in [China] and provided core support for the government’s projects and economic goals.  The government retained a controlling right in [the Banks], including appointing or nominating a majority of board of directors and top managers at the bank.  [The Banks] were an ‘instrumentality’ of a foreign government [under the FCPA].”

Inferences to employees of banks owned or controlled by the government of Indonesia

SEC

Employees of banks owned or controlled by the government of China

Employees of banks owned or controlled by the government of Indonesia

Stryker

SEC

“various government employees including public health care professionals in Mexico, Poland, Romania, Argentina, and Greece”

“foreign officials employed by a Mexican governmental agency responsible for providing social security for government employees”

“foreign official then employed as the director of a public hospital in Poland,” “a state-employed healthcare professional” in Poland

a person “waiting to be confirmed as chief physician” at a public hospital in Romania

“physicians employed in the public healthcare system” of Argentina

“a foreign official who served as a prominent professor at the Greek University, and was the director of medical clinics at two public hospitals affiliated with the Greek University”

Weatherford

DOJ

Employees of Sonangol, a company wholly owned, controlled, and managed by the Angolan government

Angolan Officials 1, 2, and 3 (described as “high-level, senior officials of Sonangol” with influence over contracts), a “relative of Angolan Official 4 (described as a “high-level, senior official of Angola’s Ministry of Petroleum” with influence over contracts entered into by the Angolan government), Angolan Official 5 (described as “a Sonangol official with decision-making authority in Angola’s Cabinda region”), Angolan Official 3′s wife, Angolan Official 4′s daughter and son-in-law.”

“Decision makers at the national oil company” in the Middle East

SEC

A Sonangol Drilling Manager, Sonangol officials

“Decision makers at the national oil company” in the Middle East

Employees of Sonatrach, an Algerian state-owned company

Albanian tax auditors

the tax director and two members of Albania’s National Petroleum Agency

Bilfinger

DOJ

Employees of the Nigerian National Petroleum Corporation (NNPC), employees of National Petroleum Investment Management Services (a subsidiary of NNPC), the dominant political party in Nigeria, and an official in the executive branch of the Government of Nigeria

ADM

DOJ

Ukrainian government officials in exchange for those officials’ assistance in obtaining VAT refunds

An employee of Industrias Diana (an oil company headquartered in Venezuela that was wholly owned by Petroleos de Venezuela, Venezuela’s state-owned and controlled national oil company)

SEC

Ukrainian government officials in exchange for obtaining VAT refunds

Corporate FCPA Enforcement Was Down In 2013, Or Was It Up, Or Was It Down?

I am no different from the other FCPA aficionados.

I maintain and publish yearly FCPA statistics even though I fully acknowledge that year-to-year FCPA enforcement statistics, and the arbitrary cutoffs associated with such statistics, may be of marginal value given that many non-substantive factors can influence the timing of an actual FCPA enforcement action.

For instance, was the individual FCPA enforcement action announced earlier this week against former executives of PetroTiger a 2013 enforcement action (when the criminal charges were filed) or a 2014 enforcement action (when the criminal charges were unsealed and announced)?

Accepting year-to-year FCPA statistics for what they are, the issue remains:  how does one best analyze and interpret these statistics over time?

Consider the following hypothetical.  In year 1, a city issues 100 speeding tickets and collects $20,000 in fines associated with those tickets.  In year 2, a city issues 90 speeding tickets, but because certain drivers were going really fast, the city collects $25,000 in fines associated with those tickets.  Was there less enforcement in year 2 compared to year 1?  I assume most of you would say that enforcement in year 2 was less than in year 1 even though in year 2 the city collected more money.

The some logic applies to year-to-year FCPA statistical data and for this reason I believe it is most accurate to conclude that corporate FCPA enforcement in 2013 was down from historical averages.

Previous posts this week (here and here) provided various facts and figures from 2013 DOJ FCPA enforcement and SEC FCPA enforcement.   Viewing FCPA enforcement statistics this way is useful and informative given that the DOJ and SEC are separate law enforcement agencies and different issues arise in DOJ and SEC FCPA enforcement actions.

As indicated by the below charts and by using the “core” approach to FCPA enforcement statistics (an approach the DOJ endorses), both DOJ and SEC corporate enforcement in 2013 was down from historical averages

Corporate DOJ FCPA Enforcement Actions

Corporate SEC FCPA Enforcement Actions

However, if one analyzes corporate FCPA enforcement statistics based on settlement amounts, corporate FCPA enforcement was up in 2013.

Corporate DOJ FCPA Enforcement Action Settlement Amounts

Corporate SEC FCPA Enforcement Action Settlement Amounts

Viewing FCPA enforcement in the aggregate (DOJ and SEC combined) is of course also useful and informative and in 2013 the DOJ and SEC combined collected approximately $720 million in 9 corporate FCPA enforcement actions.  The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2013, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year (an occurrence that happens in most years including 2013).  The below chart has been updated since its first publication here.

Corporate FCPA Enforcement Actions (2007-2013)

In short, the number of core corporate FCPA enforcement actions in 2013 was the lowest in seven years.

Thus, corporate FCPA enforcement in 2013 was down.  Yet, the amount collected in these FCPA enforcement actions in 2013 was more than in 2012 and 2011.  Thus, corporate FCPA enforcement in 2013 was up.

In closing, have it your way.

However, the way I believe is the more accurate and reliable way to keep and analyze FCPA enforcement statistics is by focusing on unique instances of FCPA scrutiny (not settlement amounts) and tracking enforcement actions using the “core” approach.

Friday Leftovers

Scrutiny alerts, corruption in China, quotable, and for the reading stack.  It’s all here in the Friday leftover version of the roundup.

Scrutiny Alerts

Caribbean News Now reports here as follows.

“A complaint has been filed with the Department of Justice (DOJ) in the United States under the Foreign Corrupt Practices Act (FCPA) in relation to a contract purporting to grant oil exploration rights over some eight million acres of Saint Lucia’s maritime territory.  The 46-page complaint, which Caribbean News Now has seen, names Saint Lucia’s prime minister, Dr Kenny Anthony, and RSM Production Company (RSM), a Texas company, along with its president Jack J. Grynberg. Caribbean News Now has also seen a written notification confirming receipt of the document by the DOJ.

[…]

Specifically, the complaint notes that, in or about February 2000, Anthony, as then minister of finance, planning and sustainable development, signed a contract with RSM that purported to grant the company an “Exploration License” in respect of territorial maritime resources belonging to Saint Lucia amounting to 8,726,263 acres.  However, under Saint Lucia’s Minerals Vesting Act, all minerals in, on or under any land in Saint Lucia are vested in and controlled by the Crown and only the governor general may grant a licence to prospect for and/or mine such minerals.  Further, although the contract provides that RSM shall pay a royalty to “the Government” (as required by section 5 of the Minerals Vesting Act), it goes on to state that the liability of RSM in this respect shall be discharged by paying such royalty to the minister and not the government.”

Reuters reports here as follows.

“The U.S. Justice Department is probing Morgan Stanley for its hiring practices in China as part of an industry-wide investigation by the government into whether banks’ employment of politically connected Chinese breached U.S. bribery laws, according to people familiar with the matter.  As part of the industry sweep, the U.S. Securities and Exchange Commission sent letters to Morgan Stanley and other banks, including Goldman Sachs and Citigroup, seeking information about their hiring practices, according to several people familiar with the matter.  The SEC has asked the financial services firms to provide information about their hiring of the relatives of government officials in China …”.

This is not a surprising development following the New York Times August story regarding JPMorgan (see here for the prior post).

Corruption in China

The Congressional-Executive Commission on China recently held a roundtable on “Corruption in China Today: Consequences for Governance, Human Rights, and Commercial Rule of Law.”  As stated on the Commission’s website:

“Corruption takes many forms in China, from corrupt officials at all levels using their public office for private gain and seizing land for development to corrupt state-owned enterprises gaming the system to their advantage. Corruption also continues to be among the root causes of rights abuses against Chinese citizens. Senior leaders acknowledge that corruption threatens the legitimacy of the Communist Party and contributes to citizen dissatisfaction, and President Xi Jinping has stated that fighting corruption is a high priority. But Chinese authorities continue to crack down on independent and citizen-led efforts to combat corruption. Panelists will discuss corruption among Chinese high-level officials and recent anti-corruption efforts, and explore corruption’s role in human rights violations. Panelists also will examine corruption linked to state-owned and other enterprises and explore the implications for commercial rule of law.”

Among the panelists were Professor Daniel Chow (Ohio State) (see here for his statement).  In 2012,  I was pleased to play a role, along with   Professor Chow and the staff of the Ohio State Law Journal, in organizing “The FCPA at Thirty-Five and Its Impact on Global Business,” a full-day symposium at The Ohio State University Moritz College of Law.  (See here).

Quotable

On his Corruption, Crime & Compliance site, Michael Volkov states:

“The idea of legal ‘marketing’ has been diluted in the last few years.  As businesses become smarter consumers of legal services, in-house counsel and Chief Compliance Officers are much better at deciphering legal mumbo jumbo.  Perhaps the best example of legal marketing as an oxymoron, was the roll-out of the UK Bribery Act.  Legal marketing was premised on one idea –fear and fear alone.  Client alert after client alert warned companies about the impending doom, the effective date of the UK Bribery Act.  Not to pat myself on the back (assuming my arm is long enough), but I wrote that the UK Bribery Act was a real non-event in the world anti-corruption compliance and that it was unlikely to have any real impact.  To this day, those words still ring true.  After writing the ‘truth’ about the UK Bribery Act, I received a call from the firm’s London partners and was chastised for undermining their entire ‘marketing’ program.  (In stark contrast, many clients wrote me and thanked me for my ‘honesty.'”

Spot-on.

Nearly three years ago, I wrote:

“The U.K. Bribery Act … has been the subject of much discussion and much over-hype in my opinion.  It has been called the FCPA ‘on steroids’ (here) and if one subscribes to the industry marketing material, you might be left with the impression that the end of the world is near.  […]   In sum, I don’t see how companies already subject to the FCPA and already thinking about compliance in a pro-active manner, have much to worry about when it comes to the U.K. Bribery Act because of the adequate procedures defense.  I will be surprised if U.K. enforcement of the Bribery Act reaches the level of U.S. enforcement of the FCPA …”.

See here for my post the day the U.K. Bribery Act went live in July 2011.

See here for my post “Marketing The FCPA … The FCPA Risks Of … Well, Just About Everything.”

For the Reading Stack

The most recent issue of the always-informative FCPA Update from Debevoise & Plimpton is here.  Among other things, the issue summarizes recent remarks of DOJ and SEC officials regarding the FCPA and FCPA enforcement.

*****

A good weekend to all.

Survey Says

Time flies when you are having fun.

As I’ve shared throughout the Fall, this semester I taught a Foreign Corrupt Practices Act class at Southern Illinois University School of Law using my forthcoming book “The Foreign Corrupt Practices Act in a New Era.”  As noted in the release, the course is believed to be one of the first specific FCPA law school classes offered exclusively devoted to the FCPA, FCPA enforcement and FCPA compliance.

Throughout the semester, I have highlighted survey data collected  – anonymously –  from students in the class (see prior posts here, here, and here).   Call them green, inexperienced, and naive as to how things really work.  I call them good FCPA survey respondents because they are immersed in learning: (i) about black letter legal principles; (ii) legal authority as opposed to non-legal sources of information; and (iii) how the law and the adversarial system functions in other areas of law.  I call them good FCPA survey respondents because their answers are not influenced by client concerns, maintaining their own practice, or maintaining good will with the enforcement agency officials who possess the “carrots” and “sticks” relevant to FCPA enforcement.

This fourth and final set of survey responses touch upon FCPA compliance and whether the current FCPA and enforcement policies and procedures are best achieving the original goals of the FCPA.

Set forth below are the survey questions and responses.

In the FCPA Guidance and in connection with its release, the DOJ/SEC have stated: (i) that it does not want companies “devoting a disproportionate amount of time policing modest entertainment and gift-gifting,” (ii) that FCPA enforcement is focused on “bribes of consequences – ones that have a fundamentally corrosive effect on the way companies do business;” and (iii) that it wants companies to spend “compliance dollars in the most sensible way.”  Yet, recent FCPA enforcement actions have included allegations concerning perfume; dresses and handbags; a bottle of wine; a watch; a camera; kitchen appliances and business suits; television sets, tea sets and office furniture.  Based on the above:

A. The enforcement agencies are right to send a deterrence message through such enforcement actions because such things of value are “bribes of consequence” that can have a “fundamentally corrosive effect on the way companies do business” = 11%

B.  The enforcement agencies are sending conflicting messages concerning FCPA compliance and wise and efficient use of corporate resources = 89%

Does the FCPA have more of a “soft” enforcement impact on companies or a ‘”hard” enforcement impact?

A.  “Soft” enforcement impact = 78%

B.  “Hard” enforcement impact = 22%

[FYI – As distinguished from “hard” enforcement of a law by enforcement agencies, “soft” enforcement generally refers to a law’s ability to facilitate self-policing and compliance to a greater degree than can be accomplished through “hard” enforcement alone].

Has this new era of FCPA enforcement resulted, in certain respects, in wasteful overcompliance and compliance fatigue?

A.  Yes = 95%

B.  No = 5%

If you answered “yes” to the above question, rank in order of importance (with 1 being most responsible and 3 being least responsible) who or what is most responsible for creating these compliance conditions?

The FCPA – the law itself = average = 2.7

The DOJ and SEC due to its enforcement theories and its conflicting messages concerning compliance = average = 1.2

FCPA Inc. and its “fear-based” marketing = average = 2

Is the current FCPA (i.e. the statute) and current FCPA enforcement policies and procedures best achieving the original goals of the FCPA?

A.  Yes = 19%

B.  No = 81%

Once Again, Not The Media’s Finest FCPA Moment

As readers no doubt know, I have my fair share of concerns regarding this new era of Foreign Corrupt Practices Act enforcement.  (See here for my article “The Facade of FCPA Enforcement,” and here for my 2010 Senate testimony, among other things).

Peter Schweizer has concerns about this new era of FCPA enforcement as well.

However, attributing various aspects of FCPA enforcement to the Obama administration is just simply off-base.

That is what Schweizer, author of the new book “Extortion:  How Politicians Extract Your Money, Buy Votes and Line Their Own Pockets,” recently did on CNN’s Lou Dobbs Tonight.  Set forth below is what he said – see here for the video.

DOBBS: The Obama administration has a long history of  rewarding its friends and punishing its political enemies. Joining me now to  explain the administration’s — well, what he calls extortion tactics and  maneuvers, Peter Schweizer, president of the Government Accountability Institute  and author of the explosive new best-seller “Extortion: How Politicians Extract  Your Money, Buy Votes and Line” — of course — “Their Own Pockets.” I added the  “of course.”

Peter, great to have you back with us.

SCHWEIZER:  Thank you, Lou. It’s  great to be on with you.

DOBBS: You know, last night  here, we talked about Congress and the ways in which it is lining its pockets,  doing business, and in fact, institutional corruption is what much of it appears  to be. The executive branch is certainly — certainly in every bit the same  league, and its — its favorite device, you write, is the Foreign Corrupt Practices Act.

What are some — what are some of the companies that it  has attacked with this?

SCHWEIZER: Well, here’s what’s  interesting about the Foreign Corrupt  Practices Act. It was created in 1977. It was actually written by  attorneys at Covington and Burling, which is the law firm that Eric Holder  and a lot of top DOJ people came from.

And for 30  years, Lou, it was pretty much a dormant law. You had on average three cases a  year. When President Obama came into office, it exploded. And what’s concerning  about how this law has been used is it’s been targeted against companies or  entities that the administration deemed to be anti-Obama or not supportive of  his policies.

So over the last several years, you saw  everyone from Koch Industries to News Corp., your parent company, to HP, who’s  headed by a Republican, to Las Vegas Sands, which, of course, is — is largely  owned by a gentleman who’s funneled tens of millions of dollars into Republican  causes…

DOBBS: Sheldon Adelson, the billionaire.

SCHWEIZER: Exactly. And you’ve also seen industries that  were very, very supportive in 2010 of the Republican takeover of Congress,  namely the independent oil and gas industry and the hedge fund industry were  targeted with so-called search — sorry, with sweep letters where they basically  said, We’re going after your industry. And so it’s a major intimidation tool.

DOBBS: An intimidation tool and an intimidation tool to be  used as intimidation often is any  part of life to — to raise money…

SCHWEIZER: Yes.

DOBBS: …  whether it be contributions, whether it is to line the pocket of a specific  friend of this administration, correct?

SCHWEIZER: Yes,  that’s exactly right. And actually, there — there is academic evidence,  statistical studies that have been done that shows that if you are a company or  an individual who gives campaign donations, if your corporate PAC gives campaign  donations to the right people, you basically are going to cut in half the  chances that you are going to have the book thrown at you and face criminal  charges and civil charges.

So there’s evidence that  this works. And the timing is also very, very disconcerting. For example, days  after the 2010 election, and only a couple weeks after President Obama had said  in a radio interview, we’re going to punish our political enemies, that’s when  they send out the industry sweep letters to the independent oil and gas industry  and they said we are now coming after you. And the oil and gas industry in 2010  had basically gone four to one for Republicans as opposed to Democrats so the  timing is very, very suspect as well.

DOBBS: Let me —  let me share with our — with our viewers that quote from — from the President  telling an audience, quote, “We’re going to — we’re going to punish our enemies  and we’re going to reward our friends who stand with us on issues that are  important to us” — a blatant declaration of purpose and intent of which as you  document they seemed to have fulfilled.

By the way I do  want to point out 120 of those investigations under the Foreign Practices Act in  2009 about the same number in 2010 then it drops to about half of that in 2011  and 2012 does that the extortion rate is declining that there is some constraint on the administration?

SCHWEIZER: No there is not any constraint unfortunately the problem is that a lot of companies are  realizing you know what we’re not even going to fight this we’re basically going to cave and give them what they want because even if we end up winning in some sort of trial it’s going to be so costly to us in terms of legal fees, it’s also  going to affect our stock price.

And it needs to be  pointed out Lou that part of the problem part of what’s happen is that this Department of Justice is more politicized than really any I would say since the  Nixon administration. And you don’t have to look any further than the fact that  when Obama was elected in 2008 the Department of Justice was populated at top  with no less than five major campaign bumpers including — including the  attorney general himself Eric Holder. These are people that were raising huge  sums of money for President Obama’s election. That’s unprecedented — that has  not happened before.

DOBBS: Peter thanks so much for  being with us. It’s fascinating and if you want to know how your government  works, Peter Schweizer he’ll tell you in here. His book is “Extortion” it’s  available online at bookstores now. We recommend it to you highly. We need a lot  of people who understand how this government works. Peter thanks for being here  and thanks for your contribution to our knowledge. We’re coming right back.

Where to start?

FCPA enforcement has not exploded under President Obama.  For starters, this is yet another example why having accurate and reliable FCPA enforcement statistics is important because inaccurate and unreliable FCPA enforcement statistics muddy the conversational waters.  (See this prior post for more information on what is an FCPA enforcement action and how the “core” approach yields the most reliable answer).

Sure, if one counts the Africa Sting cases (announced in early 2010 – see here) as 22 enforcement actions instead of 1 core enforcement action, one can make it appear that FCPA enforcement has increased under Obama.  If you look at many FCPA Inc. enforcement statistics and see the “blip” for 2010 this is why.

Sure, if one counts the Siemens individual enforcement actions (announced in 2011 see here) as 15 enforcement actions (the DOJ charged 8 individuals and the SEC charged 7 individuals) instead of 1 core enforcement action, one can make it appear that FCPA enforcement has increased under Obama.  If you look at many FCPA Inc. enforcement statistics, this one core action comprises a meaningful chuck of 2011 FCPA enforcement.

Wholly apart from how one counts enforcement actions is the issue that very little FCPA enforcement activity since January 2009 (when Obama became President) can be attributed to his presidency.

For instance, the Africa Sting enforcement action (a manufactured FCPA case involving FBI agents posing as a representative of a Gabon “foreign official”) was set into motion before Obama became President.  Likewise, the Siemens individual enforcement actions are the direct result of the 2008 Siemens corporate enforcement action.

The most recent Stryker enforcement action from October happened during Obama’s presidency, but that enforcement action was set into motion in 2007 when SEC requested information from the company concerning its FCPA compliance.

Perhaps most importantly, the majority of corporate FCPA enforcement actions are the result of voluntary disclosures, not pro-active enforcement actions!

The above information is not complex nor difficult to learn about … if one wants to.

Another claim from the Schweizer interview is that Sheldon Adelson (the CEO of Las Vegas Sands) has somehow been targeted for FCPA scrutiny because he supports Republican causes.    As highlighted in this previous post, the origins of Las Vegas Sands’s FCPA scrutiny is a civil complaint filed in Nevada state court in 2010 by Steven Jacobs (the former President of Macau Operations for Las Vegas Sands).

Likewise, this information is not complex nor difficult to learn about … if one wants to.

Another claim from the Schweizer interview is that the oil and gas industry has been targeted by the Obama administration.  Sure, if you want to make that claim you could easily reference the 2010 enforcement actions against various oil and gas companies that utilized the services of freight forwarder Panalpina.  (See here – as well as posts under CustomsGate on the search feature of this website).  However, those enforcement actions were the direct result of the 2007 Veto Gray FCPA enforcement action (see here).

Once again, this information is not complex nor difficult to learn about … if one wants to.

In short, while I share Schweizer’s concerns about certain aspects of FCPA enforcement, his attempt to pin this on the Obama administration is completely off-base.

Having a proper perspective on FCPA enforcement statistics (see here for the prior post) is so very important as – once again – demonstrated by the Schweizer CNN interview.

The CNN interview – in providing a platform for an author to articulate completely off-base opinions – was once again not the media’s finest FCPA moment.  (See here and here for other examples).