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And The Apple Goes To …


Debevoise & Plimpton’s FCPA Update is consistently one of the best periodic Foreign Corrupt Practices Act publications around.

The most recent issue contains a dandy article by Andrew Levine, Bruce Yannett, Philip Rohlik which focuses on the DOJ’s recent so-called declinations.

For not believing the hype regarding the DOJ’s so-called declinations – as several FCPA commentators have – but rather analyzing the salient question posed by the so-called “declinations,” the Debevoise authors are awarded the FCPA Apple Award which recognizes informed, candid, and fresh thought-leadership on the Foreign Corrupt Practices Act or related topics.

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Blowing The Whistle On Recent Commentary


Pardon me for being that guy, but in the Foreign Corrupt Practices Act space someone needs to put on the stripes every now and then and blow the whistle.

This post does just that regarding certain recent “declination” commentary including the recent Johnson Controls enforcement action. For prior posts on the DOJ’s recent so-called “declinations” in the Nortek and Akamai see this post titled “Dont’ Believe the Hype, Rather Ask What Viable Criminal Charges Did the DOJ Actually Decline.” For prior posts on the Johnson Controls enforcement action see here, here, and here.

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Issues To Consider From The Johnson Controls Enforcement Action


Prior posts here and here concerned the Foreign Corrupt Practices Act enforcement action earlier this week against Johnson Controls (JCI). This post continues the analysis by highlighting additional issues to consider.


According to the SEC’s Order “JCI self-reported the potential FCPA violations to the SEC staff and DOJ in June 2013.” Thus, from start to finish JCI’s FCPA scrutiny lasted 3 years and 1 month.

If the DOJ/SEC want the public to have confidence in their FCPA enforcement programs, they must resolve instances of FCPA scrutiny much quicker.

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Once Again, Don’t Believe The Hype – Rather Ask What Viable Criminal Charges Against Johnson Controls Did The DOJ Actually Decline?


In its nearly 40 years of existence, there have been numerous SEC Foreign Corrupt Practices Act enforcement actions against issuers that did not also involve a DOJ component.

As highlighted below and also last month in this very similar post involving Nortek and Akamai Technologies, there is a simple reason for this. Not all civil SEC FCPA enforcement actions involve viable criminal charges against an issuer.

For most of the FCPA’s history, the DOJ never saw the need to highlight the FCPA cases it did not bring. But in April 2016 the DOJ announced its so-called FCPA “Pilot Program” and went into public relations marketing mode.

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Deceived By Its Indirect Chinese Subsidiary, Johnson Controls Agrees To Pay $14.4 Million To Resolve SEC FCPA Enforcement Action, DOJ Markets Another “Declination”

johnson controls

According to the SEC, “several members” of Johnson Controls indirect Chinese subsidiary “colluded with each other and circumvented and manipulated JCI’s internal and financial controls …”.

The end result was this SEC administrative order released yesterday in which the SEC found that Johnson Controls (JCI) violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act. Without admitting or denying the SEC’s findings, JCI agreed to pay approximately $14.4 million.

Also yesterday, the DOJ released this June 21st letter to JCI’s counsel stating that it has closed its inquiry “concerning possible violation of the FCPA … despite the bribery by employees of JCI’s subsidiary in China.” The DOJ’s letter is the focus of a separate post today.

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