Offensive Use Of The FCPA
The article “Foreign Corrupt Practices Act Ripples” documents numerous “ripple effects” of FCPA scrutiny and enforcement beyond a DOJ/SEC enforcement action including so-called “offensive use” of the FCPA by a competitor or adversary to achieve a business objective or to further advance a litigating position.
In 2021, voting machine company Smartmatic filed a $2.7 billion defamation and disparagement lawsuit against Fox News and others in New York State Court alleging that Fox and others intentionally lied about Smartmatic in an effort to mislead the public about the results of the 2020 Presidential election. (See here).
The civil case remains active.
Examples Of A Corporate FCPA Action After A Related Individual Action
In the modern era of FCPA enforcement, most DOJ FCPA enforcement actions against business organizations do not involve related criminal charges against individuals associated with the organization. (See here).
When individuals associated with the company are also charged – based on the same core conduct alleged, in whole or in part, in the corporate action – the process generally occurs in one of three ways.
The corporate action and the individual action(s) occur on the same day.
The corporate action occurs first, followed (sometimes by months or longer) the individual action(s).
The individual action(s) occur first, followed (sometimes by months or even years) the corporate action.
Smartmatic Criminally Charged With FCPA And Related Offenses
In August 2024, the DOJ announced that a “federal grand jury in the Southern District of Florida returned an indictment … charging three executives of an election voting machine and service provider company and a former Chairman of the Commission on Elections (COMELEC) of the Republic of the Philippines for their roles in an alleged bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections. […] These bribes were allegedly paid to obtain and retain business related to providing voting machines and election services for the 2016 Philippine elections and to secure payments on the contracts, including the release of value added tax payments.”
Although not mentioned in the indictment, the company at issue was Smartmatic (and related entities).
DOJ Response Brief: “Snyder Was Not An FCPA Case”
As highlighted in this prior post, in August 2024 the DOJ announced that a “federal grand jury in the Southern District of Florida returned an indictment … charging three executives of an election voting machine and service provider company and a former Chairman of the Commission on Elections (COMELEC) of the Republic of the Philippines for their roles in an alleged bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections. […] These bribes were allegedly paid to obtain and retain business related to providing voting machines and election services for the 2016 Philippine elections and to secure payments on the contracts, including the release of value added tax payments.”
Although not mentioned in the indictment, the company at issue is Smartmatic (and related entities).
DOJ “Intends To Proceed To Trial” In FCPA And Related Enforcement Action Against Smartmatic Executives And Others
As highlighted in this prior post, in August 2024 the DOJ announced that a “federal grand jury in the Southern District of Florida returned an indictment … charging three executives of an election voting machine and service provider company and a former Chairman of the Commission on Elections (COMELEC) of the Republic of the Philippines for their roles in an alleged bribery and money laundering scheme to retain and obtain business related to the 2016 Philippine elections. […] These bribes were allegedly paid to obtain and retain business related to providing voting machines and election services for the 2016 Philippine elections and to secure payments on the contracts, including the release of value added tax payments.”
Although not mentioned in the indictment, the company at issue is Smartmatic (and related entities).