Issues To Consider From The Albemarle Enforcement Action
This recent post highlighted the net $218.4 million enforcement action against chemical company Albemarle Corp.
This post highlights additional issues to consider from the enforcement action.
Timeline
As highlighted in this prior post, in February 2018 Albemarle Corp. disclosed scrutiny. Specifically, the company disclosed:
Chemical Company Albemarle Resolves A Net $218.4 Million Enforcement Action
As highlighted in this prior post, in February 2018 Albemarle Corp. (a North Carolina based chemical company) disclosed Foreign Corrupt Practices Act scrutiny.
More than 5.5 years later, the DOJ and SEC announced a net $218.4 million FCPA enforcement action against the company.
The resolution included a DOJ non-prosecution agreement (pursuant to which the company agreed to pay a $98.2 million criminal penalty and $16.6 million in forfeiture) and an SEC administrative order (pursuant to which the company agreed to pay approximately $103.6 million in disgorgement and prejudgment interest).
Billboard Worthy: Clear Channel Outdoor Resolves $26.1 Million Enforcement Action
Approximately 5.5 years ago (see here for the prior post), Clear Channel Outdoor Holdings (a public subsidiary of iHeartMedia and one of the world’s largest outdoor advertising corporations) disclosed FCPA scrutiny based on the conduct of “several employees of Clear Media Limited, an indirect, non-wholly-owned subsidiary of the Company whose ordinary shares are listed …. on the Hong Kong Stock Exchange.”
Today, the SEC (an enforcement agency whose officials have previously stated that it “should focus on bringing matters to resolution swiftly”) announced a $26.1 million FCPA enforcement action against the company.
In summary fashion, this administrative order finds:
Duped By Certain China Subsidiary Employees, 3M Resolves A $6.5 Million Enforcement Action
The SEC announced today that 3M resolved a $6.5 million Foreign Corrupt Practices Act enforcement.
The basics are as follows.
Approximately 6-10 years ago, a former Marketing Manager of a 3M China-based subsidiary “secretly” provided “tourism activities” for Chinese health care officials.
The Marketing Manager “would create a travel itinerary that included various legitimate business, training and marketing activities for submission to 3M-China’s compliance personnel for approval,” however there were “alternate itineraries” that “consisted of various tourism activities at or near the location of the educational events.”
There is no suggestion that anyone at 3M headquarters knew of or approved of the conduct. Indeed, subsidiary employees, among other things, “falsified internal compliance documents that affirmatively denied and/or omitted mention of the Tourism Activities that were planned as part of the overseas trip.”
What Congress Intended The Third-Party Payment Provisions To Capture As Well As Not Capture
Call me old-fashioned, but sometimes it is prudent to take a step back and ponder what Congress actually intended to capture, and not capture, by enacting the Foreign Corrupt Practices Act.
Indeed, a common thread in most FCPA judicial decisions is judges consulting the legislative history in interpreting the FCPA.
Most FCPA enforcement actions concern, in whole or in part, the conduct of various third parties.