Medical Services Company To File Restitution Claim In Connection With Glencore FCPA Enforcement Action
As highlighted here, in May 2022 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland) resolved a net $443 million FCPA enforcement action.
According to the DOJ: “From at least in or about 2007 up to and including in or about 2018, Glencore, through certain of its employees and agents, while acting on behalf of Glencore, together with its co-conspirators, knowingly and willfully conspired and agreed with others to corruptly provide more than $100 million in payments and other things of value to various intermediaries with the intent that a significant portion of these payments would be used to pay bribes to and for the benefit of foreign officials to secure an improper advantage and to influence those foreign officials in order to obtain or retain business in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of Congo.”
A portion of the conduct in the Democratic Republic of Congo related to bribe paid in connection with a litigation dispute.
Victims … But No Victims
“Bribery is not a victimless crime.”
It is a narrative in DOJ FCPA talking points (see here for instance).
If bribery is not a victimless crime, then why do FCPA fines and penalties nearly always simply go directly into the U.S. Treasury?
If bribery is not a victimless crime, then why does the DOJ often oppose the attempts by purported victims to pursue legal remedies in connection with certain FCPA enforcement actions? For instance, in connection with certain FCPA enforcement actions, private plaintiffs have sought restitution pursuant to the Mandatory Victims Restitution Act, however the DOJ has opposed such efforts. (See here for an example).
If bribery is not a victimless crime, then why did the Deputy Solicitor General acknowledge during oral arguments before the Supreme Court that “there really is no obvious universe of individual victims from an FCPA violation.” (See here for the prior post).
All interesting issues to ponder.
Friday Roundup
Where is the outrage now, Odebrecht related, and for the people. It’s all here in the Friday roundup.
Where Is The Outrage Now?
In 2016 the Obama Justice Department invented another way to resolve an FCPA enforcement action – the so-called “declination” – a form of resolution that sometimes requires disgorgement. In 2016, the DOJ used this way of resolving an FCPA enforcement five times. (See here).
In 2017 the Trump Justice Department used this way of resolving an FCPA enforcement and – all of a sudden – some commentators were outraged. This commentator stated: “bring a matter to the department’s attention, fall all over yourself to help prosecutors understand the case, and show them you cleaned up your act—and presto, you avoid the DPA or monitor …”. The commentator added: “President Trump himself doesn’t seem much interested in enforcing the [FCPA]” (another odd statement because President’s don’t enforce the law.
Amec Foster Wheeler / John Wood Group Enforcement Actions – What Actually Was Accomplished?
Previous posts here, here, here and here highlighted various aspects of the recent U.S. and U.K. enforcement actions against Amec Foster Wheeler / John Wood Group.
The enforcement actions included: (i) a net $17.7 million FCPA enforcement action concerning conduct in Brazil; (ii) a net $142 million U.K. enforcement action concerning conduct in Brazil, Nigeria, Saudi Arabia, Malaysia, and India; and (iii) a net approximately $17 million Brazil enforcement action concerning conduct in Brazil.
That is a lot of money going into government coffers, but the question needs to be asked: what actually was accomplished through these enforcement actions?
In Resolving The Berko Enforcement Action, What About Liu?
As highlighted in this prior post, in June 2020 the Supreme Court concluded in Liu v. SEC that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under 15 USC 78u(d)(5) (a statutory provision which states in pertinent part that “in any action or proceeding brought or instituted by the Commission under any provision of the securities laws … any Federal court may grant .. any equitable relief that may be appropriate or necessary for the benefit of investors.”).
The previous post mentioned that because most SEC FCPA enforcement actions are resolved administratively – and thus subject to a different statutory provision – that Liu was technically not applicable to most SEC FCPA enforcement actions.
However, the recent FCPA settlement in SEC v. Berko (see here for the prior post) was the first SEC FCPA enforcement action filed in federal court since Liu and thus subject to the Supreme Court’s conclusion that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under 15 USC 78u(d)(5).
However, as highlighted below, the SEC ignored Liu’s “and is awarded to victims” prong and encouraged the court to require Berko to nevertheless pay disgorgement which the court ordered – seemingly in violation of Liu.