Contrary To The Narrative
There are certain narratives in the Foreign Corrupt Practices Act space – while theoretically possible – are rarely, if ever, found in actual FCPA enforcement actions.
For instance, all probably recognize that a bribe to foreign official to obtain a contract to build a bridge could – theoretically – result in the contract being awarded to a company that uses sub-standard steel causing the bridge to collapse and thus causing human injuries and/or death.
Likewise, all probably recognize that a bribe to a foreign physician (who the DOJ and SEC may consider a “foreign official”) to implant a defective medical device or to prescribe a worthless drug could – theoretically – result in patient health and safety issues.
Potpourri
[To the best of my recollection, my first introduction to the word “potpourri” was in watching Jeopardy which I was very fond of as a teenager and young adult. Rest in peace Alex Trebek]
Lingo
Daniel Kahn (Acting Chief of the DOJ Fraud Section) was the guest on this recent episode of the Compliance Perspectives Podcast. During the podcast, Kahn talks about COVID’s impact on DOJ enforcement and certain recent enforcement actions such as Goldman Sachs and Beam.
In terms of the DOJ’s mid-2000 revision to its “Evaluation of Corporate Compliance Programs” policy document, Kahn stated that it certainly is by no means a “game changer.” Call me old-fashioned, but I want to hear the DOJ Fraud Section Chief talk about the law and legal requirements not lingo. Yet, the podcast dishes up plenty of lingo (tone at the top, conduct at the top, tone of upper and middle management, empowering compliance, walking the walk, direct line to the board, dotted line to the board, etc.).
Issues To Consider From The Sargeant Marine Enforcement Action
This prior post went in-depth into the recent Foreign Corrupt Practices Act enforcement action against Sargeant Marine Inc. (SMI) and this post continues the analysis by highlighting additional issues to consider.
Why Disclose?
For approximately 15 years, the DOJ has been encouraging business organizations to voluntarily disclose FCPA violations. Yet, time and time again, the DOJ undermines its goal by how it resolves certain enforcement actions.
The SMI matter is the latest example that should cause a board member, audit committee member or others involved in the voluntary disclosure decision to pause.
Potpourri
Agreement in Principle
As highlighted in prior posts here and here in 2016 hedge fund Och-Ziff resolved a $412 million Foreign Corrupt Practices Act enforcement action concerning improper business practices in various African countries.
As highlighted in this 2018 post, former shareholders of Canadian mining company Africo Resources Ltd. (“Claimants”) sough restitution pursuant to the Mandatory Victims Restitution Act for losses allegedly incurred as a result of Och-Ziff’s bribery of corrupt officials in the Democratic Republic of the Congo.
Friday Roundup
Fear based marketing, not a victim, dismissed, and for the reading stack.
It’s all here in the Friday roundup.
Fear Based Marketing
Another example of lawyers trying to market the COVID-19 situation by asserting that “the novel and exigent circumstances brought on by the pandemic significantly increase companies’ risk exposure under the Foreign Corrupt Practices Act and global anti-bribery laws.”
The piece even uses the personal protective equipment hypothetical that not even top DOJ officials seemed to be concerned about. (See here).