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Change Ahead At The DOJ?

Change

In prior years, November has witnessed FCPA policy announcements from the DOJ.

For instance, as highlighted here, in November 2012 the DOJ (and SEC) released the FCPA Guidance. As highlighted here, in November 2010, then Assistant Attorney General Lanny Breuer announced “we are in a new era of FCPA enforcement and we are here to stay.”

According to this Washington Post article, the DOJ may soon release information in “an effort to increase the incentive for companies to be forthcoming about wrongdoing by their officials and give the business community clearer guidance on penalties under the Foreign Corrupt Practices Act.”

Given the frequency in which media reporting on FCPA issues is wrong, incomplete, or out of context, the prudent course (which will be adopted here) is not to react to the media reporting, but to reserve judgment until the DOJ actually releases information.

At present however, the Washington Post reports:

“[C]oncerns within the Justice Department that the prospective change is too lenient on firms that have violated the law have led senior officials in the criminal division to delay its issuance, according to U.S. officials who spoke on the condition of anonymity to describe internal discussions.

“It’s not a bad thing to provide companies with more transparency” on department policy, but the draft policy “lets them off the hook too easily,” said one person familiar with the matter.

The proposed policy strongly recommends that prosecutors should decline to bring charges against a company that voluntarily discloses violations of the FCPA and cooperates with the government in its investigation — including by furnishing information on employees who may have violated the law.

The Justice Department declined to comment.

Under review is the extent to which companies should be excused even for egregious misconduct because they have voluntarily disclosed it, cooperated with the investigation and taken remedial steps.

[…]

The proposal contemplates that the decision not to prosecute could be accompanied by a fine in the form of forfeiture of company profits. But in general the goal is to enhance the incentive for companies to cooperate by providing more certainty that doing so would not result in a stiff penalty or a criminal charge. Also, there would be no statement of facts that lays out the company’s misbehavior as there is now with many resolutions of FCPA investigations.

[…]

The department in general is seeking to boost its ability to battle foreign bribery. Earlier this year, the FBI announced that, in partnership with the Justice Department’s fraud section, it established three international corruption squads, in New York City, Los Angeles and Washington.

And to complement that move, the fraud section will soon add 10 prosecutors to the FCPA unit — increasing the number of line attorneys by more than half.

Nonetheless, there are companies that now weigh the odds of getting caught if they do not come forward with knowledge of a crime. They think “why not just wait to see whether law enforcement — whether here in the U.S. or overseas — discovers the wrongdoing?” said Andrew Weissmann, chief of the fraud section, in a speech in May. “Why not stay mum and see if it gets discovered and then, if necessary, cooperate to mitigate the damage?”

[…]

But some skeptics within the department argue that while giving companies clearer guidance is a good thing, the practical effect of the proposed policy change would be that a greater number of cases that should be pursued would be dropped.

The number of “declinations” — decisions not to prosecute — would rise. “It means that self-reporting and cooperation would be a ticket out of criminal liability for a company, even if the reported misconduct is serious and substantial,” said a second individual familiar with the draft policy.

On the flip side, the individual said, if a company does not self-disclose and a violation is discovered, it is much more likely to get charged. “It’s almost like an amnesty program,” he said. “But if you don’t take advantage of the self-reporting, it ups the stakes for companies who choose to keep quiet.”

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