I am no different from the other Foreign Corrupt Practices Act aficionados.
I maintain and publish yearly FCPA statistics even though I fully acknowledge that year-to-year enforcement statistics, and the arbitrary cutoffs associated with such statistics, may be of marginal value given that many non-substantive factors can influence the timing of an actual FCPA enforcement action.
For instance, if the Alcoa enforcement action happened 10 days earlier (instead of January 9, 2014) or if the Alstom enforcement action happened 10 days later (instead of December 22, 2014), 2014 FCPA enforcement settlement amounts would be materially different.
Nevertheless and accepting year-to-year FCPA statistics for what they are, the issue remains: how does one best analyze and interpret these statistics over time?
Here is how I see it through reference to another example. In year 1, a city issues 100 speeding tickets and collects $20,000 in fines associated with those tickets. In year 2, a city issues 90 speeding tickets, but because certain drivers were going really fast, the city collects $25,000 in fines associated with those tickets. Was there less enforcement in year 2 compared to year 1? Depends on what you are measuring – the number of infractions or amount of fines.
The some logic applies to year-to-year FCPA statistical data and I believe that the best way to track yearly enforcement is through the number of “core” enforcement actions.
By this measure, although 2014 witnessed two very large settlement amounts, FCPA enforcement in 2014 was below historical averages.
Previous posts (here and here) provided various facts and figures from 2014 DOJ FCPA enforcement and SEC FCPA enforcement. Viewing FCPA enforcement statistics this way is useful and informative given that the DOJ and SEC are separate law enforcement agencies and different issues may arise in DOJ and SEC FCPA enforcement actions.
As indicated by the below charts and by using the “core” approach to FCPA enforcement statistics (an approach the DOJ endorses), both DOJ and SEC corporate enforcement in 2014 was down from recent historical averages
Corporate DOJ FCPA Enforcement Actions
|
Year |
Core Actions |
| 2014 | 7 |
|
2013 |
7 |
|
2012 |
9 |
|
2011 |
11 |
|
2010 |
17 |
Corporate SEC FCPA Enforcement Actions
|
Year |
Core Actions |
| 2014 | 7 |
|
2013 |
8 |
|
2012 |
8 |
|
2011 |
13 |
|
2010 |
19 |
However, if one analyzes corporate FCPA enforcement statistics based on settlement amounts, corporate FCPA enforcement was up in 2014 compared to recent historical averages.
Corporate DOJ FCPA Enforcement Action Settlement Amounts
|
Year |
Settlement Amounts |
| 2014 | $1.25 billion |
|
2013 |
$420 million |
|
2012 |
$142 million |
|
2011 |
$355 million |
|
2010 |
$870 million |
Corporate SEC FCPA Enforcement Action Settlement Amounts
|
Year |
Settlement Amounts |
| 2014 | $327 million |
|
2013 |
$300 million |
|
2012 |
$118 million |
|
2011 |
$148 million |
|
2010 |
$530 million |
Viewing FCPA enforcement in the aggregate (DOJ and SEC combined) is of course also useful and informative and in 2014 the DOJ and SEC combined collected approximately $1.6 billion in 10 corporate FCPA enforcement actions. The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2014, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year (an occurrence that happens in most years including 2014).
Corporate FCPA Enforcement Actions (2007-2014)
|
Year |
Core Actions |
Settlement Amounts |
Of Note |
|
2007 |
15 |
$149 million |
Six enforcement actions involved Iraq Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount. |
|
2008 |
10 |
$885 million |
The $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount. |
|
2009 |
11 |
$645 million |
The $579 million KBR / Halliburton Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount. |
|
2010 |
21 |
$1.4 billion |
Six enforcement actions, all resolved on the same day, centered on various oil and gas companies use Panalpina in Nigeria. Panalpina also resolved an enforcement action on the same day.Two enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island conduct. In other words, there were 14 unique corporate enforcement actions in 2010. Of further note, the two Bonny Island enforcement actions, Technip($338 million) and Eni/Snamprogetti ($365 million) comprised approximately 50% of the $1.4 billion amount. |
|
2011 |
16 |
$503 million |
The $219 million JGC Corp. Bonny Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount |
|
2012 |
12 |
$260 million |
None that significantly skewed the statistics |
|
2013 |
9 |
$720 million |
The $398 million Total enforcement action comprised approximately 55% of the $720 million amount |
| 2014 | 10 | $1.6 billion | Two enforcement actions (Alstom – $772 million and Alcoa – $384 million) comprised approximately 72% of the $1.6 billion amount. |
| TOTALS |
104 |
$6.23 billion |
In short, the number of core corporate FCPA enforcement actions in 2014 was tied for the second lowest in seven years.
In closing, have it your way.
However, the way I believe is the more accurate and reliable way to keep and analyze FCPA enforcement statistics is by focusing on unique instances of FCPA scrutiny (not settlement amounts) and tracking enforcement actions using the “core” approach.
