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DOJ Guidance – Better Late Than Never, But Will It Matter?

The FCPA’s 1988 amendments required that the Attorney General, “after consultation with the [the SEC], the Secretary of Commerce, the United States Trade Representative, the Secretary of State, and the Secretary of the Treasury, and after obtaining the views of all interested persons through public notice and comment procedures, shall determine to what extent compliance with [the anti-bribery provisions] would be enhanced and the business community would be assisted by further clarification” of its various provisions.  Among other things, Congress requested that the Attorney General consider issuing guidelines as to “general precautionary procedures [companies] may use on a voluntary basis to conform their conduct to the Department of Justice’s present enforcement policy …”.

Following the 1988 Congressional mandate, the DOJ did issue a formal notice inviting all interested persons “to submit their views concerning the extent to which compliance with [the anti-bribery provisions] would be enhanced and the business community assisted by further clarification of the provisions of the anti-bribery provisions through the issuance of guidelines.”  However, the DOJ stated that “only 5 responses were received, and 3 of the responses were to the effect that guidelines were unnecessary” and based on this information it declined to issue FCPA compliance guidelines envisioned by Congress.  In July 1990, the DOJ stated as follows.  “After consideration of the comments received, and after consultation with the appropriate agencies, the Attorney General has determined that no guidelines are necessary…. [C]ompliance with the [anti-bribery provisions] would not be enhanced nor would the business community be assisted by further clarification of these provisions through the issuance of guidelines.”

With that historical background, Assistant Attorney General Lanny Breuer made a noteworthy statement Tuesday before an FCPA audience when he stated that in 2012 the DOJ hopes to “release detailed new guidance on the [FCPA’s] criminal and civil enforcement provisions.”  (See here for Breuer’s speech).
If nothing else, Breuer’s statement appears to represent a welcome attitudinal shift at the DOJ and hopefully adoption of an approach more like the United Kingdom Serious Fraud Office of active engagement on compliance as opposed to just enforcement.  Incidentally, in Lamb v. Phillip Morris Inc., 915 F.2d 1024 (6th Cir. 1990) the court noted that the above FCPA legislative history “clearly evinces a preference for compliance in lieu of prosecution” in ruling that a private right of action and the “introduction of private plaintiffs interested solely in post-violation enforcement, rather than pre-violation compliance, most assuredly would hinder congressional efforts to protect companies and their employees concerned about FCPA liability.”
While a welcome development, DOJ’s promise of FCPA guidance in 2012 will not cure many of the issues that are being debated in good faith during this new era of FCPA enforcement.  I expect DOJ’s guidance to be little more than a compilation in one document of information that is already in the public domain for those who know where to look.  For instance, does anyone think that DOJ’s guidance on “foreign official” will be substantively different from its briefs in the Carson “foreign official” challenge?  Does anyone think that DOJ’s guidance on compliance best practices will be substantively different from the information already contained in DOJ non-prosecution and deferred prosecution agreements?  And whatever DOJ’s guidance is on compliance does it even matter?  Perhaps in the opaque, inconsistent and unpredictable world of DOJ decision making under the Principles of Prosecution of Business Organizations and the U.S. Sentencing Guidelines, but not as a matter of law.
Whenever released and whatever it says, the DOJ’s guidance will be merely that – guidance.  What the FCPA needs is not guidance, but limited structural reforms (such as a compliance defense) as well as a change in DOJ policy (such as elimination of non-prosecution and deferred prosecution agreements).
See here and here for what others are saying about the DOJ’s pledge to issue guidance.
As to FCPA reform, Breuer stated as follows in his speech.  “I am aware that there have been a number of efforts made this year to amend the FCPA, by the Chamber of Commerce and others.  We in the Justice Department are always open – and I personally am – to working with Congress on ways to improve our criminal laws.  That said, I want to be clear about one thing with respect to these proposals:  we have no intention whatsoever of supporting reforms whose aim is to weaken the FCPA and make it a less effective tool for fighting foreign bribery.   Indeed, at this crucial moment in history, watering down the Act – by eliminating successor liability in the FCPA context, for example – would send exactly the wrong message.  Particularly since it has become increasingly clear over the past year that the trend across the globe is toward criminalization of foreign bribery.  The U.K. Bribery Act took effect in July.  Russia recently passed an anti-bribery law; has ratified the U.N. Convention against Corruption; and is expected soon to accede to the OECD Anti-Bribery Convention.  China, too, recently passed an anti-bribery law and is an observer at the OECD’s Working Group on Bribery.  […]  [The FCPA’s] passage in 1977 was a milestone.  But it took decades for the Act to become as strong an enforcement tool as it is today.  Having come this far, on what I believe is a noble journey, we cannot, and should not, start going backwards.  On the contrary, the United States must continue leading the charge against transnational bribery.  […]  In the United States, we have taken a strong stand against corruption, and the tide has been turning that same way in many countries across the globe – both as measured by the number of nations that have passed anti-bribery statutes in the past decade and by the recent popular uprisings that have been fueled, at least in part, by public outrage over corruption.   This is precisely the wrong moment in history to weaken the FCPA.  To the contrary, whether or not certain clarifications to the Act are appropriate, now is the time to ensure that the FCPA remains a strong tool for fighting the ill effects of transnational bribery.  There is no argument for becoming more permissive when it comes to corruption.  Indeed, for the reasons I have articulated, we may together have no greater mission than to work toward eradicating corruption across the globe.  The FCPA is an important mechanism for holding individuals and corporations accountable for fostering corruption abroad, and for motivating others to act responsibly.  We must ensure that it stays that way.”
While Breuer is indeed correct that there is a global trend towards criminalization of bribery and that the U.S. should continue the charge against transnational bribery, it does not follow that FCPA reform will defeat these objectives or be viewed by the world community as waving the white flag of surrender on bribery.  For instance, should the FCPA be amended to include a compliance defense, the FCPA would become similar to the FCPA-like laws of several other OECD Convention countries – see here for a prior post on the compliance defense around the world.  Should FCPA enforcement on successor liability by revisited, the U.S. approach would align with the U.K. approach – see here and here for prior posts containing comments from U.K. SFO Director Richard Alderman on M&A liability issues.
Finally, in his speech Breuer also discussed the DOJ’s Kleptocracy Asset Recovery Initiative.  He stated as follows. “I am firmly convinced that we cannot win our fight against global corruption unless we deprive corrupt foreign officials of the ability to use the United States as a safe haven for their ill-gotten gains.  That is the purpose of our now fully operational Kleptocracy Asset Recovery Initiative .  With this initiative, which I told you last year we were developing, we are working hard to identify, and recover, the proceeds of foreign official corruption through civil forfeiture.  Last month, we announced our most significant Kleptocracy actions to date:  two civil forfeiture complaints filed against $70 million in assets allegedly belonging to Teodoro Nguema Obiang Mangue, a government minister for Equatorial Guinea and the son of that country’s president.  According to the complaints, despite an official government salary of less than $100,000 per year, Minister Obiang corruptly amassed wealth of more than $100 million.  Among the items that we are seeking to forfeit are $1.8 million worth of Michael Jackson memorabilia, a $38.5 million Gulfstream G-V jet, a $30 million house in Malibu, California and a 2011 Ferrari valued at more than $530,000.”

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