On April 5, 2016, the DOJ announced a one-year FCPA Pilot Program (see here for the prior post).
With just a few weeks left in the program, the DOJ could easily make an emphatic statement about the future of the program.
But that is not what Acting Assistant Attorney General Kenneth Blanco did last week in a speech at the ABA National Institute on White Collar Crime.
Rather, Blanco stated at the conclusion of his speech:
“Before I conclude, I would be remiss if I did not comment on the Fraud Section’s “Pilot Program.” Last year, the Fraud Section implemented a one-year “Pilot Program” for FCPA cases, to provide more transparency and consistency for our corporate resolutions. The “Pilot Program” provides our prosecutors, companies and the public clear metrics for what constitutes voluntary self-disclosure, full cooperation and full remediation. It also outlines the benefits that are accorded a voluntary self-disclosure of wrongdoing, full cooperation and remediation. The one-year pilot period ends on April 5. At that time, we will begin the process of evaluating the utility and efficacy of the “Pilot Program,” whether to extend it, and what revisions, if any, we should make to it. The program will continue in full force until we reach a final decision on those issues.”
Notwithstanding the above language, several media outlets published curious headlines.
Reuters stated: “U.S. Extends Leniency Program for Companies That Disclose Bribery.”
Wall Street Journal Risk & Compliance stated: “U.S. Extends Leniency Program for Companies That Disclose Bribery.”
This law firm authored piece stated: “DOJ Announces Extension of FCPA Pilot Program.”
In a “breaking” alert, Law360 stated “DOJ Extends FCPA Cooperation Pilot.” Only after I contacted the journalist, was the headline revised to say “DOJ Will Continue FCPA Pilot Program While Reviewing Results.”
Curious (dare I say misleading) headlines aside, the salient point is who really cares if the FCPA Pilot Program is extended?
As demonstrated in this prior post (using the DOJ’s own prior speeches) the main thrust of the Pilot Program (that is to encourage voluntary disclosure) was nothing new. All you need to have done over the past decade is pay attention to DOJ enforcement agency speeches because the DOJ has been saying the same thing over and over again.
As demonstrated in this prior post (using the DOJ’s own FCPA enforcement resolution documents) the DOJ’s offer in the Pilot Program to perhaps extend:
(i) up to a 50% reduction off the minimum amount suggested by the guidelines to companies that voluntarily disclose, cooperate and remediate; and
(ii) up to 25% reduction off the minimum amount suggested by the guidelines to companies that cooperate and remediate even in the absence of voluntary disclosure
was nothing new either.
As highlighted in this prior post, several former DOJ FCPA enforcement attorneys generally gave the Pilot Program a thumbs down.
If the above are too many clicks, just read the article “Grading the FCPA Pilot Program.”
In short, the Pilot Program was really nothing new and has long been criticized by knowledgeable observers. In other words, who really cares if the Pilot Program gets extended?
Moreover, as previously highlighted here, measured against a “main goal” the DOJ has for its FCPA Pilot Program (that is “to encourage companies to disclose FCPA misconduct to permit the prosecution of individuals”), the Program is currently failing.
So who really cares if the Pilot Program is extended?
There were also other aspects of Blanco’s speech worth highlighting.
As to multi-jurisdictional prosecutions, he stated:
“In light of the increasingly international scope of the Criminal Division’s white collar enforcement efforts, that last point is critical. To obtain timely and substantial beneficial ownership information or evidence that will lead to understanding these complex corporate structures requires international cooperation. And just as we receive significant assistance from our foreign partners in our investigations and prosecutions, so too do we provide significant assistance to them. This balanced model of reciprocity in information sharing is a vital tool in the modern prosecutor’s toolbox – whether the prosecutor is sitting in the United States, Europe, South America or elsewhere.
This reality – reciprocal information sharing – is giving rise to a developing trend, especially as it relates to international enforcement of criminal laws in the white collar space. And the emerging trend is this: due in part to the significant assistance we provide to our foreign partners, there has been an increase in multi-jurisdictional prosecutions of criminal conduct, particularly when that conduct is transnational in nature and when several countries have prosecutorial authority over it.
This is no longer the future, it is the here and now of global criminal investigations. Countries around the world have strengthened their domestic laws and central authorities, and prioritize white collar prosecutions. This means – and many of you have likely already noticed this – a company operating in country X whose employees bribe a public official in violation of the FCPA, may be investigated and prosecuted by the United States, but also by several other countries with jurisdiction over the conduct that gave rise to the prosecution. Indeed, and especially in the area of bribery of foreign officials, countries around the world are strengthening their laws, investigating and bringing impactful cases. As part of our cooperation with our international partners, where appropriate, we seek to reach global resolutions that apportion penalties between the relevant jurisdictions so that companies seeking to accept responsibility for their prior misconduct are not unfairly penalized for the same conduct by multiple agencies.”
Using U.S. v. Odebrecht as an example, Blanco stated:
“Odebrecht, a case that squarely demonstrates how the world is partnering to investigate and prosecute corruption. Among the most useful tools in the department’s arsenal to prosecute corruption is the enforcement of the FCPA’s anti-bribery provisions. These prosecutions are necessary to combat global corruption that stifles economic growth, creates an uneven playing field for businesses and corporations, and threatens the national security of the United States and other civilized nations. Often, however, the principal acts of criminality are committed in foreign countries and often by foreign actors.
[A]s it relates to the FCPA, from a policy perspective, we like to see more countries enforcing anti-bribery laws. Since the 1980s, there has been a growing international recognition that all countries should aim to disrupt corrupt payments in order to create an even playing field for global business. In the absence of effective domestic anti-corruption laws or resources to prosecute violators of those laws, we would be left with geographical gaps to a collective global effort to halt corruption in its tracks.”
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