The Foreign Corrupt Practices Act specifically authorizes the DOJ to civilly (not just criminally) enforce the statute against non-issuers.
Indeed, between 1991 and 2001 approximately 35% of all DOJ corporate FCPA enforcement actions were civil actions. However, the last time the DOJ invoked this express statutory remedy was in 2001 and the question is posed: why has the DOJ stopped civilly enforcing the FCPA?
Make sure to read to the end of the post to hear the DOJ’s non-responsive answer to this question.
Perhaps instead of creating new ways to enforce the FCPA not even mentioned in the statute (such as non-prosecution agreements, deferred prosecution agreements and most recently declinations with disgorgements) the DOJ should go back to enforcing the FCPA in ways expressly authorized by Congress.
Both the 78dd-2 prong of the FCPA (applicable to “domestic concerns” – FCPA-speak for all forms of U.S. business organizations not issuers and U.S. nationals) and the 78dd-3 prong of the FCPA (applicable to “persons other than issuers or domestic concerns” – FCPA-speak for foreign companies not issuers and foreign nationals) specifically authorize the DOJ to bring civil actions for FCPA violations.
For instance, 78dd-2(d) under the heading “Injunctive Relief” states in full:
(1) When it appears to the Attorney General that any domestic concern to which this section applies, or officer, director, employee, agent, or stockholder thereof, is engaged, or about to engage, in any act or practice constituting a violation of subsection (a) or (i) of this section, the Attorney General may, in his discretion, bring a civil action in an appropriate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond.
(2) For the purpose of any civil investigation which, in the opinion of the Attorney General, is necessary and proper to enforce this section, the Attorney General or his designee are empowered to administer oaths and affirmations, subpoena witnesses, take evidence, and require the production of any books, papers, or other documents which the Attorney General deems relevant or material to such investigation. The attendance of witnesses and the production of documentary evidence may be required from any place in the United States, or any territory, possession, or commonwealth of the United States, at any designated place of hearing.
(3) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the Attorney General may invoke the aid of any court of the United States within the jurisdiction of which such investigation or proceeding is carried on, or where such person resides or carries on business, in requiring the attendance and testimony of witnesses and the production of books, papers, or other documents. Any such court may issue an order requiring such person to appear before the Attorney General or his designee, there to produce records, if so ordered, or to give testimony touching the matter under investigation. Any failure to obey such order of the court may be punished by such court as a contempt thereof.
All process in any such case may be served in the judicial district in which such person resides or may be found. The Attorney General may make such rules relating to civil investigations as may be necessary or appropriate to implement the provisions of this subsection.”
Between 1991 and 2001, the DOJ resolved four corporate FCPA enforcement actions consistent with this express statutory scheme.
- Eagle Bus Manufacturing Inc. (see here for the prior post).
- American Totalisator Co. (see here for the prior post).
- Metcalf & Eddy Inc. (see here for the prior post).
- KPMG Siddharta Siddharta & Harsono
While 4 enforcement actions over a 10-year period may not sound like many, there were only 11 DOJ corporate FCPA enforcement actions between 1991 and 2001. Thus, the 4 enforcement actions highlighted above comprised 36% of all DOJ corporate FCPA enforcement actions during this time frame.
I was curious to learn why the DOJ has stopped civilly enforcing the FCPA and thus posed the below question to the DOJ press office.
“Why has the DOJ stopped resolving corporate FCPA enforcement actions civilly through injunctions as authorized by the FCPA?
In terms of background, both 78dd-2 and 78dd-3 of the FCPA authorize the Attorney General to “bring a civil action in an appropriate district court of the United States to enjoin such act or practice, and upon a proper showing, a permanent injunction or a temporary restraining order shall be granted without bond.”
The DOJ first resolved a corporate FCPA enforcement action this way in 1991 and last resolved a corporate FCPA enforcement action this way in 2001. During this time frame, the DOJ resolved the below four enforcement actions this way.
[link to the above four enforcement actions]
While 4 enforcement actions may not sound like many, there were only 11 DOJ corporate FCPA enforcement actions between 1991 and 2001, thus the 4 enforcement actions comprise 36% of all corporate FCPA enforcement during this time span.
Thus, the question is: Why has the DOJ stopped resolving corporate FCPA enforcement actions civilly through injunctions as authorized by the FCPA?”
The full answer I received back from the DOJ press office was as follows: “We decline to comment. Thank you.”
Perhaps instead of creating new ways to enforce the FCPA not even mentioned in the statute (such as non-prosecution agreement, deferred prosecution agreements and most recently declinations with disgorgements) the DOJ should go back to enforcing the FCPA in ways expressly authorized by Congress.
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