Rather than just prosecuting alleged Foreign Corrupt Practices Act violations, the Department of Justice (presumably) wants business organizations to adopt compliance best practices.
In resolving the record-setting Siemens FCPA enforcement, the DOJ complimented Siemens on its remedial measures, stating in this sentencing memorandum that the company “set a high standard for multi-national companies to follow.”
Yet, in a recent filing in a case seeking release of the Siemens monitor report, the DOJ advances a laughable position.
That position – as articulated by the DOJ in seeking to block release of the monitor report – is that “disclosure of confidential information about Siemens’ compliance programs would provide a free roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how build an effective compliance program and system of internal controls, etc.”
As to relevant background, this March 2016 post highlighted the DOJ’s efforts (along with Siemens and its monitor) to block public release of the Monitor reports.
Never mind that high-ranking DOJ officials have stated that “greater transparency benefits everyone [and] the Criminal Division stands to benefit from being more transparent.”
Never mind that Siemens’ post-enforcement action monitorship ended long ago and the case is no longer active.
The DOJ clearly does not want the Monitor report in the public domain and the previous post detailed the DOJ’s other speculative and specious legal arguments.
The DOJ’s recently filed reply reply brief is heavy on certain exemptions under the Freedom of Information Act. Yet, the brief also touches upon the issue of how “disclosure [of the Monitor Report] would cause substantial competitive harm to Siemens.”
The DOJ explains:
“Release of the document [the Monitor’s Report] would likely cause Siemens substantial competitive harm by allowing its competitors to use its proprietary information to its commercial advantage. Disclosure of confidential information about Siemens’ compliance programs would provide a free roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how to build an effective compliance program and system of internal controls, etc. Release of this roadmap would allow competitors to avoid the extraordinary costs Siemens incurred in gaining the information, undercut Siemens’ efforts to deal honestly with foreign governments, and exploit any vulnerabilities in Siemens’ systems to their own advantage.”
I argued in the previous post that the DOJ should want the Siemens monitor report in the public domain as it would be a valuable educational resource for corporate counsel and compliance professionals on a variety of topics.
The DOJ’s reply brief directly acknowledges this when it states that the Monitor report provides a “roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how to build an effective compliance program and systems of internal controls, etc.”
The DOJ’s position is laughable given that since resolution of the Siemens FCPA matter, Siemens compliance counsel and personnel have been fixtures at numerous FCPA and related conferences to discuss the company’s compliance policies and procedures. For instance, see here “Re-Engineering Global Compliance Programs: The Case Study of Siemens.” See here for the case study authored by Siemens Chief Compliance Counsel titled “Putting the Siemens House in Order – How Siemens Reorganized its Compliance Function After the Bribery Scandal.” See here for a powerpoint presentation by the same individual on the same general topic. See also here, here, here, here, here, here, here, here, here, here, here, here, here, and here for just a few of the numerous other examples that could also be cited. Moreover, the internet is peppered with documents relevant to Siemens’ compliance policies and procedures. For instance, see here for a Siemens document titled “The Siemens Compliance System Prevent – Detect – Respond and Continuous Improvement.” You can even purchase the document here.
The DOJ’s position is further laughable, particularly because – as highlighted in the prior post – the DOJ elsewhere in its briefing states that “through his service, the Monitor provided an important benefit to the DOJ and the public by boosting confidence that Siemens was implementing an effective compliance program that significantly reduced the likelihood of recidivism.”
How is the public even capable of assessing this issue when the public is completely in the dark about what the monitor did and found?
If the DOJ is all for boosting public confidence in law enforcement, there is something the DOJ can do.
If the DOJ is all for providing business organizations subject to the FCPA a “roadmap as to what works in international commerce without violating the FCPA and other anti-corruption laws, what activities to avoid, how to build an effective compliance program and systems of internal controls, etc,” there is something the DOJ can do.
Advocate for the release of the Siemens monitor report.
Yet, the DOJ is doing the exact opposite and I have my own suspicion as to why and its has nothing to do with the issues discussed in the DOJ’s briefs.
