For years, these pages have highlighted the need for a Foreign Corrupt Practices Act common language as to the basic question of “what is an FCPA enforcement action?” (See here, here, here, here, here).
This article titled “A Common Language to Remedy Distorted FCPA Enforcement Statistics” exposes in detailed fashion various distorted FCPA enforcement statistics. As highlighted in the article, the absence of a FCPA common language has numerous negative effects including infecting nearly all FCPA enforcement statistics.
The most reliable and accurate way to keep FCPA enforcement statistics is by using the “core” approach which focuses on unique instances of FCPA scrutiny. Using this approach, there were 4 corporate FCPA enforcement actions in 2021 resulting in approximately $259 million in net FCPA settlement amounts. (See here).
The core approach does not distort FCPA enforcement statistics by double counting parallel DOJ and SEC actions involving the same core conduct announced on the same day nor does the core approach distort FCPA enforcement statistics by separately counting the sometimes unique ways the DOJ slices and dices corporate conduct between parent companies and subsidiaries. As highlighted in the above article, the core approach to tracking FCPA enforcement has been endorsed by the DOJ and is a commonly accepted method used to track enforcement in other areas of law.
Nevertheless, set forth below are how various FCPA Inc. participants summed up 2021 FCPA enforcement.
From Jenner & Block:
Charting 10 DOJ enforcement actions and 5 SEC enforcement actions
Asserting that the DOJ assessed $305.8 million in penalties against corporations and asserting that the SEC assessed $126.3 million.
The Jenner & Block publication contains the following methodologies:
“[DOJ] Penalties include any criminal or civil fines, forfeitures, disgorgements, criminal penalties, restitution, or judgments. Where DOJ credited penalties paid to SEC, we offset DOJ’s penalty amount so as not to double count penalties within this chart and the SEC chart on the following page. We did not offset payments DOJ credited to foreign regulators to provide an accurate account of the total penalties assessed.”
“[SEC] Penalties include any criminal or civil fines, forfeitures, disgorgements, criminal penalties, restitution, or judgments. Where SEC credited penalties paid to DOJ, we offset SEC’s amount so as not to double-count penalties within this chart and the DOJ chart on the previous page. We did not offset payments SEC credited to foreign regulators to provide an accurate account of the total penalty assessed.”
From Paul Weiss’s FCPA Enforcement and Anti-Corruption Developments 2021 Year in Review:
“In 2021, the DOJ resolved two and the SEC resolved four corporate enforcement actions.”
“These six enforcement actions resulted in approximately $258.9 million in fines, penalties, disgorgement and prejudgment interest.”
The Paul Weiss publication contains the following methodology:
“To determine the total penalty amounts, we counted criminal and civil penalties, fines, disgorgement and prejudgment interest payments attributable only to the FCPA charges in a resolution with the DOJ or the SEC. Thus, where a resolution included an FCPA penalty in addition to a non-FCPA penalty, only the FCPA penalty was aggregated. Additionally, the total penalty amounts account for offsets, where applicable, between the penalties assessed by the DOJ and the SEC as well as offsets between U.S. and foreign authorities. “Other U.S. Authorities” refers to the Board of Governors of the Federal Reserve System and the New York State Department of Financial Services, which assessed penalties in related investigations.”
From Shearman & Sterling’s FCPA Digest:
“In 2021, the DOJ and SEC jointly resolved four corporate enforcement actions”
“U.S. enforcement agencies assessed … $659 million in corporate penalties in 2021”
From the FCPA Blog:
“In 2021, the DOJ and SEC brought FCPA enforcement actions against four companies and imposed financial penalties totaling $282 million.”
Regarding FCPA settlement amounts, it is fine to track payments made to foreign authorities for violations of foreign anti-bribery and corruption laws, but then track this as a “global settlement amount” and not an FCPA settlement amount for the obvious reason that foreign authorities don’t enforce the FCPA!
Moreover, since when is the dollar amount that law enforcement could theoretically assess for a legal violation a meaningful measure of enforcement activity? For instance, when reporting speeding ticket revenue for a given year/quarter, etc. is a village, town, county going to report speeding ticket fines actually paid or the amount that law enforcement could have theoretically assessed for each speeding violation given the actual speed of the driver?
There are some things in the FCPA space that no doubt are challenging or complex.
However, the basic questions of what is an FCPA enforcement action and how much money the U.S. government actually collects in FCPA enforcement actions should not be.
The wide range of FCPA enforcement statistics published by various FCPA Inc. participants should result in distrust and lack of credibility for FCPA Inc. as a niche industry (which it most certainly is).
For instance, would you trust and view the electrical industry as credible if five electricians visited your house and you got five different readings of what should be an objective measure of your electrical system? Would you trust and view the plumbing industry as credible if five plumbers came to your house and gave you five different readings of what should be an objective measure of your water system?