There are some issues in the Foreign Corrupt Practices Act space that really should be simple.
For instance, the question “what is an FCPA enforcement action” really should be simple.
However, as highlighted in the article “A Common Language to Remedy Distorted FCPA Enforcement Statistics” various FCPA Inc. participants have adopted (for self-interested reasons perhaps) creative and haphazard counting methods regarding “what is an FCPA enforcement action.” The end result is a muddy conversation about many FCPA enforcement issues and the creative and haphazard counting methods infect the quality and reliability of FCPA enforcement and related statistics of interest to many in the legal and business communities.
As highlighted in the above article and in this recent post, it is clear that the DOJ uses the core approach in keeping its FCPA statistics (the approach advocated in the above article) and it is also clear that the DOJ consider’s so-called “declinations with disgorgement” (or in the case of Linde “declination with disgorgement and forefeiture”) to be FCPA enforcement actions (as well they should – see here).
Yet, some more mud was thrown into the conversation about the basic issue of “what is an FCPA enforcement action”) by Miller & Chevalier (a frequent contributor of mud into FCPA conversations given its creative way of keeping FCPA statistics and its overly expansive interpretation of the word declination – see here and here for prior posts).
In its recent FCPA Summer Review, Miller & Chevalier calls the $11.2 million Linde matter and the $4 million CDM Smith matter “quasi-enforcement actions” and “quasi-resolutions.”
Aside from being absurd, there is little consistency in Miller & Chevalier’s approach. For instance, in the firm’s FCPA 2016 Autumn Review, which discussed the first two “declinations with disgorgement” (see here for the prior post), the firm called these matters:
- “a new FCPA settlement mechanism”
- “settlements”
- “a new hybrid approach to the resolution of FCPA investigations”; and
- “a new form of settlement agreement”
In short, regardless of what form of resolution the DOJ uses (plea agreement, non-prosecution agreement, deferred prosecution agreement, declination with disgorgement, or paying the DOJ with bushels of corn (OK, I made that one up), when a business organization, pursuant to a letter agreement with the DOJ’s criminal division, pays money to the U.S. treasury, that is an FCPA enforcement action. Pure and simple.
Another question that should be simple in the FCPA space is “what is a declination”?
But here again the conversational waters are muddy. (See this prior post titled “What is a So-Called “Declination” – A Big Muddy Mess That’s What It Is”).
For instance, as it has long done the FCPA Blog overuses the term “declination” anytime a company is under FCPA scrutiny but there is no enforcement action.
That’s like saying the police “declined” to charge a sober driver with drunk driving when passing through a field sobriety checkpoint.
The reality of the Net1 situation recently profiled on the FCPA Blog is that – in the DOJ’s own words – “based upon the information known to the Department at this time, it has closed its inquiry into this matter.” As previously highlighted on FCPA Professor, Net1’s (a South African company) FCPA scrutiny arose when a competitor who lost a bid to the company made allegations – allegations that not even South African authorities pursued.
As a DOJ official recently stated: “Our responsibility as prosecutors is to follow the facts wherever they lead us. Sometimes the facts lead us to stop and close an investigation.”
Whether, its the basic issue of “what is an FCPA enforcement action” or the basic issue of “what is a declination,” it would be nice if certain FCPA information sources would stop muddying the FCPA’s conversational waters.
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