One reason Foreign Corrupt Practices Act (and related) enforcement has, in some instances, become unhealthy is because various actors pressure governments to bring more enforcement actions – seemingly regardless of the enforcement theory or the resolution vehicle used to resolve the action.
Such actors seem to prioritize quantity of enforcement over quality of enforcement.
One such group is the The Organization for Economic Cooperation and Development (OECD) and its Working Group on Bribery.
For instance, as highlighted in this prior post, one of the ironies of the OECD’s Phase 3 (2010) report of FCPA enforcement was that while loudly praising the U.S. for its “high level” of enforcement, the Report quitely criticized and questioned many of the policies and enforcement theories which yield the “high level” of enforcement. For instance, the Report noted that the FCPA’s language “does not specifically convey” that cases concerning “an operating license or permit to operate a business, or a reduction in tax or import duty” are in violation of the statute. Yet, many FCPA enforcement actions are based on this theory. Further, the Report noted that “due to an absence of explicit language in the definition of foreign official” it is an open question whether employees of so-called state-owned or state controlled enterprises are “foreign officials” under the FCPA. Yet, numerous FCPA enforcement actions are based on this theory. The Report noted that the increase in NPAs and DPAs “are one of the reasons for the impressive FCPA enforcement record in the U.S.” yet also noted that these agreements are subject to little or no judicial scrutiny.
The more recent OECD Phase 4 (2020) rightly acknowledged that the U.S.’s “high volume of concluded cases is largely attributed” to the buffet of resolution vehicles used by the enforcement agencies. Elsewhere, the Report rightly stated that in certain instances “the DOJ’s interpretation and related implementation of the FCPA” has not “not been tested in court.” (See here for the prior post).
As highlighted in this prior post, the reputation of the OECD took another hit when it explicitly criticized judicial scrutiny of bribery cases in Italy because such scrutiny “yielded a high number of dismissals.” The OECD report on Italy stated in summary fashion:
“The Working Group is seriously concerned that foreign bribery cases litigated in Italy have yielded a high number of dismissals. Almost all foreign bribery convictions are secured through patteggiamento, a form of non-trial resolution. In cases litigated in court, however, after one conviction in 2013, the last seven trials produced five full dismissals, one partial dismissal, and one conviction. Dismissals occur partly because the totality of circumstantial evidence is not considered simultaneously. Cases that may demonstrate bribery when viewed holistically risk being dismissed because of this narrow approach. Proof of all of the details of a corrupt agreement is also necessary. Requiring proof of foreign law adds another hurdle. The defence of concussione remains available, while a new one of effective regret could be interpreted as to serve no useful purpose in foreign bribery cases.”
The report then goes into significant detail about certain legal issues and the results of Italian judicial scrutiny in specific cases. According to the OECD, when bribery and corruption cases are dismissed for “technical-legal reasons,” this apparently is cause for concern. According to the OECD, if a prosecutor feels that there is an “onerous standard of proof [that] applies to foreign bribery cases,” this apparently is a cause for concern. And the biggest joke of a statement in the OECD’s report is that Italy should “provide training and awareness-raising to judicial authorities” – presumably perhaps so that they don’t interpret the law and facts in such a way that could result in a dismissal.
None of this is made up, it is in the OECD Report!
In short, the OECD seems to prioritize quantity of enforcement over quality of enforcement. And of course, the OECD reports are not authored by computers, but real human beings – individuals who – given their positions – often may benefit from more enforcement.
In the aftermath of President Trump issuing an Executive Order titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security,” a collection of former General Counsels of the OECD and former Chairs of the OECD Working Group on Bribery wrote to U.S. Attorney General Pam Bondi to resume “vigorous enforcement.”
