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Friday Roundup

Dear Attorney General Holder, U.K. developments not involving News Corp., and Halliburton updates its disclosure … it’s all here in the Friday roundup.


Senators Klobuchar and Coons Write to Attorney General Holder On FCPA Guidance

As noted in this previous post, in November 2011, Senator Charles Grassley (R-IA) asked Attorney General Holder for detailed information about the DOJ’s promised upcoming FCPA guidance.

Earlier this week, Senators Amy Klobuchar (D-MN) and Chris Coons (D-DE) sent Attorney General Holder this letter regarding the DOJ’s forthcoming FCPA guidance.  From my perspective, the most notable paragraph of the letter was as follows.  “[I]t has become apparent that too many companies are devoting a disproportionate amount of resources to FCPA compliance and internal investigations.  To be clear, it is both necessary and desirable that companies pay adequate attention to compliance efforts, and in certain cases, adequate anti-corruption initiatives may require a significant corporate committment.  Over-compliance, however, can have a negative effect on product development, export promotion, and workforce expansion.”

I agree and devoted an entire section of “The Facade of FCPA Enforcement” (see here pages 997-1009) to why the facade of FCPA enforcement matters including the breeding of overcompliance and time-consuming internal investigations.  See also here pages 8-9 of my Senate FCPA testimony.

In addition, Senator Klobuchar and Coons encouraged the DOJ “to seek out the participation of U.S. corporate stakeholders when formulating its guidance.”  The Senators stated as follows.  “Engagement with the stakeholder community ought to occur prior to the release of guidance.  In the alternative, guidance should be issued in draft form and finalized after a comment period of sufficient length.”

U.K. Developments

Some recent U.K. developments that do not involve News Corp.

In this release, the U.K. Serious Fraud Office announced that Bruce Hall was charged with corruption offenses based on his alleged receipt of bribes while an employee of Aluminium Bahrain B.S.C. (“Alba”).  The charges against Hall relate to previous SFO charges against Victor Dahdaleh, an agent for Alcoa, who allegedly made bribe payments to Alba – see here for the prior post.  In recent years, the DOJ has likewise brought non-FCPA charges against bribe recipients.  See here for instance.

In this release, the U.K. Serious Fraud Office announced charges against a fourth person in connection with the Innospec enforcement action.  (See here for more on the corporate enforcement action).  Miltos Papachristos, a former Regional Sales Director for the Asia Pacific Region for Innospec, was charged with “conspiracy to corrupt in that he gave or agreed to give corrupt payments to public officials and other agents of the Government of Indonesia as inducements to secure, or as rewards for having secured, contracts from the Government of Indonesia for the supply of Innospec Ltd products including Tetraethyl Lead.”  For more on the other three individuals charged – see here.

Halliburton Updates Disclosure

Yesterday’s post (here) touched upon FCPA disclosures and how it seems like every week there is new disclosure to report.

Halliburton’s disclosure yesterday was not new, but it stated as follows.  “We are conducting an internal investigation of certain areas of our operations in Angola, focusing on compliance with certain company policies, including our Code of Business Conduct (COBC), and the FCPA and other applicable laws. In December 2010, we received an anonymous e-mail alleging that certain current and former personnel violated our COBC and the FCPA, principally through the use of an Angolan vendor. The e-mail also alleges conflicts of interest, self-dealing and the failure to act on alleged violations of our COBC and the FCPA. We contacted the DOJ to advise them that we were initiating an internal investigation with the assistance of outside counsel and independent forensic accountants. During the third quarter of 2011, we met with the DOJ and the SEC to brief them on the status of our investigation and provided them documents. We are currently responding to a subpoena from the SEC regarding this matter and are producing all relevant documents. We understand that one of our employees has also received a subpoena from the SEC regarding this matter. We expect to continue to have discussions with the DOJ and the SEC, and we intend to continue to cooperate with their inquiries and requests as they investigate this matter. Because these investigations are at an early stage, we cannot predict their outcome or the consequences thereof.”

In 2009, Halliburton (and related entities) resolved a $579 million DOJ/SEC FCPA enforcement action concerning conduct at Bonny Island, Nigeria.  (See here).


A good weekend to all.

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