Where is the outrage now, Odebrecht related, and for the people. It’s all here in the Friday roundup.
Where Is The Outrage Now?
In 2016 the Obama Justice Department invented another way to resolve an FCPA enforcement action – the so-called “declination” – a form of resolution that sometimes requires disgorgement. In 2016, the DOJ used this way of resolving an FCPA enforcement five times. (See here).
In 2017 the Trump Justice Department used this way of resolving an FCPA enforcement and – all of a sudden – some commentators were outraged. This commentator stated: “bring a matter to the department’s attention, fall all over yourself to help prosecutors understand the case, and show them you cleaned up your act—and presto, you avoid the DPA or monitor …”. The commentator added: “President Trump himself doesn’t seem much interested in enforcing the [FCPA]” (another odd statement because President’s don’t enforce the law.
When the Trump Justice Department used this form of resolution a second time, the same commentator seemingly had a come apart: “we have another FCPA enforcement action under the Trump Administration— and yet again it’s a decision not to prosecute …”. The commentator wondered whether the “cynical view that the Trump Administration just isn’t interested in prosecuting corporations any more” was warranted and made the odd statement that “under the Obama Administration” [the same company] might have received a deferred-prosecution agreement or some amount of penalties” (ignoring of course that the Obama Justice Department invented this form of resolving an FCPA enforcement action and used it five times.”
As highlighted in this post, recently the Biden Justice Department released a so-called declination with disgorgement.
Thus far, I haven’t noticed any outrage.
But then again lots of FCPA commentary 2017-2021 wasn’t necessarily about the law or policy, but about a single person and for this reason some FCPA commentators lost credibility.
As highlighted in this prior post, in late 2016 the DOJ and SEC brought a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company with shares traded on the NYSE in which Odebrecht owned a majority of voting shares). While the principal focus of the DOJ’s action (and the exclusive focus of the SEC action) concerned conduct in Brazil the DOJ action also alleges improper payments in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.
Recently, the DOJ announced that that Carlos Ramon Polit Faggioni (Polit) made an initial court appearance in Florida “for allegedly engaging in a scheme to use the U.S. financial system to launder money to promote and conceal an illegal bribery scheme in Ecuador.” As stated in the DOJ release:
“According to the March 24 indictment unsealed …, between approximately 2010 and 2016, Carlos Ramon Polit Faggioni (Polit), allegedly solicited and received over $10 million in bribe payments from Odebrecht S.A., the Brazil-based construction conglomerate, in exchange for using his official position as Comptroller General of Ecuador to influence official actions by the comptroller’s office in order to benefit Odebrecht and its business in Ecuador. Additionally, Polit is alleged to have received a bribe from an Ecuadorian businessman in or around 2015 in exchange for assisting the businessman and his company in connection with certain contracts from the state-owned insurance company of Ecuador.”
For the People
As highlighted in this prior post, in addition to a net $17.7 million FCPA enforcement action against Amec Foster Wheeler and John Wood Group concerning conduct in Brazil, the entities also resolved a £103 Million enforcement action brought the Serious Fraud Office in the United Kingdom. The conduct involved Brazil as well as conduct in Nigeria, Saudi Arabia, Malaysia, and India.
Pursuant to the SFO DPA, the resolution included the “payment of compensation in the amount of £210,610.00 in order to provide suitable recompense to the citizens of the Federal Republic of Nigeria for the criminality reflected as Count 2 on the Indictment and committed in that jurisdiction.”
Recently the SFO announced that U.K. and Nigerian government representatives signed a Memorandum of Understanding regarding the compensation. According to the SFO release:
“The Compensation will be used by the Federal Government of Nigeria exclusively for the purpose of financing segments of the following infrastructure projects that were approved by the Nigerian National Assembly under the 2020 Appropriation Act, and procured and approved by the Nigerian Federal Executive Council in accordance with Nigeria’s Bureau for Public Procurement Act, 2007 (“the Projects”):
- The Lagos to Ibadan Expressway
- The Abuja to Kano Road
- The Second Niger Bridge”