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Friday Roundup

Efforts to influence the upcoming guidance, a stiff FCPA-related sentence, Representatives Cummings and Waxman think they are on to something, and thumbs up – it’s all here in the Friday roundup.


Earlier this week, Global Financial Integrity, Open Society Foundations, and others released this [1] letter to the DOJ and SEC concerning upcoming FCPA guidance.  The letter addresses “foreign official,” a compliance defense, voluntary disclosure, declination decisions, parent-subsidiary liability, successor liability, de minimis gifts and hospitality, and mens rea and corporate criminal liability.

As to “foreign official” the letter states “that ownership of companies around the world, including in the U.S., is impossible to determine independently” and that “the staff of a U.S. company is not likely to be able to independently verify the direct and indirect ownership of foreign companies.”  The letter also states, as to control of an instrumentality by a foreign government, that control can be conferred, among other ways, by “unspoken custom.”

Should one laugh or cry when reading such statements concerning a key element of the most important U.S. law governing international business transactions?  Perhaps the groups don’t care.  After all, as noted here [2], some of the groups have previously stated as follows regarding “foreign official” – “The U.S. Chamber is promoting the creation of a definition of “foreign official” so that companies have greater legal certainty. Greater certainty of what? Greater certainty of who they are permitted to bribe and who they are not permitted to bribe.  […]  In short, defining the term “foreign official” would underscore the idea that it is OK to bribe certain people and not others, a principle the United States surely does not want to promulgate.”

Duperval Sentenced

Earlier this week, the DOJ announced (here [3]) that “Jean Rene Duperval, a former director of international relations for Telecommunications D’Haiti S.A.M. (Haiti Teleco), a Haitian state-owned telecommunications company, was sentenced [by U.S. District Court Judge Jose Martinez in the Southern District of Florida] to nine years in prison for his role in a scheme to launder bribes paid to him by two Miami-based telecommunications companies.”  The stiff sentence continues the trend of the Southern District of Florida (and Judge Martinez in particular) handing out the toughest FCPA or FCPA-related sentences in the country.

As noted in the release,  Duperval was convicted in March 2012 of two counts of conspiracy to commit money laundering and 19 counts of money laundering. According to the release, “Judge Martinez also ordered Duperval to forfeit $497,331.”  Assistant Attorney General Lanny Breuer stated as follows.  “Mr. Duperval took bribes in exchange for giving companies an unfair and illegal advantage in the marketplace, and then tried to hide these illicit transactions behind the cloak of shell corporations and fake invoices.  Just as we prosecute corrupt businesspeople under the FCPA, we will hold accountable corrupt foreign officials when they seek to launder the proceeds of that bribery through the U.S. financial system.  Today’s nine-year prison sentence sends a strong message to foreign officials and others who would facilitate foreign corruption that they will face serious consequences.”

As noted in this [4] prior post, the Haiti Teleco case (minus the manufactured and now former Africa Sting case) is the largest in FCPA history in terms of defendants charged – 13.  The prior post provides a summary of all the enforcement actions.

The Latest FCPA Reform Volley

If your third cousin received a speeding ticket years ago does this prohibit you from forever seeking reform of speed limit laws?  Probably not the best analogy, but Representatives Elijah Cummings and Henry Waxman seem to think so.  As noted in this [5] previous post, Cummings (Ranking Member of the House Committee on Oversight and Government Reform) and Waxman (Ranking Member of the House Committee on Energy and Commerce) sent letters to the Chairman of the Board of Directors of the Retail Industry Leaders Association and the President of the U.S. Chamber of Commerce stating as follows.  “We are concerned about the role that Wal-Mart officials may have played in the Chamber’s Institute for Legal Reform (“ILR”).  It would appear to be a conflict of interest for Wal-Mart officials to advise on ways to weaken the Foreign Corrupt Practices Act at a time when the leadership of the company was apparently aware of corporate conduct that may have violated the law.”

Earlier this week, Representatives Cummings and Waxman again put pen to paper and sent this [6] letter to the President of the U.S. Chamber of Commerce stating as follows.  “A new analysis by our staff reveals that Wal-Mart is not the only company represented on the ILR’s board that has faced allegations that it violated the Foreign Corrupt Practices Act. Our review of ILR’s tax filings from 2007 to 20 10, member companies’ filings with the U.S. Securities and Exchange Commission (SEC), and other documents reveals that 14 out of 55 ILR board members-almost one in four- were affiliated with companies that were reportedly under investigation for violations or had settled allegations that they violated the Foreign Corrupt Practices Act.”  See here [7] for more.

Closing with the analogy, perhaps Representatives Cummings and Waxman should instead inquire about how the speeding laws are being enforced – or at the very least – read this [8] prior post titled “The Sun Rose, A Dog Barked, And A Company Disclosed FCPA Scrutiny.”

Thumbs Up

To Howard Sklar for this [9] recent post on his Open Air Blog.  I agree with the general thrust of Howard’s argument.  So did Congress when it passed the FCPA.  For that reason, and here is where I disagree with Howard, the issues he identifies are legal issues, not merely policy issues.


A good weekend to all.