This prior post highlighted a recent memo issued by new Attorney General Pam Bondi titled “Total Elimination of Cartels and Transnational Criminal Organizations.”
The memo contained a section titled “Removing Bureaucratic Impediments to Aggressive Prosecutions” which addresses five areas of law to be “implemented for a period of 90 days and renewed or made permanent thereafter as deemed appropriate by the Office of the Attorney General and the Office of the Deputy Attorney General.”
Regarding the FCPA, the memo stated:
“The Criminal Division’s Foreign Corrupt Practices Act Unit shall prioritize investigations related to foreign bribery that facilitates the criminal operations of Cartels and TCOs, and shift focus away from investigations and cases that do not involve such a connection. Examples of such cases include bribery of foreign officials to facilitate human smuggling and the trafficking of narcotics and firearms.
The requirements in Justice Manual § 9-4 7.110 requiring authorization by the Criminal Division for an investigation or prosecution of a case under the Foreign Corrupt Practices Act and Foreign Extortion Prevention Act, as well as the requirement that such investigations and prosecutions be conducted by trial attorneys of the Fraud Section, are suspended for all matters relating to foreign bribery associated with Cartels and TCOs. U.S. Attorney’s Offices shall provide the Foreign Corrupt Practices Act Unit with 24 hours’ advance notice of the intention to seek charges and make available to the Unit upon request any existing memoranda relating to the contemplated charges. No new or additional paperwork will be required by the Foreign Corrupt Practices Act Unit in connection with these notices and consultations.”
Since release of the memo, there has been a flurry of commentary some of which I find curious and misleading.
This Wall Street Journal headline states in part “U.S. to Dial Back Crackdown on Foreign Corruption”
This law firm alert is titled “Newly Confirmed AG Pam Bondi Issues Directive Limiting Scope of FCPA Enforcement.”
This headline states: “New AG Signals FCPA Retreat.”
To review, the structure of the memo includes the FCPA as one of five areas of law under the heading “Removing Bureaucratic Impediments to Aggressive Prosecutions” to be “implemented for a period of 90 days and renewed or made permanent thereafter as deemed appropriate by the Office of the Attorney General and the Office of the Deputy Attorney General.”
I certainly don’t view a temporary reprioritization of investigative and prosecutorial resources to mean that the DOJ is going to ignore other things and most certainly not to mean that the DOJ is “dialing back” FCPA enforcement, “limiting [the] scope of FCPA enforcement” or that this memo signals an “FCPA retreat”.
For instance, most corporate FCPA enforcement actions in any given year tend to be the result of voluntary disclosures or foreign law enforcement investigations. Will this memo negatively impact the inflow of these matters to DOJ? Will DOJ “get” these matters and now say no thanks we are focused on other things? My opinion on both is no. But time of course will tell.
Bigger picture, I struggle to interpret what this memo even means substantively.
For there to be a violation of the FCPA’s anti-bribery provisions there needs to be a foreign official defined in the FCPA to mean “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.”
While one could certainly create a hypothetical in which a “foreign official” was involved in the “facilitation of human smuggling and the trafficking of narcotics and firearms” are “foreign officials” really the type of individuals involved in these activities?
My general understanding is cartels and transnational criminal organizations – the title of Bondi’s memo – are engaged in such activities. Does the DOJ believe that members of those cartels and transnational criminal organizations are “foreign officials?”
It is also worth considering – how many FCPA enforcement actions in nearly 50 years have involved “human smuggling and the trafficking of narcotics and firearms.” I am hard pressed to think of one. Yes, there have been a few enforcement actions in the military products, law enforcement products, gun industry, but these enforcement actions seemingly involved “legitimate” sales of products to government agencies, departments, not “trafficking.”
Over the years, the DOJ has issued many memos which touch upon FCPA enforcement.
For instance, in 2018 the Attorney General released a memo regarding a so-called China Initiative. The initiative had ten components including the following: “identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.”
Likewise, in 2021, the Attorney General in the Biden Administration announced so-called “Joint Task Force Alpha” “to enhance U.S. enforcement efforts against the most prolific and dangerous human smuggling and trafficking groups operating in Mexico and the Northern Triangle countries of Guatemala, El Salvador, and Honduras.” (See here for the prior post). The release further stated that “Joint Task Force Alpha will also complement the Justice Department’s efforts to fight corruption. The Justice Department will increase its focus on investigations, prosecutions, and asset recoveries relating to corruption in Northern Triangle countries through its Foreign Corrupt Practices Act enforcement program, counternarcotics prosecutions, and Kleptocracy Asset Recovery Initiative.”
Was anyone saying that these prior DOJ initiatives with an FCPA component represented a “dialing back” of FCPA enforcement, “limited the scope of FCPA enforcement,” or signaled an “FCPA retreat”?
I don’t recall any.
Substantively, and with the passage of time, did any of these initiatives have any impact on FCPA enforcement – positively or negatively?
None that I am aware of.
I have been following FCPA enforcement and related developments as close as likely anyone on the planet for the last 20 years.
My reaction to many DOJ/SEC “developments,” “policy changes, etc” is to take a deep breath and carry on because time usually demonstrates that the “developments” or “policy changes” will have minimal to no apparent impact on FCPA enforcement.
