The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2012, as well as notable circumstances that significantly skewed enforcement data statistics for a particular year. (The below data was assembled using the “core” approach – see this prior post for an explanation).
Corporate FCPA Enforcement Actions (2007-2012)
|
Year |
Enforcement Actions |
Settlement Amounts |
Of Note |
|
2007 |
15 |
$149 million |
Six enforcement actions involved Iraq Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount. |
|
2008 |
10 |
$885 million |
The $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount. |
|
2009 |
11 |
$645 million |
The $579 million KBR / Halliburton Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount. |
|
2010 |
21 |
$1.4 billion |
Six enforcement actions, all resolved on the same day, centered on various oil and gas companies use Panalpina in Nigeria. Panalpina also resolved an enforcement action on the same day.Two enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island conduct. In other words, there were 14 unique corporate enforcement actions in 2010. Of further note, the two Bonny Island enforcement actions, Technip($338 million) and Eni/Snamprogetti ($365 million) comprised approximately 50% of the $1.4 billion amount. |
|
2011 |
16 |
$503 million |
The $219 million JGC Corp. Bonny Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount |
|
2012 |
12
|
$260 million |
None that significantly skewed the statistics. |
| TOTAL: 85 | TOTAL: $3.9 billion |
As demonstrated by the above chart, 2010 was the apex of FCPA enforcement, both in terms of the number of enforcement actions and settlement amounts. FCPA enforcement in 2012 was less than in 2011, and FCPA enforcement in 2011 was less than in 2010.
Industry participants have offered various reasons for the decrease in FCPA enforcement in 2012 – all speculative and not empirically based.
What is not speculative and what is empirically based is an analysis of how just a few unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011 and how these events place 2012 FCPA enforcement data in a proper context.
The events, as suggested by the above chart, are the following: (i) publication in 2005 of the so-called Volcker Report on the United Nations Iraq Oil for Food Program which served as a ready-made list of enforcement actions; (ii) in 2003 Georges Krammer, a former top official at Technip, shared information with French investigators concerning a $6 billion dollar project at Bonny Island, Nigeria; and (iii) several oil and gas companies utilized the services of Panalpina.
As indicated in the below charts, these unique historical events had a significant impact on FCPA enforcement data between 2007 and 2011.
Corporate FCPA Enforcement Actions Based on Iraq Oil For Food Conduct (2007-2011)
|
Enforcement Actions |
Total Enforcement Action Percentage
|
Settlement Amounts |
Total Settlement Amount Percentage |
|
14 |
19% |
$267 million |
7% |
Corporate Bonny Island, Nigeria FCPA Enforcement Actions (2007-2011)
|
Enforcement Actions |
Total Enforcement Action Percentage
|
Settlement Amounts |
Total Settlement Amount Percentage |
|
4 |
5% |
$1.5 billion |
41% |
Corporate Panalpina Related FCPA Enforcement Actions (2007-2011)
|
Enforcement Actions |
Total Enforcement Action Percentage
|
Settlement Amounts |
Total Settlement Amount Percentage |
|
8 |
11% |
$262 million |
7% |
As demonstrated by the above charts, the combined effect of just three unique historical events – Iraq Oil for Food, Bonny Island conduct, and use of Panalpina – had a significant impact on FCPA enforcement data between 2007 and 2011. These events served as the foundation for 35% of all corporate enforcement actions between 2007-2011 and resulted in 55% of the settlement amounts in corporate enforcement actions between 2007-2011.
Adding just the 2008 Siemens enforcement action to the settlement amount calculation, results in just four unique historical events accounting for 77% of settlement amounts in corporate enforcement actions between 2007-2011.
While the January 2012 FCPA enforcement action against Marubeni did involve Bonny Island conduct, the unique events identified above have run their course. Recognizing these events and how they impacted FCPA enforcement data is important to understanding why FCPA enforcement has declined in recent years.
Even though FCPA enforcement has declined in recent years, unique events giving rise to FCPA enforcement actions have remained relatively constant between 2007 and 2012. In 2007, corporate FCPA enforcement actions were the result of 15 unique events. In 2008, corporate FCPA enforcement actions were the result of 10 unique events. In 2009, corporate FCPA enforcement actions were the result of 11 unique events. In 2010, corporate FCPA enforcement actions were the result of 14 unique events. In 2011, corporate FCPA enforcement actions were the result of 16 unique events. In 2012, corporate FCPA enforcement actions were the result of 12 unique events.
