A meaningful amount of “stuff” written about the Foreign Corrupt Practices Act – including by “major” media sources or so-called “experts” – completely lacks context.
With context lacking, many things may seem new (and thus controversial) when in reality the development is hardly new.
With the DOJ’s recent release of a policy memo titled “Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act,” this post rewinds the clock back to 1983 to highlight certain articles about a prior era of the FCPA.
Justice Department Cuts Back on Foreign Bribery Cases (Feb. 22, 1983)
Top officials have quietly eliminated the multinational fraud branch, which once was reviewing hundreds of cases for possible prosecution. Now, only three prosecutors work full time on foreign payoff cases; five others are assigned part time. The department has only 14 cases open, and no more than nine are considered to have any prospect of resulting in criminal charges.
Robert Ogren, head of the Fraud Section that oversees the cases, says there “is no de-emphasis” on enforcement of the five-year old Foreign Corrupt Practices Act, which forbids overseas bribery. By closing flimsy cases, he says he can concentrate on investigations that might result in convictions.
While the Department under the Reagan administration is clearly changing its focus, nobody is suggesting there’s a political motive. Ogren is a career prosecutors who previously served as the Principal Assistant U.S. Attorney for the District of Columbia. The administration’s official position is that it will enforce the bribery law, although it wants it changed to remove what some businesses call unintended ambiguities that inhibit trade.
Indeed, since Ogren took over the effort last March, the Justice Department has secured its first criminal conviction of an individual under the Act. Two men were convicted and 10 others indicted for allegedly paying nearly $10 million in bribes to top officials of Mexico’s state-owned monopoly.
Ogren increased the emphasis on fraud involving military supplies, food stamps and drug money. And without announcing it, he abolished the multinational branch and put many of its lawyers to work on other matters. The previous attention to bribery cases, he says,” really drained our capacity to go after this other stuff” in the international arena, such as offshore banking scams and drug-related money laundering schemes. Another reason for redirecting efforts, Ogren says, is that the Justice Department receives few complaints or tips each year about foreign payoffs.
In connection with the DOJ’s recent release of a policy memo titled “Guidelines for Investigations and Enforcement of the Foreign Corrupt Practices Act,” it was reported that “the department has closed nearly half of its foreign-bribery investigations to align with new guidelines …”.
Some seemingly had a “come apart.”
However, the DOJ has long closed FCPA investigations for a variety of reasons as highlighted by the below article.
Justice Department Document Gives Data on Bribery Probes (Aug. 8, 1983)
“Justice Department document provides a rare glimpse of allegations the agency has received of bribes by American corporations overseas.
The document, released by the Department at a lawyers’ seminar, contains summaries of foreign bribery investigations made by the agency since September 1981. Though couched by general terms, the summaries include accounts of reported bribe attempts that the Department found implausible or wasn’t able to confirm or that didn’t seem to fit the scope of activities barred by the 1977 Foreign Corrupt Practices Act.
The summaries report unproven allegations of American companies making – or planning to make – bribes to three Prime Minister, two foreign Presidents and several government ministry heads. The alleged bribes, mostly in Africa, the Middle East and Latin America, took the form of cash, guns, an automobile and, in one case, “sexual favors.”
The documents lists a variety of reasons that investigations were dropped. But it raises questions about whether the Department was ineffective or too selective in its investigating.
The report was written for a House Commerce Subcommittee headed by Rep. Timothy Wirth (D-Colo) that is considering proposals to amend the anti-bribery law. It was released by the Department at last week’s American Bar Association Convention. It describes 20 bribery allegations the Department is pursuing and about 50 cases it has investigated and dropped since September 1981.
Only the closed cases are described in individual detail. In one, a major U.S. corporation was alleged to have “made arrangement” to make a payment to the son of a President of “a far Eastern Country” to get a $150 million contract there. The company, which the department didn’t name, “became aware of the Department’s investigation and decided to forgo its bid on the contract,” the report said, and the case was dropped.
But in many instances, the summary indicates, allegations had some substance but investigations were dropped. In some cases, the Department didn’t believe the alleged transactions would be illegal under the 1977 law. In others, prosecution was carried out under other statutes, or the agency decided the alleged acts weren’t significant or lacked sufficient evidence to prosecute.”
See here for the original source document.
