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Survey Says

[Note:  this [1] previous post concerning the 11th Circuit “foreign official” oral argument has been updated to include a link to the audio recording of the arguments]

Previous posts (here [2] and here [3]) have highlighted survey data collected – anonymously –  from students in my FCPA Class [4] at Southern Illinois University School of Law.

This third set of survey responses touch upon the following issues:  exploring certain reasons for the general increase in FCPA enforcement and the FCPA’s long tentacles (i.e. how actual FCPA enforcement actions brought by the enforcement agencies are often just one consequence of FCPA scrutiny or enforcement in this new era).

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FCPA enforcement has generally increased during the past 7-10 years.  Do you believe that the following reasons have merit in terms of a possible explanation for the general increase in FCPA enforcement?

FCPA enforcement has become lucrative for the government – in the views of some – a “cash cow”

A.     Yes, this reason has merit = 83%

B.     No, this reason does not have merit = 17%

FCPA Inc. participants, who often serve as gatekeepers to FCPA enforcement actions and scrutiny, have a vested business interest in there being more FCPA enforcement and scrutiny?

A.    Yes, this reason has merit = 94%

B.    No, this reason does not have merit = 6%

Do you believe FCPA Inc. marketing is often “fear-based” and a bit “over-the-top”?

A.    No, FCPA Inc. is just trying to sell its FCPA services and products the best they can = 28%

B.    Yes, FCPA Inc. often portrays a false reality in trying to sell its FCPA services and products = 72%

The typical career path of a DOJ or SEC enforcement attorney, after enforcing the FCPA, is to leave government service for the private sector to provide FCPA investigative and compliance services to business organizations subject to the FCPA enforcement climate they helped create.  This typical career path:

A.    Concerns me and the issue ought to be addressed to a greater extent that it currently is = 61%

B.    Does not concern me = 39%

With increasing frequency, FCPA enforcement actions are followed by foreign law enforcement actions or investigations regarding the same core conduct at issue in the FCPA enforcement action.  These “tag-along” or “carbon copy” prosecutions are:

A.    Unfair to the company and its shareholders who end up paying twice for the same alleged misconduct = 33%

B.    A consequence of doing business in multiple jurisdictions, and thus not unfair to the company and its shareholders = 67%

Article 5 of the OECD Convention (of which the U.S. and approximately 40 other countries are a party to) states that when “more than one Party has jurisdiction over an alleged offense … the Parties shall … consult with a view to determining the most appropriate jurisdiction for prosecution.”  Which government has a greater and more direct interest in the conduct at issue, and is thus the “most appropriate jurisdiction for prosecution”?

A.   The foreign gov’t whose “officials” were allegedly corrupted and/or where the bulk of alleged conduct actually took place = 71%

B.   The U.S. government because the company making the alleged payments is subject to the FCPA’s jurisdiction = 29%

Do you believe that enforcement competition (i.e. the notion that multiple sovereigns may seek to bring an enforcement action concerning the same core conduct) is a problem in this new era of bribery enforcement?

A.   Yes = 83%

B.   No = 17%

If you answered “yes” to the above question, what is the best remedy?

A.   A single, harmonized enforcement system = 27%

B.   Greater adherence by all OECD member countries, including the U.S., to Article 5 of the OECD Convention = 73%

With increasing frequency, instances of FCPA scrutiny or enforcement are quickly followed by civil causes of action such as derivative claims or securities fraud claims brought by plaintiffs’ lawyers representing company shareholders.  Excluding rare situations in which a company’s FCPA scrutiny or liability is the result of board of director or executive officer conduct, such civil causes of action

A.   Have merit and provide shareholders the ability to recover for harm suffered as a result of the company’s FCPA scrutiny  or liability  = 28%

B.   Lack merit and represent plaintiffs’ lawyers desire to feed-off this new era of FCPA enforcement = 72%