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“The FCPA’s Big Lesson”

[Stay tuned for analysis of the written decision and order expected today from Judge Howard Matz (C.D. of Cal.) throwing out the trial convictions of Lindsey Manufacturing, Keith Lindsey and Steven Lee and dismissing the indictment with prejudice.  For coverage of yesterday’s hearing and Judge Matz’s tentative order see here and here]


Richard Cassin, the pioneer of the FCPA blogosphere, writes nearly every day – sometimes more than once.  Thus, picking Cassin’s greatest hit is no easy chore.  But in my mind it is easy, this piece (“The FCPA’s Big Lesson”) written by Cassin one year ago (not on his FCPA Blog, but for Ethisphere) is Cassin’s greatest hit.

He begins as follows. “The FCPA is a great statute. It stands for the rule of law and the noble idea that public bribery, no matter how common or petty, is never a victimless crime, no matter where it happens.  But the FCPA has some flaws too, and they’re too big to ignore.”  It is worth a read, and even though 2011 will go down as the most active year of litigation in the FCPA’s history, Cassin’s points remain valid.

What does Cassin think today?  Below he provides some thoughts.


“Writing the Ethisphere article gave me a chance to blow off steam about some aspects of FCPA enforcement that appeared inconsistent with the way America’s criminal justice system is supposed to work. That Prof Koehler noticed the article and judged it to be a ‘greatest hit’ is a special bonus.

Do the flaws I talked about still exist? Yes they do.  During the year just past — and continuing a two-decade trend — no public company defended itself against FCPA charges at trial. Why not? Because corporations are automatically guilty if an employee is convicted of a crime related to his or her job. Why fight when U.S. law makes it impossible to win? Denying corporations the right to defend themselves when they’re accused of crimes is wrong. But giving them a ‘good faith’ defense to FCPA charges would encourage more compliance and return the scales of justice to where they should be. 

Again there were no criminal prosecutions against executives from ‘issuers’ that settled enforcement actions. Although a dozen ‘issuers’  resolved FCPA cases during the past year, none of their  people have been indicted. Two public company executives — Lessen Change of Watts Water Technologies and Paul Jennings of Innospec — were dinged by the SEC with civil penalties. But the DOJ hasn’t moved against anyone from a settling ‘issuer.’ Does that mean FCPA enforcement is tainted by checkbook justice? It’s a question that won’t go away. 

On the other hand, I’m still proud of the FCPA. Even flawed as it is (and what law isn’t flawed?), the FCPA still shows America at its best. Our country’s leadership around the world may be wobbly in some things these days. But that’s not true for anti-corruption enforcement.”

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