“The [DOJ] focuses its enforcement actions where the allegations of criminal conduct are clear, egregious and fall squarely within the FCPA.”
“… No one has raised a single example of a prosecution or enforcement action which was remotely close to the line.”
“The DOJ is not prosecuting companies where the entity engaged in something less than willful criminal conduct.”
The above statements were made by Greg Andres (DOJ) at the June 2011 House FCPA hearing. See here for the prior post on the hearing. As discussed in this prior post, in certain respects Andres has been the DOJ’s voice on FCPA enforcement and reform issues (he also testified on behalf of the DOJ at the November 2010 Senate FCPA Hearing). Yesterday, Peter Lattman of the New York Times reported here that Andres is set to join Davis Polk & Wardwell.
In December 2011, Aon Corporation resolved an FCPA enforcement action (see here for the prior post). The DOJ component of the enforcement action involved a $1.8 million fine via a non-prosecution agreement. The NPA (here) stated that the DOJ would not criminally prosecute Aon Corporation or its subsidiaries for any crimes “related to Aon’s knowing violation of the anti-bribery, books and records, and internal control provisions of the FCPA … arising from and related to the making of improper payments to government officials in Costa Rica in order to assist Aon in obtaining and retaining business …”.
The conduct at issue involved Aon Limited (a subsidiary of Aon Corporation based in and organized under the laws of the U.K.) and focused on Costa Rica. There is no fact, suggestion or implication in the NPA that Aon knew of, participated in, or authorized the conduct at issue. The only factual mention of Aon in the NPA is that Aon Limited “reported financially through a series of intermediary entities into its U.S.-based issuer parent, Aon Corporation” and elsewhere that “the books and records of Aon Limited were consolidated into those of Aon Corporation.”
Aon Limited’s conduct focused on its relationship with Costa Rica’s state-owned insurance company (INS) and a training and education fund (established by a company Aon Limited acquired in 1997 from its brokerage commissions) to sponsor training and education trips for INS officials. Aon Limited also contributed to the fund by allocating a portion of its brokerage commissions to the fund. According to the NPA, Aon Limited also managed a second training account that was funded by premiums paid by INS.
The NPA states that Aon Limited used these funds to pay for third-party services during education and training trips and that “these services often included travel related expenses, such as airfare and hotel accommodations, as well as conference fees, meals, and other related expenses for INS officials and their relatives.”
The NPA states that many of these trips included a business-related component, but that “a significant portion of the funds expended on the trips were used for the personal benefit of the officials and their wives.” The NPA further states that a “substantial number of the trips” were in connection with conferences and seminars, but in tourist destinations.
That, in terms of a general summary, is what the DOJ’s FCPA enforcement action against Aon Corporation was all about.
Was it close to the line?
During the June 2011 House FCPA Hearing, Representative John Conyers (D-MI) asked for examples of overcriminalization of the FCPA.” A summer reading list for Representative Conyers was discussed here and the Aon Corporation enforcement action ought to be included as well.