Deferred Prosecution Agreements

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Former Attorney General Alberto Gonzales Criticizes Various Aspects Of DOJ FCPA Enforcement

Thursday, April 4th, 2013

Yesterday at the Dow Jones / Wall Street Journal Global Compliance Symposium, former Attorney General Alberto Gonzales openly criticized various aspects of DOJ Foreign Corrupt Practices Act enforcement.

During a featured interview at the event with David Wessel of the Wall Street Journal, Gonzales said that the DOJ could ”give more guidance and transparency” concerning issues relevant to an FCPA enforcement action. Gonzales mentioned the FCPA Guidance, but stated that it represents no change in policy and again reiterated that “more transparency” is important because he does not see actual reform of the FCPA statute coming from this Congress or this administration.

Gonzales “salute[d] the efforts of business groups” post-FCPA Guidance who have asked for additional clarification and guidance concerning the FCPA and FCPA enforcement (see here for the prior post) and said that the FCPA Guidance “does not end the need for additional discussion” regarding these topics and the enforcement approach of the agencies.

Gonzales also had pointed criticisms for DOJ non-prosecution and deferred prosecution agreements. Asked by Wessel whether the original motivations Congress had in passing the FCPA are being served by the current enforcement environment or whether the current enforcement environment has “lost sight of the [FCPA's] end point” Gonzales said that it is “hard to tell quite frankly” because many FCPA enforcement actions are resolved via NPA and DPAs and that these resolution vehicles do not necessarily reflect instances of companies violating the FCPA, but rather companies feels compelled to agree to the agreements.

Equally problematic, Gonzales said as to NPAs and DPAs, is that enforcement actions resolved via these vehicles mean that “legitimate wrongdoing is not being prosecuted as it should.” Gonzales said it is “easy, much easier quite frankly” for the DOJ to resolve FCPA inquiries with NPAs and DPAs, that such resolution vehicles have “less of a toll” on the DOJ’s budget and that such agreements “provide revenue” to the DOJ. It is all “unfortunate” Gonzales stated. [For additional reading on this issue, see my article "The Facade of FCPA Enforcement" and numerous prior posts - including here and here - concerning NPAs and DPAs].

Gonzales further observed that the DOJ appears more focused on FCPA enforcement numbers, how successful it is being, and the dollars it receives from FCPA enforcement actions, rather than achieving the “true objective [of the FCPA] which is to discourage bribery of foreign officials.”

Gonzales also joined the growing chorus of those who have called for the DOJ to release more specific information concerning its so-called declination decisions, and also spoke out in favor, as he has in the past (see here for the prior post) for “common-sense reform” such as compliance defense

So I ask the question yet again (see here for the prior post), – how many former high-ranking DOJ officials and/or former DOJ FCPA enforcement attorneys does it take before the current DOJ realizes that its FCPA enforcement policies and procedures are, in certain cases, broken?

The “Muzzle” Clause

Tuesday, March 26th, 2013

In December 2012, the DOJ announced here as follows.

“Standard Chartered Bank, a financial institution headquartered in London, has agreed to forfeit $227 million to the Justice Department for conspiring to violate the International Emergency Economic Powers Act (IEEPA). The bank has agreed to the forfeiture as part of a deferred prosecution agreement with the Justice Department and a deferred prosecution agreement with the New York County District Attorney’s Office for violating New York state laws by illegally moving millions of dollars through the U.S. financial system on behalf of sanctioned Iranian, Sudanese, Libyan and Burmese entities. The bank has also entered into settlement agreements with the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Board of Governors of the Federal Reserve System.”

As indicated in the above release, Standard Chartered agreed to resolve its potential exposure via a deferred prosecution agreement.

Like DPAs in the Foreign Corrupt Practices Act context, the Standard Chartered DPA required the company to accept responsiblity for the conduct set forth in the agreement.

Like DPAs in the FCPA context, the Standard Chartered DPA contained a “public statements” clause under which the company was prohibited, directly or indirectly through others (such as attorneys, consultants, etc.), from making “any public statements contradicting the acceptance of responsibility.” If the company, directly or indirectly, made such public statements, it would constitute, subject to cure rights, “a willful and material breach” of the DPA thereby subjecting the company to criminal prosecution. A further provision in the ”public statements” clause was that the determination of whether a public statement contradicts acceptance of responsibility “shall be in the sole discretion” of the DOJ. A further provision in the clause was that the company shall not issue a press release or hold a press conference concerning the facts at issue in the DPA without first consulting with the DOJ “to determine (a) whether the text of the release or proposed statements at the press conference are true and accurate with respect to matters between the United States and [the company]; and (b) whether the United States has no objection to the release.”

Portions of the Standard Chartered “public statements” clause were recently triggered. (See here from the Wall Street Journal and here from the U.K. Guardian).

In short, during a recent earnings conference call with investors, Standard Chartered Chairman John Peace was asked a question ”concerning individual employee conduct and compensation” following the DPA. Peace responded, when asked about bonuses for executives, as follows. ”We had no wilful act to avoid sanctions; you know, mistakes are made – clerical errors – and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made.”

According to the Wall Street Journal article, prosecutors “pounced when they heard Mr. Peace’s comments” and demanded a copy of the conference call transcript. According to the article, “Mr. Peace and other top executives were [soon] in Washington to [apologize] before a room full of top prosecutors at the U.S. Justice Department, which has threatened to bring criminal charges if Mr. Peace didn’t recant.” According to the article, “Standard Chartered officials and the U.S. prosecutors spent more than a week negotiating possible wording of the bank’s retraction.”

On March 21st, Mr. Peace, through the company, issued this statement which read as follows.

“I, together with Chief Executive Officer Peter Sands and Group Finance Director Richard Meddings, representing Standard Chartered Bank (the “Group”), held a press conference where certain questions were asked concerning individual employee conduct and compensation in light of the deferred prosecution agreements made with the US Department of Justice and the New York County District Attorney’s Office in December 2012. During that press conference, which took place via phone, I made certain statements that I very much regret and that were at best inaccurate.

In particular, I made the following statements in reference to a question regarding the reduction of bonuses for [company] executives: We had no willful act to avoid sanctions; you know, mistakes are made – clerical errors – and we talked about last year a number of transactions which clearly were clerical errors or mistakes that were made…

My statement that [the company] ”had no willful act to avoid sanctions” was wrong, and directly contradicts [the company's] acceptance of responsibility in the deferred prosecution agreement and accompanying factual statement.

Standard Chartered Bank, together with me, Mr. Peter Sands and Mr. Richard Meddings, who jointly hosted the press conference, retract the comment I made as both legally and factually incorrect. To be clear, Standard Chartered Bank unequivocally acknowledges and accepts responsibility, on behalf of the Bank and its employees, for past knowing and willful criminal conduct in violating US economic sanctions laws and regulations, and related New York criminal laws, as set out in the deferred prosecution agreement. I, Mr. Sands, Mr. Meddings, and Standard Chartered Bank apologize for the statements I made to the contrary.”

I’ve written before about what I will call the “muzzle” clause in FCPA DPAs.

In response to an FCPA commentator who believed that NPAs and DPAs have never been used to resolve cases that do not actually represent provable FCPA violations - because the commentator had never heard any complaint “from any practitioners, on or off the record, in public or in private” of this being the case – I noted that there was a simple explanation for this. I then proceeded to analyze a “muzzle” clause in an FCPA DPA. See here for the prior post.

Greater scrutiny is needed of “muzzle” clauses.

First, the DOJ can use its leverage and its ability to bring criminal charges against a company. Second, the DOJ will can then use an NPA or DPA to insulate its version of the facts and enforcement theories from judicial scrutiny which the risk averse company will more often that not accept. Third, in the resolution agreement, the DOJ can include a “muzzle” clause prohibiting anyone associated with the company from making any statement inconsistent with the DOJ’s version of the facts or its enforcement theories. Fourth, if the DOJ believes, in its sole discretion, that a public statement has been made contradicting its version of the facts or its enforcement theories, the DOJ can “pounce” and threaten to bring criminal charges.

Is this an effective system of justice?

Is this consistent with the rule of law (recognizing that one accepted factor in analyzing the rule of law is distribution of authority in a manner that ensures that no single organ of government has the practical ability to exercise unchecked power)?

Professor Ellen Podgor has rightfully asked on the her White Collar Crime Prof Blog (see here) whether the government can include such clauses in resolution agreements without infringing on First Amendment rights.

Reacting to the August 2012 DOJ enfocement action against Gibson Guitar resolved with a DPA (with a “muzzle” clause), Harvey Silverglate(author of “Three Felonies a Day: How the Feds Target the Innocent”) wrote in this Wall Street Journal opinion piece as follows.

“Put another way, Gibson is now forbidden to tell the world the whole truth about its conduct and its reasons for settling a case it previously claimed publicly, including in an opinion piece in [the Wall Street Journal], involved no criminal conduct on its part. In exchange for agreeing to read the government’s script, Gibson regained its ability to conduct business without a federal sword of Damocles dangling over its corporate head. This naked effort by federal prosecutors to control both news and outcomes, not to mention their own reputations, does not surprise those familiar with the modern federal criminal justice system.”

As noted in this previous post, when the U.K. Serious Fraud office attempted to insert a “muzzle” clause in its Innospec resolution documents, it received a lashing from Lord Justice Thomas who stated as follows. “It would be inconceivable for a prosecutor to approve a press statement to be made by a person convicted of burglary or rape; companies who are guilty of corruption should be treated no differently to others who commit serious crimes.”

Whether in the FCPA context or otherwise, ”muzzle” clauses are in need of greater scrutiny.

Do NPAs And DPAs Deter?

Tuesday, March 12th, 2013

As highlighted below, the DOJ recently acknowledged, despite prior definitive statements by former Assistant Attorney General Lanny Breuer to the contrary, that “measuring the impact of NPAs and DPAs in deterring the bribery of foreign public officials would be a difficult task, save providing certain anecdotal and other circumstantial evidence.”

As discussed in this previous post, in September 2012 then Assistant Attorney General Lanny Breuer passionately defended the DOJ’s use of NPAs and DPAs. Among other things, Breuer boldly stated that NPAs and DPAs “have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe” and that the result of DOJ’s frequent use of such agreements “has been, unequivocally, far greater accountability for corporate wrongdoing – and a sea change in corporate compliance efforts.” Breuer further stated as follows.

“One of the reasons why deferred prosecution agreements are such a powerful tool is that, in many ways, a DPA has the same punitive, deterrent, and rehabilitative effect as a guilty plea: when a company enters into a DPA with the government, or an NPA for that matter, it almost always must acknowledge wrongdoing, agree to cooperate with the government’s investigation, pay a fine, agree to improve its compliance program, and agree to face prosecution if it fails to satisfy the terms of the agreement.”

Despite Breuer’s rhetoric, the question of whether NPAs and DPAs adequately deter future improper conduct has long been asked.

As noted in this previous post, in 2009, the Government Accountability Office (“GAO”) released a report regarding DOJ’s use of NPAs and DPAs. The GAO Report was not FCPA specific, although it does mention the FCPA as being one area where NPAs and DPAs are frequently used. The GAO Report stated as follows.

“DOJ cannot evaluate and demonstrate the extent to which DPAs and NPAs—in addition to other tools, such as prosecution—contribute to the department’s efforts to combat corporate crime because it has no measures to assess their effectiveness. Specifically, DOJ intends for these agreements to promote corporate reform; however, DOJ does not have performance measures in place to assess whether this goal has been met.”

The GAO Report concluded as follows.

“[W]hile DOJ has stated that DPAs and NPAs are useful tools for combating and deterring corporate crime, without performance measures, it will be difficult for DOJ to demonstrate that these agreements are effective at helping the department achieve this goal.

As noted in this previous post, in the 2010 OECD Phase 3 Report of U.S. FCPA enforcement, the evaluators likewise noted that the “actual deterrent effect [of NPAs and DPAs have] not been quantified.” In the Report, the evaluators sought information about the deterrent effect of DPAs and NPAs” and one of the recommendations in the Report was for the U.S. to “make public any information about the impact of NPAs and DPAs on deterring the bribery of foreign public officials.”

The DOJ recently responded to the OECD’s recommendation in its “Final Follow-Up To Phase 3 Report and Recommendations.” The DOJ response, dated December 2012, states in full, as to the NPA / DPA issues as follows.

“Scholars have recognized that quantifying deterrence is extremely difficult. This is equally true for the deterrent effect of DPAs and NPAs. Thus, as discussed at the time this recommendation was made, measuring ‘the impact of NPAs and DPAs in deterring the bribery of foreign public officials’ would be a difficult task, save providing certain anecdotal and other circumstantial evidence.

One of the best sources of anecdotal evidence demonstrating that DPAs and NPAs have a deterrent effect comes from the companies themselves. The companies against which DPAs and NPAs have been brought have often undergone dramatic changes. For instance, prior to or following the entry of DPAs or NPAs, many companies have terminated personnel, including senior managers, established new codes of conduct and compliance policies and procedures, pledged not to use third-party agents, withdrawn from bids tainted by corruption, provided new and substantial resources to compliance and audit functions within their organizations, and instituted new training regimes. These companies, through their remediation efforts under DPAs and NPAs, have often fundamentally changed how they conduct business. In addition, just like with individuals on parole or probation, the monitor provisions or self-reporting requirements of DPAs and NPAs are designed to deter future misconduct and, at the same time, ensure that companies meet their obligations. In meetings with board members, chief executive officers, chief financial officers, general counsel, and chief compliance officers, DOJ and SEC have heard directly from these senior leaders about the impact DPAs and NPAs have had on their companies for the better.

Beyond the companies themselves, DOJ and SEC have heard anecdotal stories about the deterrent effect of NPAs and DPAs on other companies and how those resolutions raise awareness of anti-corruption laws. Often those stories come from other corporate leaders who have discussed how their own practices have changed or even whole industries that have changed their behavior for the better. For example, during the course of one investigation, it was revealed that a major multinational corporation’s DPA caused another Fortune 50 company to implement an FCPA compliance program. In addition, following DPAs in different cases, companies have come forward to make voluntary disclosures of similar conduct. Many of our DPAs and NPAs are publicized extensively and scrutinized closely by the business community, the legal profession, and the compliance community, among others. The ‘lessons learned’ from these DPAs and NPAs, for example, help raise awareness of compliance risks and failures. The existence of DPAs and NPAs also encourages companies to voluntarily disclose conduct, by providing meaningful rewards to those companies, which enables DOJ and SEC to ensure further specific and general deterrence.”

Of course, what the DOJ says above as to the deterrent value of NPAs or DPAs would equally apply to actual prosecutions.

But let’s test the following statement made by the DOJ “One of the best sources of anecdotal evidence demonstrating that DPAs and NPAs have a deterrent effect comes from the companies themselves. The companies against which DPAs and NPAs have been brought have often undergone dramatic changes.”

In 2008, the DOJ announced (here) that Aibel Group Ltd. (Aibel Group) pleaded guilty to violating the antibribery provisions of the FCPA. As noted in the DOJ release, “Aibel Group admitted that it was not in compliance with a deferred prosecution agreement it had entered into with the Justice Department in February 2007 regarding the same underlying conduct.” The DOJ release further states as follows. “This is the third time since July 2004 that entities affiliated with Aibel Group have pleaded guilty to violating the FCPA.”

As this previous Wall Street Journal Corruption Currents post highlighted, Ingersoll-Rand, fresh off its exit of a DPA in 2011, soon disclosed that it found other potential violations of the FCPA. In a 2011 filing, the company stated as follows.

“We have reported to the DOJ and SEC certain matters which raise potential issues under the FCPA and other applicable anti-corruption laws, including matters which were reported during the past year. We have conducted, and continue to conduct, investigations and have had preliminary discussions with respect to these matters with the SEC and DOJ, which are ongoing.”

So the question remains, do NPAs and DPAs deter?

It turns out that not even the DOJ knows the answer.

*****

Interested in NPA and DPA issues? On May 3rd, I will be speaking at this event at the National Press Club in Washington, D.C. hosted by Corporate Crime Reporter.

DOJ Prosecution Of Individuals – Are Other Factors At Play?

Tuesday, January 29th, 2013

Yesterday’s post (here) focused on DOJ FCPA individual prosecutions and highlighted the following facts and figures.

Since 2008, the DOJ has charged 77 individuals with FCPA criminal offenses.
61% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just four cases and 77% of the individuals charged by the DOJ since 2008 have been in just seven cases.
There have been 53 corporate DOJ FCPA enforcement actions since 2008 and of the 53 corporate DOJ FCPA enforcement actions, 39 (or 74%) have not (at least yet) resulted in any DOJ charges against company employees.

These statistics should cause alarm, including at the DOJ as it has long recognized that a corporate-fine only enforcement program is not effective and does not adequately deter future FCPA violations. For instance, in 1986 John Keeney (Deputy Assistant Attorney General, Criminal Division, DOJ) submitted written responses in the context of Senate hearings concerning a bill to amend the FCPA. He stated as follows:

“If the risk of conduct in violation of the statute becomes merely monetary, the fine will simply become a cost of doing business, payable only upon being caught and in many instances, it will be only a fraction of the profit acquired from the corrupt activity. Absent the threat of incarceration, there may no longer be any compelling need to resist the urge to acquire business in any way possible.”

Likewise, in 2010 Hank Walther (Deputy Chief Fraud Section) stated that a corporate fine-only FCPA enforcement program allows companies to calculate FCPA settlements as the cost of doing business.

In my 2010 Senate FCPA testimony (here), I noted that the absence of individual FCPA charges in most corporate FCPA enforcement actions causes one to legitimately wonder whether the conduct giving rise to the corporate enforcement action was engaged in by ghosts. Others have rightly asked the “but nobody was charged” question, including perhaps most notably James Stewart in a New York Times column highlighted in this previous post.

However, as I stated in my Senate testimony, there is an equally plausible reason why no individuals have been charged in connection with many corporate FCPA enforcement actions. The reason has to do with the quality and legitimacy of the corporate enforcement action in the first place. Readers know well of the prevalence of non-prosecution and deferred prosecution agreements (NPA / DPA) in the FCPA context and how these agreements, not subject to any meaningful judicial scrutiny, are often agreed to by companies for reasons of ease and efficiency, and not necessarily because the conduct at issue violates the FCPA. For more on this dynamic, see my article “The Facade of FCPA Enforcement.” Individuals, on the other hand, face a deprivation of personal liberty, and are more likely to force the DOJ to satisfy its high burden of proof as to all FCPA elements.

In other words, perhaps the more appropriate question is not “but nobody was charged,” but rather do NPA and DPAs always represent provable FCPA violations.

I set out to test this with the following working hypothesis. Instances in which the DOJ brings actual criminal charges against a company or otherwise insists in the resolution context that the corporate entity pleads guilty to FCPA violations, represent a higher quality FCPA enforcement action (in the eyes of the DOJ) and is thus more likely to result in related FCPA criminal charges against company employees. Instances in which the DOJ resolves an FCPA enforcement action solely with an NPA or DPA, represent a lower quality FCPA enforcement action and is thus less likely to result in related FCPA criminal charges against company employees given that an individual is more likely to put the DOJ to its high burden of proof.

The below statistics provide a compelling datapoint concerning the quality and legitimacy of many corporate DOJ FCPA enforcement actions.

Since NPAs and DPAs were first introduced to the FCPA context in December 2004 (see here), there have been 69 corporate DOJ FCPA enforcement actions.

12 of these corporate enforcement actions were the result of a criminal indictment or resulted in a guilty plea by the corporate entity to FCPA violations. 10 of these corporate enforcement actions – 83% – resulted in related criminal charges of company employees.
46 of these corporate enforcement actions were resolved solely with an NPA or DPA. In only 3 instances – 6.5% – were there related criminal charges of company employees.
A third type of corporate FCPA enforcement action is what I will call a hybrid action in which the resolution includes a guilty plea by some entity in the corporate family – usually the relevant foreign subsidiary – and an NPA or DPA against the parent company. Since the advent of NPAs and DPAs in the FCPA context, there have been 11 such corporate enforcement actions. In 3 of these actions - 27% - there were related criminal charges of company employees. This percentage is what one might expect compared to the two types of corporate FCPA enforcement actions discussed above, although it is interesting to note the following regarding these three instances. The DOJ ended up dismissing the charges against Si Chan Wooh (Schnitzer Steel), John O’Shea (ABB) was not found not guilty, and Bobby Elkin (Alliance One) received a probation sentence after the sentencing judge questioned many aspects of the enforcement action (see here for the prior post).

If the above statistics do not cause you to question the quality and legitimacy of many corporate FCPA enforcement actions, no empirical data ever will. For those who believe NPAs and DPAs always represent provable FCPA violations, the ball is now in your court to offer credible explanations for following datapoints.

If a corporate DOJ FCPA enforcement action is the result of a criminal indictment or resulted in a guilty plea by the corporate entity to FCPA violations, there is a 83% chance that related criminal charges will be brought against a company employee. If a corporate DOJ FCPA enforcement action is resolved solely with an NPA or DPA, there is a 6.5% chance that criminal charges will be brought against a company employee.

[Note - the above data was assembled using the "core" approach as well as the definition of an FCPA enforcement action described in this prior post]

The Manhattan Institute Joins The FCPA Reform Conversation

Thursday, January 17th, 2013

Citing to certain of my prior scholarship (here and here) and other writings, and otherwise highlighting certain issues that have been frequently highlighted on this site for a long time, the Manhattan Institute for Policy Research has joined the FCPA reform conversation.

The issue brief (here) titled “The Foreign Corrupt Practices Act: Aggressive Enforcement and Lack of Judicial Review Create Uncertain Terrain for Businesses,” and authored by Paul Enzinna (a partner at Brown Rudnick), argues as follows. “There is a strong case for reforming the FCPA through legislation, in order to continue to uphold the statute’s historical commitment to maintain the integrity of American businesses’ dealings abroad while limiting the ability of federal enforcement agencies to police business conduct worldwide and gain broad, quasi-regulatory powers over global businesses absent judicial oversight.”

The issue brief then states as follows.

“Congress should take up the cause of FCPA reform, clarifying the statute’s reach in the areas in which DOJ and the SEC have aggressively sought its expansion:

Jurisdiction. Congress should clarify the reach of the FCPA’s “in furtherance of” jurisdiction. Specifically, Congress should decide whether to limit the FCPA’s application against foreign businesses bribing foreign officials. The Justice Department’s broad interpretation of the FCPA, predicated upon transactions denominated in dollars and those messages that may pass through U.S.-based e-mail servers, potentially affects U.S. diplomacy and finance and technology sector competitiveness.
Foreign official. Congress should specify the extent to which the FCPA applies to low-level employees of state-owned enterprises. The economic emergence of formerly Communist countries and of the still formally Communist China has led to a proliferation of state-owned enterprises with which American companies must do business in order to compete globally.
To obtain or retain business. Congress should clarify the “routine government actions” covered by the FCPA’s express exemption for “facilitating payments” not covered by its prohibition on payments to officials to “obtain” or “retain” business. DOJ’s broad interpretation of this element to include payments intended to obtain licenses or permits and other low-level bribes seems in conflict with the statute’s express preemption and has fueled the growth in FCPA enforcement actions.”

I agree with many of the issues raised in the brief such as:

“Although the ever-widening interpretations of the FCPA seem to go beyond a commonsense understanding of the statute and its purpose, these interpretations are not being subjected to adequate judicial review because the high costs associated with potential criminal conviction have generally led targeted corporations to resolve cases without trial through “deferred-prosecution agreements” (DPAs) or “non-prosecution agreements” (NPAs).”

“DOJ has made it difficult for businesses to parse the statutory term “foreign official” by issuing contradictory statements” (see here for the prior post).

“DOJ’s expansive readings of the FCPA, along with the lack of judicial review over the department’s interpretations, are problematic. Invoking the statute to prosecute payments intended to help obtain licenses or permits is clearly at odds with Congress’s express facilitating-payments exception.” (see here for my article detailing legislative history and judicial scrutiny concerning non-foreign government procurement payments).

“In its current guise, the FCPA has helped generate an essentially unaccountable DOJ bureaucracy …”.

However, my reaction to the latest reform proposals is the same as my general reaction to certain of the Chamber’s FCPA reform proposals (see here).

While I have argued for an FCPA compliance defense (see here for my scholarship “Revisiting an FCPA Compliance Defense”), many other aspects of FCPA reform – and calls to amend the statute – are more pleas for judicial scrutiny and application of black letter legal principles to FCPA enforcement.

The remedy for enforcement of a law that largely takes place in the absence of judicial scrutiny where enforcement is in many cases contrary to Congressional intent and inconsistent in certain other respects with black letter legal principles, is not to amend the law, but to inject judicial scrutiny into the process so that Congressional intent and black letter legal principles can be vetted and decided upon by someone other than the enforcement agencies. For my verbal explanation of this issue, see this recent interview (approximately 5 to 7 minute mark) with the on-line news site Main Justice.

My FCPA reform proposal is to couple a compliance defense along the lines I outline in my article with abolishing NPAs and DPAs. These alternative resolution vehicles (first introduced into FCPA enforcement in 2004 as a matter of DOJ policy and not Congressional authorization) have created the conditions in which the “facade of FCPA enforcement” I have written about here continues to flourish. Think of the judicial process as a river where issues are allowed to flow into the proper channel. NPA and DPAs are logs in the river blocking the flow of issues into the proper channel.

In terms of other FCPA reform measures, I have also suggested that the enforcement agencies publish declination decisions when a company voluntarily discloses and the establishment of meaningful post-employment restrictions on FCPA enforcement attorneys.