Archive for the ‘FCPA Inc.’ Category

Friday Roundup

Friday, February 6th, 2015

Roundup2Quotable, on offense, scrutiny alert, to FCPA Inc., and resource alert.  It’s all here in the Friday roundup.

Quotable

This article in The Recorder reports on a recent public event in which Assistant Attorney General Leslie Caldwell spoke.  According to the article:

“Caldwell also said the Criminal Division would cut down on its use of deferred prosecution agreements, which she said had become the ‘default’ means to resolve corporate cases. ‘Deferred prosecution agreements were a bit overused.’ Instead, Caldwell told the audience to expect more declinations from the government, which would let companies, individual targets and the public know when an investigation is being closed without charges.”

Glad to see that Caldwell agrees that DPAs have become a default means to resolve cases and overused –  central themes of my 2010 article “The Facade of FCPA Enforcement” and my 2010 Senate FCPA testimony.

On Offense

This prior post highlighted Canada’s 2013 enforcement action against Griffiths Energy International Inc. (“GEI”) under Canada’s Corruption of Foreign Public Officials Act (“CFPOA”) for allegedly bribing Chad’s Ambassador to Canada, Mahamoud Adam Bechir and his wife Ms. Nouracham Niam.

According to this recent article in the Calgary Sun Bechir and Niam are going on offense.  The article notes:

“The former Chadian ambassador to Canada and his wife have launched a $150-million lawsuit claiming “false” bribery allegations against them have sullied their reputation. Mahamoud Adam Bechir and his spouse, Nouracham Niam, are suing law firm Gowlings Lafleur Henderson LLP, partner Kristine Robidoux and the current corporate owner of Griffiths Energy International (GEI) Inc. In a statement of claim filed in Calgary Court of Queen’s Bench the couple say claims by Griffiths it paid a $2-million bribe to the wife’s company were untrue.”

Scrutiny Alert

Staying north of the border, as noted in this report,

“MagIndustries Corp., a China-backed Canadian potash company, said it has formed a special committee to look into allegations some of its officers and employees have breached the Corruption of Foreign Public Officials Act. Canadian police visited the company’s head office in Toronto with a search warrant on Jan. 22 in connection with the allegation, MagIndustries said Thursday in a statement. “No charges have been laid in connection with this investigation and MagIndustries has no knowledge of any such breach and will be cooperating fully with the authorities,” the company said. MagIndustries, controlled by Evergreen Resources Holdings Ltd. according to data compiled by Bloomberg, is developing the Mengo potash mine in Republic of Congo.”

To FCPA Inc.

It happens so often it is difficult to keep track of, but I try my best.

In the latest example of a DOJ FCPA enforcement attorney departing for FCPA Inc. Ropes & Gray announced that “Ryan Rohlfsen, senior trial attorney at the U.S. Department of Justice’s Criminal Division, Fraud Section” who was as “part of an elite group of federal prosecutors responsible for the global enforcement of the U.S. Foreign Corrupt Practices Act (FCPA)” has joined the firm as a partner.

Resource Alert

My former law firm, Foley & Lardner, recently announced “Foley Global Risk Solutions.”  As stated in the release:

“Foley & Lardner LLP announced today the launch of Foley Global Risk Solutions – a new cost-effective service offering designed to help companies operating overseas comply with the Foreign Corrupt Practices Act (FCPA). Foley GRS is an innovative, web-based service offering that provides businesses with a fully integrated FCPA compliance solution. The product, which relies on cutting-edge technology, will be offered for a fixed annual subscription fee. [...] Foley GRS is the first-of-its-kind integrated legal services solution using a technology-based platform that delivers a comprehensive, closed-loop program that includes risk assessments, current and periodically updated policies and procedures, training for employees, regular communications, and most importantly, access to legal advice and counseling on FCPA issues that arise during the course of business operations.”

*****

A good weekend to all.

 

Friday Roundup

Friday, January 30th, 2015

Roundup2Scrutiny alerts, compliance defense, be a scholar, industry news, and for the reading stack.  It’s all here in the Friday roundup.

Scrutiny Alerts

The Bank of New York Mellon Corp (BNY Mellon) recently disclosed:

“In January 2011, the Enforcement Division of the U.S. Securities and Exchange Commission (the “SEC Staff”) informed several financial institutions, including BNY Mellon, that it had commenced an inquiry into certain of their business practices and relationships with sovereign wealth fund clients.  BNY Mellon has fully cooperated with the SEC Staff’s investigation.  In the third quarter of 2014, the SEC Staff issued Wells notices to certain current and former employees of BNY Mellon, informing them that the SEC Staff has made a preliminary determination to recommend enforcement action against them for alleged violations of the U.S. Foreign Corrupt Practices Act in connection with the provision of a limited number of internships to relatives of sovereign wealth fund officials.  BNY Mellon received a similar Wells notice in the fourth quarter of 2014.  Although it is not possible to predict the ultimate resolution or financial liability with respect to this matter, BNY Mellon is currently of the opinion that the outcome of this matter will not have a material effect on BNY Mellon’s business, financial condition or results of operations.”

A Wells Notice is not common in the FCPA context.  As highlighted earlier this week regarding Cobalt, just because the SEC issues a Wells Notice does not mean there will be an enforcement action.

Compliance Defense

Singapore, a country hardly viewed as a slouch on law and order issues, is in the process of reviewing its Prevention of Corruption Act (PCA).  As noted in this Norton Rose Fulbright update, among the areas for potential reform is corporate liability and a compliance defense.  As noted in the update:

Corporate Liability

Prosecutions in Singapore for bribery-related offences have primarily focused on individuals. While Singapore law allows corporations to be prosecuted, and international obligations under the OECD Anti-Bribery Convention require corporations to be legally liable for corrupt practices, the reality is that it is evidentially difficult to prove that a corporation had the requisite intent and carried out the relevant corrupt conduct. This is usually proven by showing the individual who committed the crime can be regarded as the “embodiment of the company” or its “directing mind and will” – not an easy task in an era of large multinational corporations with complex decision-making trees.

Any reform to the PCA may do well to take a leaf out of the pages of Singapore’s own anti-money laundering law – the Corruption, Drug-Trafficking and Serious Crimes (Confiscation of Benefits) Act (CDSA). The CDSA renders money-laundering by a corporation a criminal offence that can be proven through the state of mind as well as the conduct of any “director, employee or agent” who was acting within the scope of his or her actual or apparent authority. In other words, the evidential threshold is significantly lowered and the outdated “directing mind and will” test is done away with.

Compliance Defense

If the threshold for proving corporate liability is lowered, some balance can be restored by introducing a compliance defence. A corporation that is found liable for bribes paid by its “director, employee or agent” can be absolved of legal liability if it can show that it took reasonable steps to prevent such corrupt practices from taking place. Such a compliance defence provides a legal impetus for companies to adopt prudent business practices and foster ethical corporate cultures through the implementation of anti-corruption compliance programs.

This notion of a compliance defence finds support in the form of the “adequate procedures” defence enshrined in the recent UK Bribery Act 2010, and has been the subject of a movement in the US to introduce a similar affirmative defence in the context of the reform of the Foreign Corrupt Practices Act (FCPA).

Be a Scholar

Trace International has announced that “applications for the 2015-2016 TRACE Scholar Program at the University of Washington School of Law are being accepted now until February 28, 2015.”  Click here and here to learn more.

Industry News

King & Spalding recently announced that Jason Jones (the Assistant Chief of the DOJ’s FCPA Unit) is returning to the firm.

As stated in the release:  ”As a supervisor in the Justice Department’s FCPA unit, Jones oversaw investigations and prosecutions of corporations and their employees for making improper payments to foreign officials in business transactions. He is well versed in the Justice Department’s increasing enforcement in this area.”

In the release, Christopher Wray, leader of King & Spalding’s Special Matters and Government Investigations practice, states: “We are pleased to welcome Jason back to the firm. Jason is well-known by many lawyers in the firm – and highly respected. His FCPA oversight experience at a national level and his strong trial skills provide added bench strength to the broad range of defense work we offer our clients. Jason is a natural fit for our team.“

*****

Debevoise & Plimpton recently announced that “David A. O’Neil, former Acting Assistant Attorney General for the Criminal Division and former Deputy Assistant Attorney General for the Fraud Section at the Department of Justice, has joined the firm as a partner in Washington, D.C.”  As noted in the release, O’Neil “has experience across a broad range of high-profile matters, including the most significant FCPA prosecutions …”.

In this recent Corporate Crime Reporter interview, O’Neil talks about the shift of the corporate crime universe from New York City to Washington, D.C. and states:

“I have witnessed in my time in the Department a significant growth in the work that Main Justice is doing. It is not that the Southern District [of New York] is doing less. It’s that Main Justice is doing more. There are a number of reasons for that. Some are the result of the U.S. Attorney’s Manual, which requires that the Fraud Section have a role in every Foreign Corrupt Practices Act (FCPA) case. Much of it is FCPA driven.”

“When I started out, I actually worked some FCPA cases in private practice. But at that time, it was more of a niche practice. It was not the same kind of focus that it is now.”

“Today, in some ways, white collar practice is synonymous with FCPA practice. As a result, in every FCPA case, Main Justice’s Fraud Section is going to be an active player.”

Asked whether “the FCPA pipeline is still loaded,” O’Neil states:

“The FCPA is going to continue to be an active area. I don’t think we are anywhere near the end of the pipeline. In fact, you see the Department devoting greater resources, including through the creation of a dedicated FCPA unit at the FBI. My prediction would be that FCPA cases continue at their current pace or increase.”

For the Reading Stack

Reagan Demas (Baker & McKenzie) “Biting the Hands That Feed:  Corporate Charity and the U.S. Foreign Corrupt Practices Act.”

A Texas-sized double standard?  See here from the Texas Tribune in an article that begins as follows.  ”It is illegal to bribe a public official in Texas, of course. But you might be surprised with what you can get away with if that public official is a state lawmaker.”

*****

A good weekend to all.

Friday Roundup

Thursday, December 4th, 2014

Roundup2Transparency International’s latest Corruption Perception Index, monitor issues, scrutiny alert, Chinese SOEs, SEC press releases, hot, and for the reading stack.  It’s all here in the Friday roundup.

Transparency International’s Latest Corruption Perceptions Index

Transparency International, a global civil society organization dedicated to the fight against corruption, released recently the 20th edition of its Corruption Perceptions Index (“CPI”).  (See here for TI’s release).  As stated by TI, the CPI “measures the perceived levels of public sector corruption worldwide” and 175 countries are ranked with Denmark, New Zealand, Finland, Sweden, Norway, and Switzerland (topping the list – i.e. low levels of perceived corruption) and South Sudan, Afghanistan, Sudan, North Korea and Somalia (on the bottom of the list – i.e. high levels of perceived corruption).

TI’s CPI is a popular tool on which many business organizations rank perceived risk, but query whether the CPI is a reliable or meaningful measure of the specific risks specific business organizations face when competing in the global marketplace?

For starters, perceptions are just that, perceptions.  To be sure, there are countless honest and ethical people living in Somalia just as there are countless dishonest and unethical people living in Denmark.  Moreover, at its core, FCPA risk is the function of specific business actors (employees and agents) coming into contact with specific foreign officials, in the context of specific foreign business conditions.  These risk points are often industry specific and within a country are often region specific.  None of these factors, or very few, are captured by the CPI.

Thus, while I enjoy each time this year looking at the CPI map, I don’t think it is a very useful tool for business organizations when adopting policies and procedures designed to minimize FCPA risk.

Monitor Issues

An interesting blurb here from Courthouse News Service.

“Siemens and a monitor charged with keeping watch over the German conglomerate’s compliance with a settlement agreement over federal corruption and bribery charges can fight to keep records of that agreement out of the hands of reporters, a federal judge ruled. (See 2014 WL 6817009). 100Reporters – a press outlet with a self-proclaimed mission to “cover corruption of all sorts” – sued the Justice Department under the Freedom of Information Act this past summer, seeking records of Siemens’ compliance with a 2008 settlement of violations of the Foreign Corrupt Practices Act. Siemens pleaded guilty and agreed to pay a precedent-setting $1.6 billion penalty to U.S. and EU authorities to settle charges that it routinely used bribes and slush funds to secure massive public works contracts around the world. Part of the settlement included four-year compliance monitoring by Dr. Theo Waigel, who was given broad access to Siemens’ confidential and commercially sensitive information and records to make annual reports to the Justice Department. The DOJ closed the compliance monitoring in 2012, determining that Siemens had “satisfied its obligations under the plea agreement.” After the Justice Department denied 100Reporters’ request for compliance monitoring documents – including the four annual reports from Waigel – and the group sued, Siemens and Waigel demanded to get involved, citing the right of intervention. For Siemens’ part, the company argued that the reports contained confidential and proprietary information not fit for public consumption. Waigel complained that his personal reputation – and the unfettered access of future compliance monitors – was on the line because he promised Siemens confidentiality while examining the company’s records and delivering his reports to the Justice Department.  Both Siemens and Waigel have a legal interest in fighting 100Reporters’ FOIA request, U.S. District Judge Rudolph Contreras held in a 31-page ruling issued Wednesday. Specifically, Contreras dismissed 100Reporters’ claims that Siemens, Waigel and the DOJ are all fighting from the same legal position. ”Requiring Siemens to monitor the DOJ’s litigation posture from the sidelines until Siemens disagrees with a decision by the agency is inefficient and impractical; indeed, Siemens likely would have limited, if any, insight into the DOJ’s strategy during the litigation, and once Siemens did learn of a hypothetical shift in the DOJ’s position, such as a decision to release a specific category of materials, it might be too late for Siemens to undue any damage done,” Contreras wrote. Furthermore, not allowing Siemens and Waigel to intervene now – and forcing them to wait months or years until the Justice Department has done its withholding analysis – would put them both in danger of missing federal filing deadlines, the judge said. The potential injury to Siemens if the documents are released is both “particularized and sufficiently imminent,” Contreras wrote. ”It is not surprising, then, that 100Reporters cannot cite a single FOIA case in which a court denied on standing grounds the application of a prospective intervenor whose own confidential materials were the clear subject of the FOIA request,” he added. Contreras also rejected calls by 100Reporters to limit Siemens’ involvement solely to FOIA exemption 4, which bars release of confidential and commercially sensitive information. ”A more functional and practical approach is required, and fatally, 100Reporters fails to offer any concrete or realistic consequences to this litigation from Siemens’s (or Waigel’s) intervention that might require the court to impose a limitation on the scope of the defenses that an intervenor may raise as this case, which still is in its infancy, proceeds to the merits,” Contreras wrote. The judge refused 100Reporters’ claims that allowing Siemens and Waigel to get involved would unnecessarily delay the proceedings, advising the group in a footnote “raise such concerns then,” if and when any delays occur.”

The California Lawyer goes in-depth in an article titled “The Secret Life of a Corporate Monitor.”

“Without naming the subjects of his monitoring, Dan Ray talked generally about the highly secretive world of government-appointed corporate monitors, where progress reports are confidential, judges rarely get involved, and the DOJ alone determines whether corporations have complied with terms of the agreements. Monitors are not government employees or agents, and they do not contract with or receive payment from the government. Fees generally are negotiated between the corporation and the monitor.”

Through some basic internet research, it is not that difficult to figure out which companies Ray monitored.  (See here, here and here).

Scrutiny Alert

The Financial Times reports:

“In a Florida court on Tuesday, a judge granted a request by US prosecutors to seize an ice cream cooler, a walk-in freezer, dozens of other pieces of catering equipment and three properties belonging to a woman called Mamadie Touré. It was just one of a ceaseless stream of such requests, through which the authorities seek forfeiture of what they say are ill-gotten assets. But this was no ordinary woman and no ordinary case. Ms Touré is the widow of Lansana Conté, a dictator who ruled the resource-rich but dirt poor west African state of Guinea for 24 years before his death in 2008. And US prosecutors’ interest in Ms Touré runs to much more than a few refrigerators and some Jacksonville real estate. Their court filing in the forfeiture request spells out the details of a two-year US investigation into one of the most wide-ranging cases of alleged corruption in recent years.  Prosecutors alleged in that filing, lodged last week and seen by the Financial Times, that Ms Touré received bribes totalling $5.3m to help a mining company win iron-ore rights in Guinea. The rights in question were to exploit the northern half of a hillside called Simandou, considered the planet’s richest virgin deposit of iron ore. The company involved is not named in the filing. But references to documents published in a Guinean inquiry, to the timing of the award of the mining rights and to a separate criminal case make it obvious that the company is BSG Resources, the mining arm of Israeli billionaire Beny Steinmetz’s family conglomerate.”

Chinese SOEs

An interesting article recently in the Wall Street Journal.  According to the article:

“At the end of 2013, China had about 155,000 firms owned by central, provincial and local governments, according to the Ministry of Finance.  Beijing itself directly controls less than 120 of the biggest and most strategically significant industrial companies, which are responsible for building the world’s largest nuclear reactors and most extensive high speed rail network, buying up mining and agricultural resources overseas, and spreading Chinese goodwill with infrastructure projects across the developing world. [...] Many smaller state-owned firms make goods with no obvious strategic significance, like spirits and toothpaste …”.

The article contains an interesting chart comparing six China SOEs with U.S. counterparts.  According to the chart, the six SOEs have approximately 2.6 million employees.

SEC Press Releases

Russell Ryan (King & Spalding and former assistant director of enforcement at the SEC ) returns to the Wall Street Journal’s opinion page with this dandy piece titled “Get the SEC Out of the PR Business.”  He begins:

“Press releases are par for the course when the Securities and Exchange Commission files a case in federal court that it must later prove to a judge or jury. But the agency is increasingly shunting cases into its own administrative proceedings, where it initiates the prosecution and ultimately decides guilt or innocence—along with the severity of any sanctions—subject to only limited review in court. Given the SEC’s peculiar quasi-judicial role in these cases, you might think the agency would refrain from gratuitously stoking prehearing publicity against the accused. Think again. The SEC now routinely issues press releases when it files charges in administrative cases it will eventually decide. This practice calls into question the agency’s ability to decide those cases fairly and impartially.”

[...]

“SEC releases also stray beyond a fair and accurate summary of agency action. Many confuse what happened by asserting—often in the headline or lead sentence—that the SEC “charged” the accused with wrongdoing. But at this initial stage only SEC staff employees, typically from the enforcement division, have “charged” any wrongdoing. Commissioners, at least in theory, have merely scheduled a hearing to determine whether the employees can prove their charges—a determination the commissioners are supposed to make after an administrative judge conducts the hearing and makes a preliminary decision. Not surprisingly, media reports often reinforce the misperception that SEC commissioners are prosecuting these cases rather than deciding them. One of the most troubling features of SEC prehearing press releases is the partiality they betray in favor of agency prosecutors over the accused. In virtually all cases, the SEC allows its prosecuting employees not only to ghostwrite the official press release but also to insert gratuitous quotations that embellish the formal accusations with more colorful words and phrases like “tricks,” “calculated fraud,” “reaping substantial profits,” and “choosing profits over compliance.” The accused is never extended similar courtesies. When the SEC initiates enforcement action administratively rather than in court, it should embrace its primary role as impartial decision maker. That means resisting the urge to stoke prehearing publicity and maintaining strict neutrality in both fact and appearance. By failing to do so, the SEC risks having administrative fines and other sanctions swept aside if a court someday concludes, quite reasonably, that agency press releases plausibly suggest prejudgment of cases or lack of impartiality. The agency may consider that scenario unlikely. But given its determination to prosecute more cases administratively, that may not be a risk worth taking.”

Hot

You probably already knew that FCPA and related practices are hot.  But just in case you need another reminder, see here.  The latest edition of “What’s Hot and What’s Not in the Legal Profession” contains the following under the “hot” category.

“Anti-corruption. Larger U.S. firms continue to increase enforcement of the Foreign Corrupt Practices Act, leading to more prosecutions. The U.K., China, Brazil and Canada have all enacted anti-bribery laws in the past few years and are now increasing investigations.”

You can elevate your FCPA knowledge and practical experience by attending the FCPA Institute in Miami (Jan. 12-13, 2015). Join other firm lawyers, in-house counsel, auditing professionals and others already registered for the FCPA Institute – Miami by clicking here to register.  CLE credit is available.

Reading Stack

The lastest edition of Debevoise & Plimpton’s always informative FCPA Report is here.

From Foley & Lardner attorney Aaron Murphy and Daniel Seltzer (Senior Director, Anticorruption for Accenture) “The End of Whac-A-Mole Compliance:  A Global Approach to Anti-Corruption Actions.”

*****

A good weekend to all.

A Comprehensive FCPA Resource

Wednesday, November 5th, 2014

The question was recently asked: ”will there ever be a classic treatise on the FCPA?”New Era

According to Webster’s, a treatise is a book, article, etc., that discusses a subject carefully and thoroughly.

With that definition in mind, I invite you to consider my new book “The Foreign Corrupt Practices Act in a New Era.”  Inside you will find:

  • A thorough telling of the story of the FCPA told largely through original voices of actual participants who shaped the pioneering law;
  • Foundational knowledge (such as DOJ and SEC policy and resolution vehicles and the realities of the global marketplace) that best enhance understanding and comprehension of specific FCPA topics;
  • A comprehensive analysis of the FCPA’s anti-bribery provisions and for each element, exception or affirmative defense discussion of all legal sources of authority (including all relevant substantive FCPA judicial decisions) as well as non-legal sources of information (including discussion of over 70 FCPA enforcement actions);
  • Discussion of other legal issues also relevant to FCPA enforcement;
  • A comprehensive analysis of the FCPA’s books and records and internal controls provisions including legal authority as well as non-legal sources of information;
  • Analysis of the typical origins of FCPA scrutiny and enforcement;
  • Discussion of FCPA settlement amounts, how they are calculated, and analysis of legal and policy issues relevant to settlement amounts;
  • Discussion of FCPA sentencing issues, how sentences are calculated, and an analysis of legal and policy issues relevant to sentencing decisions;
  • An extended discussion and analysis of an often overlooked topics, “FCPA Ripples,” and how settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement;
  • An exploration of practical and provocative reasons for the general increase in FCPA enforcement during this new era including a discussion of FCPA Inc. and the business of bribery;
  • Identification and discussion of FCPA compliance best practices and benchmarking metrics; and
  • An in-depth discussion and analysis of FCPA reform designed to ensure that the FCPA is best achieving the original goals of the law and that FCPA enforcement is transparent and consistent with rule of law principles.

Whether the above topics highlighted and explored in “The FCPA in a New Era” make it a classic treatise, well, I invite you to come to your own conclusion.  At the very least, you will have to agree that the cover of the book is more inviting than a typical treatise.

While I am certainly not going to ascribe labels to my own work, I am pleased to share what others have said about “The FCPA In a New Era.”

Michael Mukasey, former U.S. Attorney General

“Professor Koehler has brought to this volume the clear-eyed perspective that has made his FCPA Professor website the most authoritative source for those seeking to understand and apply the FCPA. This is a uniquely useful book, laying out systematically the history and rationale of the FCPA, as well as its evolution into a structure governed as much by lore as by law. It will be valuable both to those who counsel international corporations, whether in connection with immediate crises or long-term strategies; and to those who contemplate what the FCPA has become, and how it can be improved.”

Professor Daniel Chow, The Ohio State University Moritz College of Law

“This is the single most comprehensive academic treatment of the Foreign Corrupt Practices available. Professor Koehler’s book will become the authoritative standard for the field. The book not only treats the history of the FCPA, but analyzes the statute’s elements in detail, discusses current cases, and makes proposals for reforms where the current law is deficient. The book is written in a clear, accessible style and I will use it often as a resource for my own scholarly work.”

 Richard Alderman, former Director of the UK Serious Fraud Office

“An excellent and thought-provoking book by a great expert. Backed up by rigorous analysis of cases, Professor Koehler constantly challenges those involved in anti-corruption work by asking the question ‘why?’ He puts forward many constructive and well-argued suggestions for improvements that need to be considered. I have learned a lot from Professor Koehler over the years and I can thoroughly recommend this book.”

Thomas Fox, FCPA Compliance and Ethics Blog and FCPA Practitioner

“The Foreign Corrupt Practices Act in a New Era” should become one of the standard texts for any FCPA compliance practitioner, law student studying the FCPA or anyone else interested in anti-bribery and anti-corruption. It should be on your FCPA library bookshelf.”

Barry Vitou, thebriberyact.com and Compliance Practitioner

“If you only read one book on the US FCPA, read this one. [...] Mike Koehler’s new book is probably the best book we’ve read about the FCPA. [...] For those wanting a pair of ‘FCPA goggles’ no book is, in our opinion, better.”

To order a hard copy of the book, see here and here; to order an e-copy of the book, see here and here.

For media coverage of the book including Q&A’s, see here from Corporate Counsel, here from Global Investigations Review, and here from Corporate Counsel Weekly.

*****

Looking for even more information and analysis of the FCPA and FCPA enforcement?

I invite you to all also consider the following year in review articles.  Granted the below articles are not found between two covers, but you will find approximately 500 pages of FCPA statistics, trends and analysis over time.

For 2013, see here.

For 2012, see here.

For 2011, see here.

For 2010, see here.

For 2009, see here.

The Selling Of FCPA Enforcement Attorneys Needs To Stop!

Thursday, October 23rd, 2014

StopSignFor profit companies that host FCPA conferences are entitled to run their business as they see fit.

However, when for profit companies use Foreign Corrupt Practices Act enforcement attorneys at the DOJ and SEC like commodities that are then marketed and sold to the public, this is where the line needs to be drawn.

A common marketing device the conference companies use in hopes of driving attendance to their events is by touting the public officials who will speak at the event. The marketing materials highlight the DOJ and SEC officials as keynote speakers.  Participants are told they are going to have a “Conversation with DOJ and SEC Prosecutors.”

One e-mail I recently received attempted to entice me as follows.

Come for the DOJ and SEC, Stay for the Rest…

“With 12 senior level DOJ and SEC officials providing invaluable insights into the latest enforcement initiatives, there is so much more to [the conference next month]“

Another recent e-mail from the same conference company had the following subject matter line:  ”Join the DOJ, SEC, Over 500 Anticorruption Professionals Next Month in DC.”

Another recent e-mail from the same company concerning a separate event stated “gain first-hand insights from US DOJ, SEC and the IRS on the priorities and approaches to building a successful case.”  The more formal marketing material from the conference company profiled DOJ, SEC and IRS officials as “featured speakers” and described the enforcement officials’ panel as an “exclusive” session.

Exclusive is right because the general public is not invited.

Rather, to hear your public officials speak about an important law you will have to pony up (approximately $2,500 – $4,000 dollars depending on the package you choice and when you register).

The selling of FCPA enforcement attorneys by private companies needs to stop.

FCPA enforcement attorneys are public officials, not a commodity that a for-profit company should be allowed to sell.

It is is bit ironic that these conferences focus on FCPA topics, yet are not the speaking slots a thing of value that the conference companies provide to public officials in an effort to obtain more business?  Not a clear parallel to be sure, but an issue to nevertheless ponder.  Why do the FCPA enforcement attorneys at the DOJ and SEC allow themselves to be used as pawns by for profit companies?  After the FCPA Guidance is there really a need for the enforcement officials to hit the FCPA conference circuit as frequently as they do?

These are serious questions that deserve more attention.

On final point – conference participants are lead to believe by the conference firm marketing literature that they are going to hear unique insight into DOJ or SEC enforcement policy and procedures.  The reality is the first words out of the mouth of the DOJ or SEC officials will usually be something to the effect that they are speaking in their individual capacity and that nothing they say represents official DOJ or SEC policy or binds the DOJ or SEC.

For previous posts on the above (and to see how this practice has NOT stopped) see here and here.