Archive for the ‘FCPA Statistics’ Category

Voluntary Disclosure Statistics

Wednesday, December 10th, 2014

Recently, the Wall Street Journal published this article titled “Why Companies Might Opt to Self-Report Potential Bribery Issues.” The article contained several observations from FCPA lawyers typically seen in voluntary disclosure articles.

“A lot of companies are self-reporting. And a lot of companies are not self-reporting,” said F. Joseph Warin, chairman of the Washington litigation department at Gibson Dunn & Crutcher LLP. Companies devote “an enormous effort” analyzing whether to self-report, he said.

“Voluntary disclosure is a business decision,” said Laurence Urgenson, a partner at law firm Mayer Brown LLP. “What are the costs and the benefits? Right now it’s a guessing game.”

For foreign corporations, the Justice Department’s nuanced message about the benefits of self-reporting “is lost in translation,” said Robert Luskin, a partner at Squire Patton Boggs who represents foreign companies in FCPA probes. “They see settlements in the hundreds of millions of dollars.…The view is that it’s better to just keep [the Justice Department] as far away as possible.”

What caught my eye though from the article is the following.

“About a third of the Securities and Exchange Commission’s FCPA cases in recent years have come from companies that self-report, an agency spokeswoman said. A Justice Department spokesman said the department doesn’t track the figure.”

I track voluntary disclosure statistics and the SEC’s claimed one-third statistic is not accurate.

Since 2011, there have been 34 corporate SEC FCPA enforcement actions.  20 of the enforcement actions (59%) have been based on voluntary disclosures per the SEC’s own resolution documents.  This 59% figure actually under-represents the impact of voluntary disclosures on the SEC’s FCPA enforcement program because several other FCPA enforcement actions (for instance against pharmaceutical companies Eli Lilly, Smith & Nephew, and Biomet) are generally viewed as “fruits” of a prior voluntary disclosure (Johnson & Johnson).

What about DOJ FCPA enforcement, given that the agency apparently doesn’t track voluntary disclosure figures?

Since 2011, there have been 31 core corporate DOJ FCPA enforcement actions.  17 of the enforcement actions (55%) have been based on voluntary disclosures per the DOJ’s own resolution documents.  Here again, this 55% figure actually under-represents the impact of voluntary disclosures on the DOJ’s FCPA enforcement program because several other FCPA enforcement actions (for instance against Smith & Nephew and Biomet) are generally viewed as “fruits” of a prior voluntary disclosure (Johnson & Johnson). Moreover, the Bilfinger enforcement action was the direct result of the prior Willbros enforcement action (an enforcement action based on a voluntary disclosure).

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.”

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A good weekend to all.

Issues To Consider From The Recent OECD Report

Thursday, December 4th, 2014

Earlier this week the OECD released a report titled “OECD Foreign Bribery Report – An Analysis of the Crime of Bribery of Foreign Public Officials.”

The Report “endeavours to measure, and to describe, transnational corruption based on data from the 427 foreign bribery cases that have been concluded since the entry into force of the OECD Anti-Bribery Convention in 1999″ by the 41 signatory countries to the OECD Convention. From this universe of cases, the Report then attempts to calculate several statistics.

Calculating statistics across 41 countries with different legal regimes, different ways of prosecuting cases, etc. is a monumental task.

It is also a task that yields statistics that are not very reliable or meaningful, particularly given certain of the methodologies and assumptions made in the Report.

For starters, the report itself notes as follows.  ”This report is peppered with unknown data, ranging from 2% to 36% depending on the particular data set.  Many of the concluded cases did not contain all the information needed to make a full analysis and were also not publicly available.”

Second, the report ”does not examine foreign bribery related offenses such as accounting.”  It is a bit unclear what this means, but if it means that FCPA books and records and internal controls cases only are not included in the dataset, then this is a significant limitation because actual charges in an FCPA enforcement action are often based – not solely on the conduct at issue – but other factors such as voluntary disclosure, cooperation, collateral effects, etc.  In short, several FCPA enforcement which could implicate the FCPA’s anti-bribery provisions do not as a technical matter.

Third, and as noted in footnote 11 of the report, “in the case of the United States, sanctions imposed by the Securities Exchange Commission (US SEC) and Department of Justice (US DOJ) are counted separately.”  Given that U.S. cases comprised approximately 1/4 of the total cases examined, this creative counting method is hugely significant.

Consider just 2013 FCPA enforcement in which there were 9 core corporate enforcement actions (ADM, Bilfinger, Weatheford, Diebold, Total, Ralph Lauren, Parker Drilling, Stryker and Phillips).  Yet if one counts DOJ and SEC actions separately, as did the OECD, notwithstanding the fact that most DOJ and SEC enforcement actions were based on the same core conduct, the number dramatically jumps to 15 corporate enforcement actions in 2013.  In other words and using just one year, one can clearly see how creative FCPA enforcement action counting methods dramatically changes the denominator for every statistic calculated.

One statistic that has generated much media attention from the OECD Report  (see here and here) is the finding that 53% of foreign bribery cases involved corporate management or CEOs.  However, the OECD Report - as noted in footnote 36 – defines “management” to mean senior level management, executives at the board level, directors and lower level management and states that “case data was insufficient to distinguish between these categories.”

To be sure in the FCPA context, certain enforcement actions have involved senior executive conduct and/or board conduct, but the vast majority of FCPA enforcement actions do not involve senior level management and a frequent allegation in such enforcement actions is that no one at the parent company resolving the enforcement action was aware of or participated in the alleged improper conduct.  To the extent there was a management level employee (and “title inflation” surely seems to be used in many FCPA enforcement actions) involved in the alleged improper conduct, the individual was employed by a legal entity (such as foreign subsidiary) separate from the entity actually resolving the enforcement action.

Because the OECD Report was “prepared with the aim of assisting the OECD Working Group on Bribery in International Business Transactions and the G20 Anti-Corruption Working Group in their efforts to combat transnational bribery,” it was imperative that the statistics in the Report be reliable and meaningful.

Based on the above information, you can decide for yourself whether this is the case.

Despite the statistical deficiencies of the OECD Report there are several “preliminary conclusions” in the report worthy of highlighting.

For instance, as to the long timeframes involved in foreign bribery cases, the report states “it is essential that law enforcement authorities undertake efficient and effective investigations to avoid unnecessary delays.”

As to settlements, the predominate vehicle by which foreign bribery cases are resolved, the report states that “settlement procedures should respect the principles of due process, transparency and consistency.”

As to compliance programs, the report states that there is “scope for greater incentivizing preventative anti-bribery compliance programs …”.

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DOJ Assistant Attorney General Leslie Caldwell delivered this speech in connection with the release of the OECD Report.

FCPA Survey Results From The Classroom

Wednesday, December 3rd, 2014

Survey ResultsCall them green, inexperienced, and naive as to how things really work.

I call them good Foreign Corrupt Practices Act survey respondents because they are immersed in learning: (i) about black letter legal principles; (ii) legal authority as opposed to non-legal sources of information; and (iii) how the law and the adversarial system functions in other areas of law.  I call them good FCPA survey respondents because their answers are not influenced by client concerns, maintaining their own practice, or maintaining good will with the enforcement agency officials who possess the “carrots” and “sticks” relevant to FCPA enforcement.

The below survey data was collected – anonymously – this semester from students in my FCPA class at Southern Illinois University School of Law.  As noted in this prior post, the class is one of the only law school courses of its kind in the country.  (See here for media coverage of the class).  The prior post sets forth the learning objectives of the class and during the semester students had the opportunity to engage with FCPA lawyers in private practice, an FCPA violator and government cooperator, and in-house FCPA compliance attorneys at leading companies.

The survey results are set forth below.  (Next to each survey result, in ( ) is the response to the same question from last year’s class.  Note, in a few instances new questions were asked this year compared to last year, thus the reason for no previous response).

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(1)  In enforcing the FCPA, or any law for that matter, what is the best definition of success

The number of settlements the DOJ or SEC is able to secure = 15% (17%)
Instances in which the DOJ or SEC is put to its burden of proof and prevails = 85% (83%)
(2) Rank, in the order of importance (with 1 being most important and 4 being least important) what the FCPA means?
Judicial decisions construing the FCPA = average = 2.9 (3.1)
The FCPA’s statutory language = average = 1.2 (1.3)
Enforcement agency guidance, including resolved enforcement actions = average = 3.4 (3.4)
Congressional intent in enacting the FCPA = average = 2.4 (2.3)
(3)  You are the general counsel of ABC Inc.  A whistleblower has contacted the DOJ and SEC regarding potential FCPA violations in your China operations and the agencies have opened up an investigation.  After an internal review conducted by outside counsel, outside counsel advises you that based upon the factual evidence and relevant FCPA legal authority, should the enforcement agencies bring an action and be put to its burdens of proof in an adversarial proceeding, there is only a 30% chance that the enforcement agencies would prevail.  Should the enforcement agencies bring an action (i.e. the DOJ criminally charges the company and the SEC civilly charges the company), it is likely that the company’s stock price would fall at least 3% (and perhaps more) eclipsing $750 million in shareholder value.  Outside counsel advises you that during its negotiations with the DOJ and SEC, the agencies are willing to offer the company non-prosecution agreements in which the company will be required to pay $75 million in aggregate fine and penalty amounts to resolve its alleged FCPA scrutiny.  The non-prosecution agreements are unlikely to have any impact on the company’s stock price.  As general counsel, what course of action are you going to suggest to the company’s board of directors?
Put the DOJ and SEC to its burden of proof at trial = 15% (11%)
Agree to resolve the alleged FCPA scrutiny via the NPAs = 85% (89%)
(4) Are foreign policy implications present in most current FCPA enforcement actions given the alleged “foreign officials”?
Yes = 21% (18%)
No = 79% (82%)
(5) In your opinion, the 11th Circuit’s Esquenazi “foreign official” decision:
Provides clarity to the FCPA’s “foreign official” element = 71%
Results in less clarity as to the FCPA’s “foreign official” element = 29%
(6) Given the DOJ and SEC’s enforcement theories – most notably in enforcement actions involving foreign licenses, permits, etc. – does the FCPA’s facilitating payment exception have any real meaning in this new era of enforcement?
Yes = 27% (32%)
No = 73% (68%)
(7) Given the “carrots” and “sticks” relevant to resolving a corporate FCPA enforcement action, do statute of limitations have any real meaning in this new era of enforcement?
Yes = 8% (16%)
No = 92% (84%)
(8) FCPA enforcement actions often involve companies that are otherwise viewed as selling the best product or service for the best price.  With such companies, can it truly be said that the alleged improper payments were the sole reason the company secured the contract or other benefit received?  In other words, does a “but for” analysis have a place in arriving at FCPA fine and penalty amounts?
No – the full value of the benefit allegedly received should be the starting point for calculating fine and penalty amounts regardless of the type of company resolving the enforcement action = 33% (56%)
Yes – by using the full value of the benefit received, the calculation ignores the fact that the company may have secured the benefit regardless of the alleged improper payments = 67% (44%)
(9) Is disgorgement an appropriate remedy when the SEC charges only FCPA books and records and internal controls violations?
Yes = 17% (25%)
No = 83% (75%)
(10)  In an FCPA enforcement action involving both a DOJ and SEC component, the value of the benefit allegedly received by the company from the improper payments is a key factor in determining the criminal fine amount under the advisory Sentencing Guidelines.  The same figure is also likely to comprise the disgorgement amount in an SEC enforcement action.  This is:
Inappropriate “double-dipping” and thus unfair to the company and its shareholders = 92% (88%)
Appropriate, this is not “double-dipping” and even if it was it is still appropriate = 8% (12%)
(11) Is there a double standard when it comes to enforcement of the FCPA and the U.S. domestic bribery statute (18 USC 201)?  In other words, are corporate interactions with “foreign officials” subject to greater scrutiny and different standards of enforcement than corporate interactions with U.S. officials?
Yes, there is a double standard = 100% (94%)
No, there is no double standard = 0% (6%)
(12) Are you uncomfortable with “bribery, yet no bribery” cases such as Siemens and BAE where the enforcement agencies allege facts suggesting violations of the FCPA’s anti-bribery provisions, yet neither entity was actually charged with such violations?
Yes = 80% (56%)
No = 20% (44%)
(13) Since 2008, approximately 75% of corporate DOJ FCPA enforcement actions (and approximately 80% of corporate SEC FCPA enforcement actions) have not (at least yet) resulted in any related enforcement actions against company employees?  This is likely due to:
The quality and legitimacy of the corporate enforcement action that was resolved via an NPA or DPA = 56% (29%)
Other factors not calling into question the quality and legitimacy of the corporate enforcement action = 44% (71%)
(14)  Given the conduct at issue in the respective cases, does the disparity between the sentences of Joel Esquenazi and Carlos Rodriguez (180 months and 84 months), two individuals who tested their innocence, and Albert Stanley and Jeffrey Tesler (30 months and 21 months), two individuals who pleaded guilty, concern you?
Yes = 100% (79%)
No = 0% (21%)
If yes, were
Stanley and Tesler sentenced too lightly = 38% (27%)
Esquenazi and Rodriguez sentenced too harshly = 62% (73%)
(15) 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”

Yes, this reason has merit = 100% (83%)
No, this reason does not have merit = 0% (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?

Yes, this reason has merit = 81% (94%)
No, this reason does not have merit = 19% (6%)
(16) 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.  This typical career path:
Concerns me and the issue ought to be addressed to a greater extent that it currently is = 63% (61%)
Does not concern me = 37% (39%)

(17) 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 the relatively 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:

Have merit and provide shareholders the ability to recover for harm suffered as a result of the company’s FCPA scrutiny or liability = 46% (28%)
Lack merit and represent plaintiffs’ lawyers desire to feed-off this new era of FCPA enforcement = 54% (72%)

(18) Rank, in order of importance (with 1 being the greatest interest and 3 being the weakest interest) which law enforcement agency has the greatest interest in bringing an enforcement action when a foreign company or foreign national subject to the FCPA allegedly bribes a foreign official?
The “home” jurisdiction of the foreign company or foreign national = 1.5
The “home” jurisdiction of the foreign official allegedly bribed = 2.4
The U.S. = 2.1
(19)  Are you in favor of the FCPA being amended to include a compliance defense (meaning that a company’s pre-existing compliance policies and procedures, and its good-faith efforts to comply with the FCPA, would be relevant as a matter of law when a non-executive employee or agent acts contrary to those policies and procedures and in violation of the FCPA)?
Yes - 86%
No - 14%

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.

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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.