Archive for the ‘OECD’ Category

What If?

Monday, November 26th, 2012

What if, instead of issuing guidance in 2012, the DOJ would have issued guidance in 1988 after Congress, as part of the FCPA’s 1988 amendments, encouraged the DOJ to issue such guidance?

For instance, a relevant House Report stated as follows.  “In order to enhance compliance with the provisions of the FCPA [the FCPA amendment] establishes a procedure for the [DOJ] to issue guidance describing examples of activities that would or would not conform with the [DOJ’s] present enforcement policy regarding FCPA violations.”

The Sixth Circuit noted that the 1998 amendments “clearly evince[d] a preference for compliance in lieu of prosecution; however, in response to Congress’s suggestion, the DOJ determined in 1990 that “no guidelines are necessary.”  (See here and here for prior posts).

What if, instead of issuing guidance in 2012, the enforcement agencies would have issued guidance in 2002 after the OECD, in its Phase 2 Report of the U.S., encouraged the U.S. to issue such guidance?

In pertinent part, the OECD Report stated as follows.  “Despite the abundance of articles and commentaries on [the FCPA], there is only limited amount of authoritative or official guidance available on compliance with the twenty five-year statute.  […]  Much of the authority or guidance regarding the Act comes from speeches from DOJ and SEC officials, DOJ opinions, DOJ and SEC complaints, settlements that have been filed, and informal discussions of issues between companies’ counsel and the DOJ or the SEC.  […]  The status of these various sources of information is however not always clear:  there could be merit in regrouping and consolidating them in a single guidance document.”

The OECD Phase 2 Report concluded on this issue as follows.  “In the view of the lead examiners, the time has come to explore the need for further forms of guidance, mainly to assist new players […] on the international scene, and to provide a valuable risk management tool to guide companies through some of the pitfalls which might arise in structuring international transactions involving potential exposures.”

What if, instead of issuing FCPA guidance in 2012, the enforcement agencies would have issued guidance in 2010 after the OECD, this time in its October 2010 Phase 3 Report of the U.S., stated as follows.  “The evaluators recommend that the United States consider consolidating and summarizing [all relevant sources of FCPA information] to ensure easy accessibility, especially for [companies] which face limited resources.”

Despite Congress suggesting FCPA guidance in 1988, and repeated OECD recommendations for guidance in 2002 and 2010, the DOJ refused to issue guidance.

For instance, in the aftermath of a November 30, 2010 Senate FCPA hearing, Senator Amy Klobuchar asked the DOJ the following post-hearing question.  “Do you believe companies could comply with more certainty with the FCPA if they were provided with more generally-applicable guidance from the Department in regards to situations covered by the FCPA that are not clear cut or fall into ‘gray’ area.”   The DOJ response was that it “believes it provides clear guidance with respect to FCPA enforcement through a variety of means” and it then listed the same general categories of information the OECD identified in 2002 as being deficient. (See here).

Although the enforcement agencies state in the Guidance that its issuance was “in part, a response to [the OECD’s] Phase 3 recommendations” the DOJ’s above response after the OECD Phase 3 recommendations calls into question the genuineness of this motivation.

Another likely motive for issuing the Guidance was the desire of the enforcement agencies to forestall introduction of an actual FCPA reform bill.

As to this issue, the following background is relevant.  After the November 2010 Senate FCPA hearing, FCPA reform gained steam heading into a June 2011 House hearing.  The House hearing evidenced bi-partisan support for certain aspects of FCPA reform and at the conclusion of the hearing Chair James Sensenbrenner stated that “we will be drafting [an FCPA reform] bill.  (See here).  Against this backdrop, in November 2011, Assistant Attorney General Lanny Breuer announced that in 2012 the DOJ intended to issue FCPA guidance.  (See here).

Those on Capitol Hill who were inclined to introduce an FCPA reform bill said that they would await DOJ’s FCPA guidance before introducing such a bill.  (See here).   That the Guidance was issued very soon after the November presidential election, during a lame duck Congress, would seem to advance, in addition to the above information, the notion that issuance and the timing of the Guidance was in part political.

Regardless of the enforcement agencies’ motivations in issuing the Guidance when they did, it is telling that it took over a year – from the time of Breuer’s announcement –  to issue the Guidance.  After all, both the DOJ and SEC have specific FCPA units and both enforcement agencies have indicated, in various ways and in various settings, that the FCPA is a clear and unambiguous statute.

The point is this.

While the Guidance is a useful resource guide as it collects in one document the positions and policies of the enforcement agencies, and for this the agencies deserve credit and a pat on the back, the pat on the back could have and should have occurred a long time ago.

Those who closely follow the FCPA are left to wonder what if the Guidance was issued two years, ten years, or twenty-four years ago?

The OECD Scorecard For Australia

Friday, October 26th, 2012

Today’s post is from Robert Wyld (Partner, Johnson Winter & Slattery – here).  Wyld is the Australia Expert for FCPA Professor.

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The OECD Scorecard For Australia

On 25 October 2012, the OECD published its Phase 3 Report (here) on Australia’s compliance with its treaty obligations under the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the Convention).

Background to Foreign Corruption in Australia

Since 1999, Australia has criminalised the bribery and corruption of foreign public officials. Yet since that date, until July 1999, its enforcement and prosecution track record was poor, with few investigations, no prosecutions and no convictions of any Australian (or foreign) corporation or citizen of foreign bribery.

In 2006, Australia experienced its first public fascination with foreign kickbacks, even if the payments were not, strictly speaking, bribes. AWB Ltd was found by an independent Royal Commission to have paid over $300m in illicit kickbacks to the former Iraq Government of Saddam Hussein by manipulating the United Nations Oil-For-Food humanitarian relief program. Since July 2011, the Securency investigation and criminal prosecution has ground its way through the Courts, where two subsidiaries of Australia’s central Bank, the Reserve Bank of Australia, and various executives employed by the subsidiaries, have been charged with foreign bribery.

In relation to AWB, a former Managing Director and CFO pleaded guilty in August 2012 to civil penalty proceedings for breaches of their statutory duties under the Corporations Act 2001 (Cth) and were sentenced to fines and periods of disqualification from office. In relation to Securency, a former CFO pleaded guilty in August 2012 and was sentenced to 6 months imprisonment wholly suspended for 2 years on  one count of false accounting contrary to section 83(1)(a) of the Crimes Act 1958 (Vic). One foreign national, an Indonesian agent engaged by Securency, has been charged with conspiracy and is the subject of an extradition application by Australia to Singapore.

See here for my previous FCPA Professor guest post on the above topics.

The OECD Reports 1999 to 2011

The OECD has issued two earlier Reports on Australia’s record of compliance with the Convention.

  • The Phase 1 Report (here) was published in December 1999. The OECD welcomed the fact that Australia had criminalised foreign bribery consistent with its obligations under the Convention. Some minor issues were raised under specific provisions but otherwise, no adverse comments were noted by the OECD.
  • The Phase 2 Report (here) was published in January 2006. The OECD noted the lack of any prosecutions, a limited number of investigations and concerns as to the relatively low penalties and inconsistencies arising from how Australia prosecutes corporations for criminal liability on foreign bribery offences.
  • In August 2008, the OECD published an update Report on Progress since its Phase 2 Report (here).  The OECD again noted the lack of prosecutions and limited investigations. Australia had however, been proactive in publishing educative material for business on the risks of foreign corruption. In addition, the OECD encouraged greater coordination between investigative agencies and Australia indicated a review of the applicable penalties was being undertaken.
  • In June 2011, the OECD published an interim report into the Steps taken to implement and enforce the Convention (here). This report noted the substantial increase in penalties for foreign bribery, the triggers for money laundering that can arise with foreign bribery transactions and the legislative changes arising from the AWB Oil-For-Food kickback scandal.

In contrast to the diplomatic language of the OECD, the findings of Transparency International over the same period were more critical. In the Exporting Corruption Progress Report 2012 (here), Transparency International noted that Australia had a poor record but now, from 2011, had started to move up the enforcement chart, with its status moving from one of little or no enforcement to moderate enforcement.

It remains a challenge for corporations to balance the ethical demands of regulators with the pursuit of profit. Sustainable growth can be achieved but it requires determination over several years rather than focusing simply on short-term profits and personal remuneration. Transparency and a willingness to expose your internal operations to criticism are a hallmark of credible governance. This has been achieved at least by Rio Tinto and BHP Billiton, two of Australia’s most successful mining corporations, who have been ranked 2nd and 3rd respectively on the Transparency International 2012 Transparency in Corporate Reporting best practice table.

What are the implications for Australia and for business engaged in commercial operations in high risk countries arising out of the latest OECD Report? In summary, while credit has been given to Australia for adopting a robust legal framework, there still remains serious deficiencies in the way in which allegations of foreign corruption are resourced, investigated, prosecuted and sanctioned.  It is these issues that are highlighted by the OECD in its Report.

The OECD Phase 3 Report Findings

The Phase 3 Report has had the benefit of reviewing Australia’s activity on the foreign corruption front for nearly 13 years.

The critical findings of the OECD are as follows:

  • Australia’s enforcement of its foreign bribery laws is still best described as only slightly better than poor;
  • Australia requires a properly coordinated and focused body to investigate allegations of foreign bribery including an expert panel to help advise the AFP;
  • Sufficient inquiries must be made before the AFP rejects an allegation for full investigation, including considering bribery-related charges such as false accounting and money laundering, in circumstances where there may not be sufficient evidence to support a foreign bribery offence;
  • The penalties for foreign corruption and financial misreporting should be significantly increased;
  • Despite efforts to raise awareness about the risks associated with facilitation payments, there is still substantial confusion over the scope of this defence and companies should be encouraged to prohibit absolutely or discourage the use of facilitation payments;
  • A clear framework is required to ensure transparency and consistency for companies who self-report potential corrupt conduct including the nature and degree of cooperation expected by the AFP or the CDPP and what credit is provided for that cooperation;
  • Awareness of foreign bribery risks and the development and implementation of anti-bribery corporate compliance programmes is generally inadequate which is putting many companies who conduct overseas business at risk;

The impact of the OECD findings for Australian Business

The findings of the OECD highlights that foreign bribery remains a real and measurable risk for companies operating offshore and that the Australian Government and the AFP are being encouraged to move towards having a dedicated team of investigators and prosecutors which, if properly resourced, is likely to result in a greater range of investigations and an increased likelihood of some form of prosecution.

Of particular interest to companies is the OECD recommendation that Australia should increase all applicable penalties for accounting related offences so that if an individual has not technically committed a bribe overseas, he or she is much more likely to be exposed to a significant financial penalty (aside from the threat of imprisonment), for example, for misleading accounts or false statements under Australian domestic criminal law.

Companies should understand that the OECD has recommended a much greater focus on corporate prosecutions.  This in turn will require companies to proactively understand the risk environment in which they operate, to ensure all of their employees and agents are properly trained and that a record of this compliance activity is kept in order that a defence of appropriate due diligence can be made out.

Overall, while Australia’s legal framework has been commended by the OECD, if the Report’s recommendations are accepted, there may be a much greater focus on strengthening the law and penalties that will be applied to companies and individuals who engage in foreign bribery overseas or bribery-related offences under Australia’s domestic criminal and civil laws.

Summer Reading Spectacular

Friday, July 13th, 2012

Grab your beverage of choice, find some shade, and sit back and enjoy the recent work product of FCPA Inc – plus the recent annual report of the OECD Working Group on Bribery.

Gibson Dunn

Gibson Dunn recently released it 2012 mid-year FCPA update (see here).  The update begins as follows.   “As the Foreign Corrupt Practices Act turns 35 years old, the spike in enforcement activity that we first observed five years ago appears (at least for the moment) to be leveling off. Nevertheless, numerous developments this year bespeak a statute that is maturing rather than falling into obscurity: the first sustained pattern of trial activity; increasing “private attorney general” enforcement; and serious policy debates between industry, executive, and legislative interests leading up to much-anticipated statutory guidance from government regulators. The first half of 2012 was packed with important FCPA developments.”  Thereafter, the update is a buffet of useful information and summaries including recent sentencing activity, a discussion of FCPA-related civil litigation, legislative and policy developments, U.K. developments, and a handy chart containing DOJ and SEC statements on corporate cooperation.

Another Gibson Dunn update you should read concerns NPA and DPAs.  The firm recently released (here) its mid-year update on corporate deferred prosecution and non-prosecution agreements.  As noted in the update, once again among the most frequent use of such agreements is to resolve FCPA enforcement actions.

Speaking of NPAs and DPAs, Law36o carried an article yesterday titled “DOJ Develops a Taste for Deferred Prosecution Deals.”  I liked what Skadden partner John Carroll (here) had to say – that such agreements are a “way for the government to outsource its work and harvest relatively easy settlements” because “the government only has to win the case in the government’s office; it doesn’t have to win in the courtroom.”

Miller Chevalier

Miller & Chevalier recently released its FCPA Summer Review 2012 (see here).  The review begins as follows.  “‘Expectant’ describes the mood of FCPA practitioners during the first half of 2012. With a slow first half of the year for enforcement releases, and expected developments such as the issuance of the new FCPA Guidance around the corner, the second half of 2012 should be eventful, if not historic, for the 35-year old statute.”  Thereafter, the review contains several goodies such as a chart containing known declinations in FCPA investigations 2008 to the present, “comings” and “goings” in the DOJ’s FCPA team, and how a recent district court rulings(discussed in this previous post) appears to have impacted the deferred prosecution agreement in the recent Data Systems enforcement action (see here for the previous post).

Debevoise & Plimpton

Debevoise & Plimpton recently released its periodic FCPA Update (see here).  Among other things, the update contains an article on the “current status of the ‘selective waiver’ doctrine, i.e., the notion that a waiver of attorney-client privilege or work-product protection in a submission to the government is not a ‘waiver to all others.’”  As the article notes, this is often an issue for counsel to consider in FCPA investigatons when disclosing to the DOJ or SEC.

Sidley Austin

Sidley Austin recently released its anti-corruption quarterly (see here).  Although the quarterly did not include a certain FCPA related development from the second quarter, it did contain an informative lead article concerning FCPA joint venture liability.

OECD Annual Report

The OECD Working Group on Bribery recently released its annual report (here).  Spectacular it is not.  For all the good the OECD does in raising awareness of bribery and its effects and seeking to reduce bribery and corruption around the world, its enforcement statistics remain misleading, incomplete and in some cases inaccurate.

For instance, as noted in this prior post, it is fairly obvious why OECD member countries have varying degrees of enforcement of bribery and corruption offenses.  Among other reasons, in most OECD member countries, prosecuting authorities have two choices – to prosecute or not to prosecute – there is no such thing as non-prosecution or deferred prosecution agreements.  Moreover, in many OECD member countries there is no such thing as corporate criminal liability – or even if there is – such corporate liability can only be based on the actions of high-ranking executives or officers. This of course is materially different than the U.S. respondeat superior standard in which a business organization can face legal liability based on the actions of any employee to the extent the employee was acting within the scope of his or her duties and to the extent the conduct was intended to benefit, at least in part, the organization.

The OECD’s statistics as to the U.S. are incomplete.  Footnotes in the report state that DOJ and SEC enforcement actions “exclusively for violations of the books and records and internal control provisions of the FCPA” are not captured.  This misses a meaningful chunk of FCPA enforcement actions as it is common for the DOJ and SEC to structure settlements (so as to avoid collateral consequences or to reward cooperation or both) without charging FCPA anti-bribery violations (such as in Siemens and Daimler).

Moreover, the OECD statistics as to the U.S. are inaccurate in some cases.  In a table “Decisions on Foreign Bribery Cases from 1999 to December 2011,” in a column titled number of individuals and legal persons acquitted / found not liable, the report indicates that only 1 individual or legal person has been acquitted or found not liable in a U.S. foreign bribery case.  Not true.

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A good weekend to all.

The U.K. OECD Phase 3 Report

Monday, June 11th, 2012

The OECD recently released its ”Phase 3 Report on Implementing the OECD Anti-Bribery Convention in the United Kingdom” (see here for the report).  As stated by the OECD (here) “the purpose of Phase 3 is to maintain an up-to-date assessment of the structures put in place by Parties to the OECD Anti-Bribery Convention to enforce the laws and rules implementing the Convention and the 2009 Recommendations.”

This post provides a brief overview of certain issues in the report.

In the report, the U.K. was generally commended for the increase in enforcement of its foreign bribery laws in recent years.  In addition, the report notes that, as of January 31, 2012, the SFO indicated “it had 11 active bribery / corruption cases and a further 18 cases under consideration.”

The U.K. received high marks “for publishing guidance to commercial organizations which led to the entry into force of the Bribery Act”(see here for the guidance).  With the U.S. eagerly anticipating DOJ guidance as to the FCPA and with some viewing the upcoming guidance as a panacea for many of the issues in this new era of FCPA enforcement, it is noteworthy to observe that the U.K. report states that guidance does not have the force of law, is not binding on prosecutors or courts, and that judges consulted during the OECD visit stated that the guidance was not issued by Parliament and is thus of comparable authority to an academic text.

In the report, the U.K. also received high marks for its ”recent significant increase in foreign bribery enforcement actions” and was urged to “sustain these efforts.”  However, the report notes that the lead examiners were “concerned over certain aspects of the U.K.’s foreign bribery enforcement framework.”

For instance, the report is critical as to the transparency of enforcement.  The report states “in some cases it is unclear how the amount of the penalties agreed between the SFO and the defendant was arrived at” both in terms of criminal actions and civil recovery orders under the Proceeds of Crime Act 2002.

As to the latter, the report states as follows. ”Unlike a criminal plea agreement, there is no court hearing.  A judge does not assess the factual basis of the order, or determine the amount that the defendant should pay.”  The report further states that “the disadvantage of reduced judicial scrutiny is that there is even less transparency with consent civil recovery orders than cases resolved through criminal plea agreements.”  The report notes that in response, the SFO said that “it is unable to disclose more information in some cases because the settlement agreement includes confidentiality clauses.”  According to the report, “the SFO further argued that civil settlements ‘are by their very nature private disputes between the parties and the information disclosed by one side to the other is confidential.’”  As to this argument, the report notes as follows.  “However this overlooks the fact that the conduct underlying these consent civil recovery orders is foreign bribery and related misconduct.  These are therefore not private disputes but criminal matters about which the public has an interest and a right to be fully informed.”  In short, the report states as follows.  “The lead examiners are extremely concerned that many key details about the SFO’s civil settlements of foreign bribery cases remain private.  [...]   The settlement process is opaque, lacks accountability, and thus fails to instill public and judicial confidence.”

Another notable aspect of the OECD Phase 3 report is in reference to the SFO’s recent demonstrated committment, particularly leading up to the Bribery Act going live in July 2011, of active engagement with the business community on risk management and prevention.  The report references prior SFO statements that its ”emphasis is on helping corporations to develop [a modern corporate] culture and to use enforcement actions only where this is necessary and proportionate.”  The report further noted that in the U.K.’s questionnaire responses that the priority for small and medium sized enterprises is not enforcement, but raising awareness of what is needed to build an anti-corruption corporate culture.”  As to this approach, the report states that ”the SFO’s policy on giving advice to rather than prosecuting companies is consistent with prioritizing corruption prevention over enforcement.”  The report further states as follows.  “The lead examiners consider that preventing corruption and promoting an anti-corruption corporate culture are equally important as criminal investigations and prosecutions.”

The U.K. Phase 3 report has much in common with the October 2010 U.S. Phase 3 report (see here for the prior post).  In both reports, the countries are loudly praised for the high level of enforcement (as in the case of the U.S.) or the increase in enforcement (as in the case of the U.K.).  Yet both reports also quietly criticize and question many of the policies which yield the high level or increased level of enforcement and a common thread in both reports is the general lack of transparency, judicial scrutiny, and accountability in many enforcement approaches.

Hit And Misses

Tuesday, May 15th, 2012

Recently on his Forbes column (here), Howard Sklar paused to rethink some of his FCPA positions based on my recent post (here) and this recent article by former Attorney General Michael Mukasey.  On the theory (perhaps presumed) that others derive value from FCPA Commentariat (that’s Howard’s term, not mine) debates, this post discusses Howard’s hits and misses and encourages him to keep rethinking.

I agree with Howard (in fact, I know from my prior FCPA practice experience) that DPAs and NPAs seldom tell the complete story.  This truism seems to give Howard comfort that perhaps all DPA and NPAs represent actual, provable FCPA violations notwithstanding the conduct actually set forth in the resolution documents.  However, this truism causes me discomfort because, based on my experience, for every aggravating fact left out of the resolution documents there are also frequently two mitigating facts left out of the resolution documents.

Howard is spot on though when he says that “the DOJ must realize that the information they disclose forms the enforcement record they have to defend.”  Criticism as to the actual facts and conduct the DOJ sets forth in an NPA or DPA - and the resulting analysis as to the ultimate issue of whether the conduct actually violates the FCPA – are problems entirely of the DOJ’s own making.

Why?

Because the DOJ encourages those subject to the FCPA to look to these documents as evidence of conduct violating the FCPA and for guidance as to enforcement theories.  In “The Facade of FCPA Enforcement” (here at pgs. 998-1000) I called this the “absurdity of FCPA caselaw.”  For instance in this GAO report (Appendix III), the DOJ explained, in its view, why NPAs/DPAs ”are beneficial” including that “DPAs and NPAs benefit the public and industries by providing guidance on what constitutes improper conduct.”  Furthermore, in the aftermath of the November 2010 Senate FCPA hearing, the DOJ was asked various ways about FCPA uncertainty and lack of guidance. The DOJ responded (see here) that it “provides clear guidance to companies with respect to FCPA enforcement through a variety of means” including “charging documents, plea agreements, deferred prosecution agreements and non-prosecution agreements, press releases, and relevant pleadings and orders.”  The DOJ stated that “these documents are lengthy and detailed.”  You might want to re-read the Lufthansa Technik NPA (here) at this point – the last words that should enter your brain are lengthy and detailed.

Howard next admits to his “true bias” (as a former SEC attorney) and is confident in his ability to size up people and is confident that prosecutors would never bring bad cases even if the “asynchronous information can make it seem that way.”  I’ll let Judge Richard Leon and Judge Alex Kozinski respond to that issue.  When granting the DOJ’s motion to dismiss the Africa Sting cases, Judge Leon spoke of how prosecutors can become ”so convinced of the righteousness of their position.” (See here for the prior post).  As noted in this recent post, the Ninth Circuit recently addressed the DOJ’s “trust us” position and stated as follows.  “The government assures us that, whatever the scope of the CFAA, it won’t prosecute minor violations.  But we shouldn’t have to live at the mercy of our local prosecutor. [...] And it’s not clear we can trust the government when a tempting target comes along.”

Howard next asserts that despite the temptation DOJ prosecutors may have to resolve cases via an NPA vs. doing nothing, he “suspects that is less of a problem that you’d think.”  Credible evidence suggests otherwise.  See e.g., Peter Spivak & Sujit Raman, Regulating the ‘New Regulators’:   Current Trends in Deferred Prosecution Agreements, 45 Am. Crim. L. Rev. 159, 176 (2008) (“we heard from colleagues in the defense bar of prosecutors who, in their haste to compel the company’s cooperation in pursuit of individuals, have pressed the entity to enter into a diversion agreement before any particular’s guilty could definitely be established).  Even Mark Mendelsohn (former DOJ FCPA unit chief) has indicated that a ”danger” with NPAs and DPAs ”is that it is tempting” for the DOJ “to seek to resolve cases through DPAs or NPAs that don‟t actually constitute violations of the law.”  See Corporate Crime Reporter, Sept. 13, 2010.

The clincher, in Howard’s mind, that NPAs and DPAs have never been used to resolve cases that do not actually represent FCPA violations seems to be this – he has not heard any complaint “from any practitioners, on or off the record, in public or in private” of this being the case.

There is a very simple explanation for this.  These resolution vehicles muzzle the companies and their defense counsel.  The following template clause (from the recent BizJet International DPA – here) is common.

Public Statements by BizJet

BizJet expressly agrees that it shall not, through present or future attorneys, officers, directors, employees, agents or any other person authorized to speak for BizJet make any public statement, in litigation or otherwise, contradicting the acceptance of responsibility by BizJet set forth above or the facts described in the attached Statement of Facts.  Any such contradictory statement shall, subject to cure rights of BizJet described below, constitute a breach of this Agreement and BizJet thereafter shall be subject to prosecution as set forth in [this] Agreement.  The decision whether any public statement by any such person contradicting a fact contained in the Statement of Facts will be imputed to BizJet for the purpose of determining whether they have breached this Agreement shall be the sole discretion of the Department.

No FCPA lawyer representing a company party to an FCPA NPA or DPA is going to risk breaching the agreement just to make a splash on the FCPA conference circuit.

Another template clause in such resolution vehicles (as in the recent BizJet DPA) is the requirement that the company “shall first consult” with the DOJ to see if it has any objection before the company issues a press release or holds a press conference in connection with the resolution.

As noted in this prior post, when the U.K. Serious Fraud Office inserted such language into its Innospec settlement, 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.”

Finally, the least persuasive of Howard’s points in favor of NPAs and DPAs is that without such agreements “our lowered enforcement would reflect in international efforts as well” and that Russia ”would certainly not take its responsibilities seriously – if it saw reduced enforcement in the U.S.”

I take Howard’s point and on this issue I largely blame civil society and monitoring organizations (who do good work in other areas) but put out misleading report cards when it comes to enforcement statistics.  For instance, as noted in this prior post concerning the OECD’s Phase 3 Review of the U.S., one of the many ironies of the review was that while loudly praising the U.S. for its “high level” of enforcement, the Report quietly criticized and questioned many of the policies and enforcement theories which yield the “high level” of enforcement.  More to the point, the OECD noted ”one of the reasons for the impressive FCPA enforcement record in the U.S.” is the use of NPAs and DPAs,  yet the report noted that these agreements are subject to little or no judicial scrutiny.

It is plainly obvious (as noted in this prior post) that a reason (there are other reasons as well noted in the post) for the divergent level of enforcement in OECD countries is due to the fact that, to the best of my knowledge, only the U.S. has three options in “prosecuting” such cases:  charge, don’t charge, or use an NPAs or DPA.  Given the, what at times seems like a new “global arms race” to see which country can move up the enforcement score cards, other countries – most notably the U.K. – want these agreement as well.  However, this is all the more reason to get things right in this country least our “facade of FCPA enforcement” be further exported.  Quality should matter more than quantity when it comes to criminal law enforcement.

Keep rethinking Howard.