True story.

A friend was recently having lunch with his friend (let’s call this individual the “Person”).  The Person is in a senior position at a high-profile U.S. government department.  Discussion turned to the Foreign Corrupt Practices Act.  Discussion then turned to this website.  The Person said that he reads FCPA Professor, but joked that the website should be called “Anti-FCPA” Professor.  This is a bit ironic given that the Person’s current employer was steadfastly against the FCPA ever becoming law.  (See here for my article “The Story of the Foreign Corrupt Practices Act”).

While grateful to hear that my website is read at high levels, I was equally disappointed that the Person is misinformed as to my clear and often articulated positions.

So I use this post to once again articulate my positions and to further discuss what I see as a growing, yet troublesome, trend.

Since launching this website in July 2009, I have consistently stated (see here for the first instance) that “the FCPA is a fundamentally sound statute when enforced by DOJ/SEC in a way that is consistent with Congressional intent.”  In my 2010 Senate FCPA testimony I again stated that ”the FCPA is a fundamentally sound statute that was passed by Congress in 1977 for a specific reason.”  In this post, I stated that ”the FCPA is a fundamentally sound, but not perfect, statute.” In this Q&A, I stated as follows. ”The FCPA is a fundamentally sound statute that was rightly passed by the U.S. Congress in 1977.” In this post, I stated as follows.  “I firmly believe that the FCPA, if enforced consistent with its statutory terms and consistent with legislative intent, is a fundamentally sound statute.”

In fact, when others have suggested that the FCPA ought to be repealed (see here for a prior post), I said that this was taking FCPA reform too far and again said that the ”FCPA is a fundamentally sound statute that was passed by Congress for a valid and legitimate reason.”  Just last month, in this post regarding FCPA reform, I likewise stated that “the FCPA is a fundamentally sound statute.”  Still in doubt as to my position on the FCPA?  You can watch this October 2012 interview.

In short, the suggestion that I am anti-FCPA is just plain wrong.

That the FCPA is a fundamentally sound statute, does not mean that the FCPA could not be improved, and I have suggested limited FCPA reform through a compliance defense (see here for my article “Revisiting a FCPA Compliance Defense”) as well as other reforms (such as abolishing NPAs and DPAs) that would not require amending the law.

There is a difference however between the FCPA (as a law) and FCPA enforcement.  Thus, while I have consistently stated that the FCPA is a fundamentally sound statute, I have likewise consistently stated that FCPA enforcement is not always fundamentally sound.  Indeed, in my Senate testimony I stated as follows.  “That the FCPA is a fundamentally sound statute does not mean that FCPA enforcement is always fundamentally sound.”  I have made this same observation countless other times.

In short, to the misinformed Person (and to perhaps others), my FCPA positions are as follows.

The FCPA is a fundamentally sound statute that was rightfully passed by Congress in 1977 for legitimate and valid reasons.  That the FCPA could be improved through limited reform, does not negate that the FCPA is a fundamentally sound statute.  That the FCPA is a fundamentally sound statute does not mean that FCPA enforcement is always fundamentally sound and it is true that I have expressed criticisms as to how the DOJ and SEC enforce the FCPA, as well as other FCPA or related issues relevant in this era.

I would also like to highlight in this post what I see as a growing, yet troublesome, trend.

There seems to be a trend (and one advanced by many, including civil society organizations and monitoring groups) that more FCPA enforcement is an inherent good regardless of investigative devices, theories of liability, resolution methods, or outcomes.  I reject that trend and consider it troubling.

In 1988 Congress encouraged the DOJ to issue FCPA guidance. It took nearly 25 years, but kudos to the DOJ (and SEC) for finally doing so and collecting in one document information that was previously scattered. In this way, the guidance has substantial value and is easily accessible to anyone.

However, as expected, there is little new information in the guidance to those previously knowledgeable about the FCPA and its enforcement.

It is important for people reading the guidance to understand that it does not represent the “law,” but rather DOJ and SEC interpretations of the FCPA and its enforcement policies and procedures. In many ways, the guidance is an advocacy piece, and in certain instances – such as jurisdictional issues, the business nexus element and others – what the enforcement agencies say in the guidance has been rejected, in whole or in part, by courts.

Although the guidance is a long document at approximately 120 pages, the most important words appear in the footnote which state that the guidance is non-binding and does not in any way limit the enforcement intentions or litigating positions of the DOJ or SEC.

What FCPA enforcement needs at this critical juncture is not non-binding enforcement agency guidance, but limited structural reforms such as a compliance defense and abolition of non-prosecution and deferred prosecution agreements.

This morning the DOJ and SEC released its long-awaited FCPA guidance.

The 120 page “A Resource Guide to the U.S. Foreign Corrupt Practices Act” is here.  A shorter fact sheet is here.  See here for the DOJ’s news release, here for the SEC’s release.

Stay tuned for additional analysis.

Readers may be interested in the following upcoming events.

October 17-19, Washington, DC

ABA – Fifth Annual National Institute on the Foreign Corrupt Practices Act.  See here for complete program details.

Curriculum topics include:  SEC- civil enforcement update: trends and significant developments; compliance and internal investigations:  a case study; the trial of an FCPA case:  pitfalls and pratfalls; and real world application of Dodd-Frank whistleblower protections.

I am pleased to be participating in a panel on Friday, Oct. 19th regarding promises and pitfalls of anti-bribery risk assessment.  The other panelists are Robert Amaee (Covington & Burling, London and the U.K. Expert for FCPA Professor), Tyler Hodgson (Borden Ladner Gervais, Toronto) William Jacobson (Weatherford International) and Joseph Spinelli (Navigant).  The panel will be moderated by Gregory Esslinger (FTI Consulting).

October 27, New York City

The 91st Annual Meeting of the American Branch of the International Law Association (“International Law Weekend”) will take place at Fordham Law School October 25-27.  See here for complete program details.  As evident from the program details, International Law Weekend touches upon a diverse set of legal and policy issues.

On Saturday October 27th a panel discussion will take place titled “Bribery Prosecutions for Profit?  Policy and Practical Implications.”

Bruce Bean (Michigan State University Law School) will chair and moderate the panel and joining me in tackling this provocative issue will be Richard Alderman (former Director of the U.K. Serious Fraud Office), Michael Madigan (Orrick), Kathleen Harris (Arnold & Porter) and Daniel Chow (Moritz College of Law, Ohio State University).

November 15-16, Baltimore, MD

The University of Maryland Francis King Carey School of Law and the Maryland Journal of International Law will host a symposium titled “Extraterritoriality Post-Kiobel:  International & Comparative Perspectives.”  Kiobel refers to the case the Supreme Court recently heard in which an issue is the extraterritorial application of the Alien Tort Claims Act.

The symposium will bring together a diverse group of international lawyers, scholars, and practitioners to critically discuss the issue of extraterritoriality from a range of international and comparative legal perspectives.  The symposium will address four interrelated themes: (1) whether States have jurisdiction under international law to adjudicate civil claims, including transitory tort claims, arising in the territory of foreign States; (2) the impact of the case on related questions involving the extraterritorial application of domestic law and treaty obligations in the ongoing war on terror; (3) Kiobel’s likely impact on wider issues of extraterritoriality and globalization in such areas of law as antitrust, corporate liability and choice of law; and (4) the more enduring significance of the case as a matter of general international legal theory.

I will be presenting on November 16th on a panel concerning “Extraterritoriality in a Globalized World” and will discuss the issue of extraterritoriality in the context of the FCPA.  My presentation and forthcoming paper is titled “The Foreign Corrupt Practices Act, Foreign Actors, and De Facto Extraterritoriality.”

December 10-12, Philadelphia, PA

Pharmaceutical Anti-Corruption Compliance event sponsored by Hanson Wade.  See here for complete program details.

On December 10th, I will conduct a three hour pre-conference workshop titled “What Every Pharma Professional Needs to Know About the FCPA.”  Later in the day, Tom Fox (FCPA Compliance and Ethics Blog) will conduct an additional workshop titled “New Approaches to Creating, Developing and Embedding a Compliance Culture Within Your Organization.”

During the conference, on December 11th, I will present “Understanding the FCPA’s New Era.”

As noted in this prior post “The Origins and Prominence of a Theory,” the pharma industry has been specifically impacted by the enforcement theory that employees of certain foreign health-care systems are “foreign officials.”

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I hope to see FCPA Professor readers at these events.