September 5th, 2014

Friday Roundup

Knox to FCPA Inc., DOJ response brief filed, SFO speeches, and asset recovery.  It’s all here in the Friday roundup.

Knox to FCPA Inc.

As highlighted in this prior post, over the summer Jeffrey Knox (DOJ Fraud Section Chief) followed the same tired script on a number of FCPA issues.  It will be interesting to hear / read of Knox’s positions in the future as – following a well-traveled career path for DOJ FCPA enforcement attorneys – he is leaving government service for the private sector to provide FCPA investigative and compliance services to business organizations subject to the current era of FCPA enforcement.  (See here from the Washington Post, here from the Wall Street Journal, and here from the New York Times).

Knox is headed to Simpson Thatcher (also home to former SEC FCPA Unit Chief Cheryl Scarboro – see here for the prior post). This Simpson Thatcher release states in pertinent part:

“Mr. Knox will be a partner based in the Firm’s Washington, D.C. office and a member of the Firm’s Government and Internal Investigations Practice. During his tenure at the DOJ, Mr. Knox served as the Chief and, before then, the second-ranking official of the Criminal Division’s Fraud Section, which has responsibility for some of the nation’s most significant fraud cases, including … Foreign Corrupt Practices Act (FCPA) criminal investigations and prosecutions in the United States.”

[...]

“We are pleased to welcome Jeff back to the Firm,” said Bill Dougherty, Chairman of Simpson Thacher’s Executive Committee. “His deep experience in overseeing high-stakes government investigations and enforcement actions will be a significant asset to our clients as they navigate an increasingly complex enforcement landscape.” “We are very excited that Jeff is joining our Government and Internal Investigations team here at Simpson Thacher. As Chief of the Fraud Section, Jeff has presided over many of the most significant financial fraud, healthcare fraud, and FCPA investigations in recent years, and we know that he is greatly respected within both the DOJ and the white collar bar. His experience and insight will provide substantial value to our clients,” added Mark J. Stein, Head of the Firm’s Government and Internal Investigations Practice.”

The release further states: “[Knox] was a contributor to the DOJ and SEC’s A Resource Guide to the FCPA, published in 2012.”

As I have done in all previous instances of high-ranking DOJ or SEC FCPA enforcement attorneys leaving government services for lucrative FCPA related jobs in the private sector (see here for instance), I will restate my position.

As to DOJ and SEC FCPA enforcement attorneys who have supervisory and discretionary positions and articulate government FCPA policies, it is in the public interest that such individuals be prohibited, upon leaving government service, from providing FCPA defense or compliance services in the private sector for a five-year period.

DOJ Response Brief Filed

This previous post highlighted the motion to dismiss filed by former Alstom executive Lawrence Hoskins in the criminal FCPA action against him.  In short, the motion to dismiss stated that the DOJ’s indictment “charges stale and time-barred conduct that occurred more than a decade ago; it asserts violations of U.S. law by a British citizen who never stepped foot on U.S. soil during the relevant time period; and, it distorts the definition of the time-worn legal concept of agency beyond recognition.”  As noted in the prior post, much of Hoskins’s brief focuses on the issue of whether he withdrew from the alleged criminal conspiracy involving alleged improper payments at the Tarahan power plant project in Indonesia.

Earlier this week, the DOJ filed this response brief.  In pertinent part, the DOJ’s brief states:

“The defendant seeks to have the Court take the extraordinary step of dismissing the Indictment against him at this pretrial phase based on his interpretation of the legal import of  certain allegations contained in the Indictment, supplemented by his own selective version of events contained in an affidavit attached to his motion. The Indictment, however, sets forth more than sufficient facts to support the charged crimes. Moreover, at trial the Government expects to present substantial additional evidence supporting the charges, including facts that bear directly on the arguments raised by the defendant in his motion. The defendant’s motion thus represents a novel effort to – in effect – invent and obtain summary judgment in the criminal process based on the claim that he has established the factual basis for his defenses. For good reason, the law provides that only after the Government has presented its case should a judge and jury grapple with the legal and factual sufficiency of that evidence. Thus, the defendant’s motion should be denied. Even addressing the merits of his arguments at this premature stage, however, the defendant’s motion should fail.

In particular, the defendant’s motion fails because: (1) the issue of withdrawal is necessarily a factual one to be decided by a jury and, nonetheless, the defendant did not withdraw from the charged conspiracies; (2) the Indictment has adequately alleged, and the Government will prove at trial, that the defendant was an “agent” of a domestic concern under the Foreign Corrupt Practices Act (“FCPA”), the charged conduct is domestic (not extraterritorial), and Congress has not specially excepted the defendant from prosecution under the FCPA and, thus, he can be liable for causing, aiding and abetting, or conspiring to commit an FCPA violation even if he is not guilty as a principal; and (3) the Indictment alleges continuing transactions (the bribe payments) that were initiated from Connecticut and alleges that the defendant aided and abetted the transactions through acts in Connecticut, and thus the money laundering charges are properly venued in the District of Connecticut.”

SFO Speeches

David Green’s (Director of the U.K. Serious Fraud Office) recent speech regarding a “cross-section of SFO cases” included the following in the foreign bribery space:

  • Barclays/Qatar: is an investigation, begun in 2012, into the circumstances surrounding Barclays’ £8bn recapitalisation in 2008.
  • Rolls Royce: concerns allegations of bribery carried out by local agents in return for orders in various markets, touching several divisions of Rolls Royce business activity.
  • GlaxoSmithKline: this is an investigation into allegations that bribes were paid in order to increase business in several jurisdictions.
  • GPT: this investigation concerns a subsidiary’s business relationship with the Saudi National Guard.
  • Alstom: this is an ongoing investigation into the use of British subsidiaries of a major French multinational to dispense bribes in several jurisdictions in order to secure large infrastructure contracts. Charges have already been laid against a subsidiary.
  • The Sweett Group: this investigation concerns allegations of bribes paid in return for building contracts in North Africa.

For another recent speech by Alun Milford (General Counsel of the SFO) on cooperation and disclosure, see here.

Asset Recovery

In news related to the DOJ’s Kleptocracy Asset Recovery Initiative (under which prosecutors in the DOJ Asset Forfeiture and Money Laundering Section work in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption – see this 2009 post highlighting Attorney General Holder’s announcement of the program), the DOJ announced:

“The Department of Justice has seized approximately $500,000 in assets traceable to corruption proceeds accumulated by Chun Doo Hwan, the former president of the Republic of Korea.   This seizure brings the total value of seized corruption proceeds of President Chun to more than $1.2 million.  [...] Chun Doo Hwan orchestrated a vast campaign of corruption while serving as Korea’s president,” said Assistant Attorney General Caldwell.   “President Chun amassed more than $200 million in bribes while in office, and he and his relatives systematically laundered these funds through a complex web of transactions in the United States and Korea.   Today’s seizure underscores how the Criminal Division’s Kleptocracy Initiative – working in close collaboration with our law enforcement partners across the globe – will use every available means to deny corrupt foreign officials and their relatives safe haven for their assets in the United States.”

*****

A good weekend to all.

 

Posted by Mike Koehler at 12:04 am. Post Categories: Asset RecoveryEnforcement Agency PolicyEnforcement Agency SpeechesFCPA Inc.Lawrence HoskinsSerious Fraud OfficeUnited Kingdom




September 4th, 2014

Are You Ready For Some Football? How A Successful Football Organization Can Inform FCPA Compliance In A Business Organization

FBAre you ready for some football? The answer is likely yes as the football season is arguably the most anticipated sports season and one that transforms the weekends of many.

For Foreign Corrupt Practices Act compliance practitioners, understanding the game is not just a professional diversion, but one that can actually add professional value as well.  The reason is because understanding what makes a football organization successful can also inform FCPA compliance in a business organization.

In the spirit of the season, my recent article in Bloomberg BNA’s White Collar Crime Report titled “How a Successful Football Organization Can Inform FCPA Compliance In a Business Organization” highlights four attributes of a successful football organization that can also elevate FCPA compliance in a business organization.

Click here to download the article.

Posted by Mike Koehler at 12:02 am. Post Categories: ComplianceFCPA Scholarship




September 3rd, 2014

Gifts And The “Bribery Gaze”

[I originally published this post as a book review on Criminal Law and Criminal Justice Book (a joint project of Rutgers School of Law-Newark and Rutgers School of Criminal Justice) and it is republished below with permission.]

Throughout human history, gifts have been a respected and legitimate form of gratitude and generosity, serving as a social glue important to any cohesive society. Yet at the same time, gifts have been offered to seek influence, have compromised the integrity of the gift recipient, and have thus represented a form of bribery.

These divergent realities are the subject of Professor Malin Akerstrom’s engaging new book “Suspicious Gifts.” Professor Akerstorm, a Swedish sociologist by discipline, examines the everyday dilemmas faced by low-level professionals working in the public sector and the business persons who interact with such public officials to chart the ambiguity between legitimate gifts and illegitimate bribery.

Acknowledging the corrupting power of gifts, Professor Akerstrom is nevertheless critical of contemporary anticorruption efforts that seemingly label all gifts as blameworthy or even criminal. Invoking the phrase the “bribery gaze” on a number of occasions, Professor Akerstorm highlights the following warnings found in anti-corruption literature.

  • When you want to display hospitality – it could be bribery!
  • When you want to be generous – it could be bribery!
  • When you want to be friendly – it could be bribery!
  • When you take self-promoting measures – it could be corrupt marketing!
  • When you allow yourself to be invited – it could be a bribe!
  • When you accept a present or prize – it could be a bribe!
  • If you don’t say no thanks or decline a perk in time – it could be corruption!

These circumstances, of course, are not academic, but present in real-world bribery enforcement actions. While the Swedish examples Professor Akerstrom highlights may be foreign to most readers outside of that region, gifts are also frequently alleged as bribes in U.S. Foreign Corrupt Practices Act enforcement actions. For example, recent FCPA enforcement actions have involved: flowers, cigarettes, bottles of wine; karaoke bars; and tea sets.

As Professor Akerstrom rightly notes however, the current “bribery gaze,” in which everything seems to be transformed into a hazard, a trap or criminal bribery, is not without social and public policy consequences. She persuasively argues:

“Campaigns to eliminate these gift exchanges are at the same time campaigns to restrict the gamut of courtesy or ritual exchanges. The manifestations of courtesy, gratitude, and social bonds, which are so important as social glue in any cohesive society, are not just called into question, but criminalized.”

In this new era of enforcement of bribery and corruption laws, many are pounding the table for more enforcement, as if the quantity of enforcement was an inherent good regardless of enforcement theories, resolution vehicles, or collateral social and public policy considerations.

Regarding gifts as a form of bribery, Professor Akerstorm asks, “should the ideal society be gift-less?” With the current “bribery gaze,” expanding theories of enforcement, and risk-averse business organizations responding by eliminating most forms of gratitude and generosity, this appears to be where the winds are blowing.

Yet in “Suspicious Gifts” Professor Akerstorm reminds those in the anti-corruption space – whether practitioner, policy-maker or scholar – that bribery and corruption is seldom the simple and safe issue it appears to be at first blush.  

Posted by Mike Koehler at 12:04 am. Post Categories: Cultural IssuesFCPA ScholarshipGifts




September 2nd, 2014

When Worlds Collide: How International Arbitration Deals With Corruption

Today’s post is from Paul Cohen (Perkins Coie).

*****

Regular readers of FCPA Professor can be forgiven for wondering what role anti-corruption laws could possibly play in international arbitration.  The two fields seem, at first blush, to have as much in common as toxic torts law has with trusts and estates.

The reality, however, is that international arbitration practitioners constantly grapple with allegations of bribery and corruption.  If arbitrators resolving these issues get them wrong from time to time, that may be because the FCPA/anti-corruption bar and the great-and-good of the international arbitration world rarely mix.  Indeed, they prefer to treat each other, in Stephen Jay Gould’s phrase about science and religion, as non-overlapping magisteria.

As one of the small number of practitioners with one foot in each field, I’ve tried from time to time to expound on the state of anti-bribery law to my arbitration colleagues.  I’m grateful to Professor Koehler for the invitation to do the reverse here.

International arbitration is a form of dispute resolution between parties from different jurisdictions.  Arbitrators appointed by the parties, rather than courts, decide the issues. Thanks to a 1958 treaty on the recognition of arbitrators’ decisions (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, aka the New York Convention) to which 150 nations subscribe, it is easier to enforce those decisions, known as “awards,” worldwide than it is to have a foreign court judgment recognized and domesticated.  That accounts in large part for international arbitration’s popularity.

Then there is the additional fact that other dispute resolution options prove unpalatable to one of the parties.  In contracts between an American entity and one from, say, one of the BRIC countries, the American entity is unlikely to accept the neutrality or efficacy of the counterparty’s home court for the purpose of dispute resolution.

By the same token, the counterparty will often reject a US court jurisdiction clause, coming as it does with the prospect of extensive discovery, expense, and potentially a jury trial.

These disputes between private parties pursuant to contracts with arbitration clauses come under the rubric of international commercial arbitration.  These arbitrations are often non-public, so information about them is often incomplete.

There is a second, and increasingly frequent, species of arbitration that occurs pursuant to trade and investment treaties between nations.  Under these treaties, a private party from one country that invests in the territory of another can arbitrate directly against the other country – no sovereign immunity – if it can allege that the other country violated pertinent terms of the treaty.

To take a (stereo)typical example: if an American oil company invests billions of dollars in oil exploration in Country X, and Country X’s government then nationalizes the oil industry, the American company may have a claim against Country X for expropriation of its assets.  This kind of arbitration is known, intuitively enough, as investment treaty arbitration.

Because these arbitrations involve sovereign nations (and often large, publicly-traded companies), their proceedings and conclusions are better-known and better-publicized.

What does all this have to do with corruption? Increasingly often, one party or another alleges that bribery of some kind played a part in the underlying transaction on which the arbitration turns.  Perhaps that should not come as a huge surprise: a plurality of arbitrations involve energy and mineral resources in places that would be considered the usual suspects in any corruption survey.

Moreover, with the number of arbitrations on a steady upswing and allegations of corruption showing no sign of abating, look for more opportunities for these two traditionally distinct fields to overlap and interact.

These issues first appeared in arbitration more than half a century ago.  At the time, “consulting” agreements with third parties – the kind we warn clients today are red flags in international business transactions – were commonplace for companies seeking to do business with sovereigns and state-owned entities.  Occasionally, parties to these agreements decided that they would renege on their arrangements with the “consultants.”  They then found themselves in arbitration for breach of contract.

In one such dispute, an engineer with close connections to Argentina’s Peron regime brought arbitration against a British electrical manufacturer looking to sell equipment to Argentine power plants.  It was self-evident that the agreement between the engineer and the electrical manufacturer was effectively a vehicle to funnel corrupt payments to Argentine decision-makers.

The arbitrator hearing the case rejected the claim.  He stated:

“[T]here exists a general principle of law recognised by civilised nations that contracts which seriously violate bonos mores [good morals] or international public policy are invalid or at least unenforceable and that they cannot be sanctioned by courts or arbitrators [...] [P]arties who ally themselves in an enterprise of the present nature must realise that they have forfeited any right to ask for assistance of the machinery of justice (national courts or arbitral tribunals) in settling their disputes.”

Note that this decision came in 1963, fully 14 years before the enactment of the FCPA.  Bribing foreign officials was not yet a crime in the US or elsewhere, but that did not make contracts for which the very purpose was corrupt enforceable.

Several arbitral decisions followed in similar vein.  All of them dealt with the issue of whether arbitrators could enforce contracts that effectively rewarded a party for funneling bribes to foreign officials.  All of them agreed that they could not.

This left open a separate question: what happened when parties arbitrated in a case where there may have been corruption in the original transaction?  For example, going back to our original hypothetical about an American oil company in Country X: if it transpired that the oil company had secured a concession to drill for oil through a bribe two decades earlier, how might this affect the arbitrators’ consideration of the oil company’s expropriation claim?

The answer seems to be that arbitrators will acknowledge that the contract itself is legitimate, despite having been procured by bribery, but that they will not award any damages to a party involved in the bribery.  But because of the reasons arbitrations arise in the first place, the practical effect of this distinction is that sometimes states and state entities get a free pass when they misbehave.

That is what happened in the case of Siemens and Argentina.  Siemens had won $200 million in an investment treaty arbitration after a tribunal adjudged that Argentina had expropriated Siemens’ assets in that country.  That was in early 2007.  As every FCPA practitioner knows, Siemens subsequently admitted to having engaged in large-scale bribery of foreign officials, including in Argentina.  Siemens discontinued efforts to enforce the arbitral award. Argentina effectively walked away $200 million better-off.

The other (in)famous example involves the Government of Kenya in an arbitration against the World Duty Free company.

World Duty Free had contracted to build a duty free outlet at the Nairobi Airport.  The company was implicated in a fraud involving the President’s re-election campaign.  The Kenyan Government froze World Duty Free’s assets and transferred its shares to a different owner.  World Duty Free later proved that the fraud allegations had been false, but by then the damage had been done.

The company brought an arbitration against Kenya pursuant to the contract Kenya had signed with it to build the duty free facility.  During the arbitration proceedings, it came to light that World Duty Free’s principal had made a “personal donation” to the President of Kenya, consisting of $2 million cash in a suitcase, at the time that the parties were negotiating the contract.

The tribunal concluded that it could not award any damages to World Duty Free under the circumstances.  As a legal matter, that was probably an easy call; as a moral question, it is much more nuanced.  The Kenyan government escaped liability for a wrongful taking; it did so by invoking a transaction in which its own President solicited and received a $2 million bribe (for which, naturally, he was never prosecuted).

The circumstances of the World Duty Free case were unusual: the principal admitted that he had made the “personal donation” to the President of Kenya (although, laughably, he said he did not consider the “donation” to be a bribe); the proverbial suitcase full of cash really was a suitcase full of cash.  This was the territory of truth being stranger than fiction.

In other cases, an allegation of bribery is much harder to prove.  Arbitrators, devoid of subpoena power and without the sanction of criminal prosecution, have been loath to investigate allegations, and likewise leery of concluding that bribes have occurred.  In one arbitration, EDF v. Romania, a Tribunal opined:

“[C]orruption must be proven and is notoriously difficult to prove, since, typically, there is little or no physical evidence. The seriousness of the accusation of corruption in the present case, considering that it involves officials at the highest level of the Romanian Government at the time, demands clear and convincing evidence. There is general consensus among international tribunals and commentators regarding the need for a high standard of proof of corruption.”

Some commentators and practitioners have countered that the “clear and convincing evidence” standard has no place in an arbitration, where criminal or punitive sanctions will not be applied.  Others have suggested that the burden shift to the party alleged to have been involved in corruption once the accusing party has made a prima facie case that something illegal occurred.  Since international arbitrations are not bound by precedent, it is unlikely that there will be consensus on how to approach these allegations.

We have yet to see large investigations arising out of corruption allegations first made in an arbitration.  As noted above, arbitrators are reluctant to read any duty or power to compel investigations in their mandate to decide a case.  Companies implicated in corruption allegations have likewise been slow to conduct independent investigations of any such allegations when they arise in arbitrations.  This may be due to the fact that such independent investigations are relatively recent phenomena outside the United States.

Nonetheless, as the tide of arbitrations shows no sign of waning, and as corruption investigations by non-US regulators gather strength, expect to receive calls from your arbitration colleagues in the future.

Posted by Mike Koehler at 12:03 am. Post Categories: Arbitration IssuesGuest Posts




August 29th, 2014

Friday Roundup

Some reading material to keep you occupied and engaged over the three-day holiday weekend.

*****

This recent Wall Street Journal article is about China’s recent antitrust crackdown, but the same could perhaps be said about China’s recent corruption crackdown against foreign multinationals doing business in China.

“The fact that regulators are going after allegedly dubious practices by multinationals isn’t what bothers trade officials at Western embassies in Beijing, even if they suspect that the probes sometimes have the effect of strengthening Chinese state-owned competitors.

What concerns them the most is the heavy-handed way that investigations are being pursued—and highly charged media coverage that makes for a troubling atmosphere for Western companies.

Foreign executives have learned two early lessons from the antitrust probes. First, the law provides little refuge. The message that the National Development and Reform Commission, the government agency that sets pricing rules, delivers in private to multinationals at the outset of a price-fixing investigation is not to bring in their foreign lawyers, according to numerous accounts by foreign executives, diplomats and lawyers themselves.

The second lesson is connected to the first: Resistance is futile. There’s scant need for lawyers when companies face a choice of either bowing to demands for quick remedies or becoming involved in a protracted wrangle with regulators in what is still a state-dominated economy. In almost every antitrust case launched so far, foreign companies have capitulated without a fight.

Voluntary price cuts of up to 20% are the norm, accompanied by board-level expressions of remorse and promises to do better.

And these cuts are offered at the very outset of investigations—and, sometimes, to get ahead of them. Chrysler described its abrupt decision to slash car-part prices as a “proactive response” to the price-fixing probe as it got under way. These price-fixing investigations have been accompanied by heated nationalistic rhetoric in the state media with antiforeign overtones. Taking down multinationals a peg plays well among the large sections of the public that view them as arrogant.”

*****

The always informative Debevoise & Plimption FCPA Update is particularly stellar this month.  It contains articles about the recent Wal-Mart – investor dispute in the Delaware Supreme Court as well as the recent settlement in SEC v. Jackson & Ruehlen.

Wal-Mart Delaware Action

The Wal-Mart Delaware action remains in my mind much to do about little at least as to the monumental corporate governance issues some had hoped for.

Nevertheless, the FCPA Update makes several valid points about the decision.

“In the wake of Wal-Mart, stockholders in future cases are likely to raise questions about the ways in which investigations have been conducted to see whether those questions also provide a “colorable basis” for seeking a broad range of investigative records. Companies that conduct investigations, therefore, will want to structure the investigation from the outset in a way that limits the ability of shareholders to assert that it was done improperly or otherwise may give rise to any legitimate shareholder concern. This, in turn, will place a premium on early decisions about who should conduct the review, who should supervise the review and the scope of the inquiry. Those decisions, which are generally made before any review has been conducted and based upon limited information, are sure to get close scrutiny from stockholders and should be undertaken with the utmost deliberation and care.”

SEC v. Jackson & Ruehlen

This previous post highlighted the recent settlement in SEC v. Jackson & Ruehlen and noted that the SEC, a law enforcement agency with merely a civil burden of proof, was never able to carry its burden and this was among other reasons why the SEC’s case against Jackson and Ruehlen failed – and yes – this is the only reasonable conclusion to be drawn from the settlement.

The FCPA Update states:

“In the realm of FCPA enforcement, where the vast majority of cases are settled before the filing and litigation of formal  charges, it is often hard to compare the outcomes of early and eve-of-trial or post-trial settlements in any meaningful way. The Noble case, however, provides  a rare opportunity to engage in such a comparison, not only because it was litigated by the SEC farther than almost any other FCPA case has been, but also because it involved both pre-and post-litigation settlements for individual defendants based on charges arising out of the same series of events.

In February 2012, the U.S. Securities and Exchange Commission (“SEC”) charged three executives of Noble Corporation with violating various provisions of the FCPA and related laws in the course of their interactions with public officials in Nigeria’s energy sector. One of these defendants, Thomas O’Rourke, promptly settled with the SEC, accepting permanent injunctions against future violations as to every count on which he was charged, and agreeing to pay a $35,000 civil penalty.

The remaining individual defendants, Mark Jackson and James Ruehlen, decided to litigate. On July 2, 2014 – less than a week before trial was to start and after more than two years of litigation – the SEC settled with these two defendants. Although Jackson and Ruehlen agreed to be enjoined from future violations of the books and records provision of the FCPA, the settlements in their matters were notable in that the vast majority of the charges in the initial complaint, including the bribery charges, were conspicuously absent from the settlements, and no monetary penalties were imposed.

Although the Noble case offers just one data point, the outcomes for the three defendants raise important questions about both the difficulties of litigating these types of cases for the SEC and the potential advantages of declining pre-trial settlement for would-be defendants. In addition, the SEC’s litigation strategy in these cases highlights some possible problems with the expansive interpretation of the FCPA that the SEC and the Department of Justice (“DOJ”) have advanced in recent FCPA cases. These problems, highlighted in the District Court’s refusal to accept the SEC’s interpretation on certain key issues, such as the scope of the facilitation payments exception, as well as the concrete impact of the U.S. Supreme Court’s Gabelli decision (133 S. Ct. 1216 (2013)) in gutting large portions of the SEC’s claims for penalty relief, will doubtless affect future litigation, as well as the “market” for SEC (and in certain respects, DOJ) settlements for years to come. But at the same time, the SEC’s losses on these key issues, which drove the favorable settlements with Jackson and Ruehlen, could well incentivize the SEC to dig deeper, and earlier, for the evidence needed to sustain its burdens in FCPA matters.”

*****

The Economist states – in a general article not specific to the FCPA – that “the [U.S.] legal system has become an extortion racket.” According to the article,

“[J]ustice should not be based on extortion behind closed doors. The increasing criminalisation of corporate behaviour in America is bad for the rule of law and for capitalism.  [...] Perhaps the most destructive part of it all is the secrecy and opacity. The public never finds out the full facts of the case, nor discovers which specific people—with souls and bodies—were to blame. Since the cases never go to court, precedent is not established, so it is unclear what exactly is illegal. That enables future shakedowns, but hurts the rule of law and imposes enormous costs.”

In the FCPA context, see here for my 2010 article “The Facade of FCPA Enforcement.

*****

A series of informative posts here, here, here and here from Thomas Fox (FCPA Compliance and Ethics Blog) regarding risk assessment.

*****

A good weekend to all.

Posted by Mike Koehler at 12:03 am. Post Categories: ChinaComplianceInternal Investigation IssuesJames RuehlenMark JacksonWal-Mart