Celebrating 10 years! 2007-2017

DoJ is in business of certifying corruption

FCPA investigations were uncovering misconduct in years lead triplesix09/07/17
I like that blog, though not sure what the propel is from th fompliance209/08/17
Bribes don't give themselves but I digress... DoJ is does n triplesix09/08/17
This, in a nut shell, is the difference between a "complianc onehell09/08/17
triplesix (Sep 7, 2017 - 7:32 pm)

FCPA investigations were uncovering misconduct in years leading up to 2016. This happened despite the shady tactics employed by the law firms to withhold "bad" documents, including misapplication of privilege, staffing decisions, "massaging" of translations. There is also issue of whistle blowers and witnesses being located in exotic locales where they would certainly come under duress. And even despite all of this voodoo, multinationals could not get a break.

In 2016, the big break came. The DoJ introduced the Pilot Program to ensure a robust and transparent enforcement targeting FCPA violations. The Program was deemed a success and extended through 2017. Under the Program, MNEs are able to resolve FCPA violations through disclosure and cooperation under more favorable terms and "streamlined" process.

It appears that under this new program government stopped prosecuting and is just collecting rent:

"In September 2016, however, the DOJ announced that it was providing two different private companies with declinations regarding potential FCPA liability, but required that the two companies disgorge their profits to the Department of Treasury.

These cases represented the first “declinations with disgorgement” that had ever been granted by the DOJ in FCPA enforcement.

Within the past few months, the DOJ has awarded declinations with disgorgement to another two private companies."

While some might see this as an extortion of MNEs that are merely doing what is customary when conducting business abroad. What seems to be lost in this analysis are the goals of FCPA to combat corruption and the people in those exotic locales are the paying for this whole charade. Of course, there is no shortage of SCUMPROFS to defend MNEs, as the link blow shows.

It appears that the DoJ does not care to enforce FCPA and would rather just tax the activity, thereby certifying foreign corruption under US law. Good for US taxpayer, bad for US image aboard that has already been extensively criticized even before the Pilot Program and the pseudo taxation charade. On the positive note, anti-corruption business good is good and other major western players are eager to get in.

Hence, DoJ is in the business of certifying corruption and MNEs are eager to pay.



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fompliance2 (Sep 8, 2017 - 6:32 am)

I like that blog, though not sure what the propel is from this post , personal liability? I am
Not a big fan of personal liability in Fcpa cases
On another note the Fcpa suffered quite a bit with the loss of Hui Chen

Do agree that Fcpa attorney/compliance work is on the up for the last 2-3 years

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triplesix (Sep 8, 2017 - 9:04 am)

Bribes don't give themselves but I digress...
DoJ is does not hold comapnies accoutable for misconduct so they should start there.

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onehell (Sep 8, 2017 - 1:04 pm)

This, in a nut shell, is the difference between a "compliance" mindset and a "legal" mindset. The whole idea of the compliance program (which comes from the federal organizational sentencing guidelines) is that if you have an effective compliance program which, after appropriate internal investigation, "responds appropriately" to the discovery of criminal conduct then the remedy can look more like actual damages than punitive measures against the company and/or its execs.

To compliance people and many OIGs and such, this idea demonstrates an organization's commitment to ethics. Lawyers, OTOH, are trained in an adversarial system. It is in their DNA to think that the company should try to protect itself and an equally powerful opponent should investigate it. The relationship with the regulator should be adversarial and they are instinctively suspicious if it isn't. That's the sentiment expressed in the OP.

But that's the fundamental difference in how these two different professions are trained to think. Lawyers see the relationship with the regulator as adversarial and become suspicious if it is otherwise. Compliance people, in theory at least, are supposed to be MUCH more open with regulators than lawyers can usually stomach.

A lot of lawyers seem to want compliance jobs these days, but I think they need to understand this fundamental distinction before looking at taking that plunge. If you think that leaders of large organizations are inherently psychopathic and will therefore use compliance programs just to reduce penalties and allow illegal conduct to continue, then you'll probably never understand the relationship that is supposed to exist between regulators and compliance people.

Regulators understand this cultural disconnect, and that's why they are inherently suspicious of lawyers as compliance officers. Their ability to gather facts, read and explain and interpret rules can be helpful, but their adversarial mindset and suspicion of cooperative relationships has to be unlearned. This is a frequent hot topic at compliance conferences all over the place.

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