The Wait Continues for FCPA Guidance from DOJ

Catherine Dunn

Corporate Counsel

11-09-2012

Here at CorpCounsel.com, we’ve been waiting to tell you all about hotly anticipated guidance from the U.S Department of Justice on the Foreign Corrupt Practices Act—the law that prohibits bribery abroad and has led to more than $3 billion in settlements from corporations.

If you’ve also been awaiting the DOJ guidance, the latest news (or lack thereof) is: the wait continues.

So in the meantime, we’re hanging on every word from Assistant Attorney General Lanny Breuer, who earlier this week took the stage at the 13th annual Pharmaceutical Regulatory and Compliance Congress to discuss a “DOJ criminal division update.” The bad news: we can’t get a copy of those remarks from the Justice Department (more on that below). The good news: with the usual hat tip to FCPA Professor Mike Koehler, we got some more insight into this event (not to mention a big dose of the prof’s opinion on it).

First, though, a brief recap: Why are we, and the rest of the corporate legal world, on a seemingly perpetual FCPA Guidance Watch? Well, at last year’s National Conference on the Foreign Corrupt Practices Act, Breuer said the department expected to release “detailed new guidance on the Act’s criminal and civil enforcement provisions” sometime in 2012. 

Then, in August, the Wall Street Journal attempted to narrow that time frame. Citing unnamed sources, the WSJ reported the guidance was expected out by early October. Such timing would have coincided with the annual antibribery working group meeting of the Organization for Economic Cooperation and Development, where law enforcement officials from all over the world gather round to discuss their antibribery enforcement efforts.

We were just as excited about this development as the next corporate compliance officer. But instead of a big announcement from Justice in October, all we were left to report on was a guidance update from the U.K.’s Serious Fraud Office. 

During his speech Monday, however, Breuer did invoke those four big letters. According to Main Justice reporter Elizabeth Murphy, who covered the event, Breuer referred to the DOJ’s tough approach to corruption as a “signature achievement” of the Obama administration. 

“I think this battle against corruption that we are seeing around the world is one of the main struggles of our time,” Murphy quoted Breuer as saying. “I think in the United States we are on the right side of history. And at the Department of Justice we’ve been able to contribute handsomely to that.”

Breuer also highlighted the Justice Department’s $70 million antibribery settlement with Johnson & Johnson in 2011, and touted individual prosecutions as well, according to Murphy’s report: “If you look at FCPA over the past four years, you’ll see we really have been rigorous about holding individuals accountable,” Breuer said.

Koehler, an assistant professor at Southern Illinois University School of Law, wanted to know more about this speech. And in the recent past, the Justice Department has released the criminal division chief’s remarks [PDF] to the Pharma Congress, in which he’s offered his views on who constitutes a “foreign official,” for example.

Alas, no dice this time. When Koehler requested a copy of the latest remarks, “the DOJ press office responded to my inquiry by saying that Breuer spoke from talking points and that his full remarks would not be released,” he wrote in his FCPA Professor blog post entitled “Empty Rhetoric.” CorpCounsel.com tried this tack, too, and got the same answer from a Justice Department spokeswoman. (In response to a question about when guidance would be issued, the spokeswoman declined to comment).

Still, working off the Main Justice story, Koehler—a fierce critic of many aspects of FCPA enforcement—didn’t mince words deconstructing Breuer’s “significant achievement” claim. A sampling:

"It’s a 'signature achievement' to bypass judicial scrutiny in resolving FCPA enforcement actions? Thus far this year, 100 percent of corporate FCPA enforcement actions have been resolved via a non-prosecution or deferred prosecution agreement. In 2011, 82 percent of corporate FCPA enforcement actions were resolved with such vehicles and in 2010 88 percent of corporate FCPA enforcement actions were resolved with such vehicles."

Koehler also balked at the idea that the government is “holding individuals accountable” for FCPA violations:

"Thus far in 2012, 100 percent of corporate FCPA enforcement actions have not resulted in any individual charges against company employees. In 2011, approximately 75 percent of corporate FCPA enforcement actions have not resulted in any individual charges against company employees.  In 2010, approximately 70 percent of corporate FCPA enforcement actions have not resulted in any individual charges against company employees."

In an interview with CorpCounsel, Koehler said he favors structural reforms to the FCPA, such as allowing companies a compliance defense, and doing away with non-prosecution agreements and deferred prosecution agreements altogether. He expects to see “little that is new” in the forthcoming guidance, he said. Rather, he believes the fact of the announcement of the guidance—rather than its contents—will be the main event.

But just when will that “event” be? Koehler points out with a laugh that he, too, thought the guidance would be out in time for the OECD Paris conference—“and that didn’t happen.” 

Though he does note that Breuer is back on the conference circuit next week, speaking at the National Conference on the Foreign Corrupt Practices Act, which kicks off Thursday morning in Washington D.C. Says Koehler: “I’ll just leave it at: it was at this event last year that Lanny Breuer stated his intention to offer guidance.”

Until then, we wait and we watch with fingers crossed.