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In an FCPA Defense, Understanding Search Is CriticalFor companies that do business outside the United States, the good news is that the number of enforcement actions under the Foreign Corrupt Practices Act tapered off over the last two years, after a dramatic surge in cases from 2007 to 2010.
2013-01-29 12:00:00 AM
For companies that do business outside the United States, the good news is that the number of enforcement actions under the Foreign Corrupt Practices Act tapered off over the last two years, after a dramatic surge in cases from 2007 to 2010.
The bad news is that this tapering does not mean that the government is any less serious about FCPA enforcement. Even though the number of actions has dropped, the U.S. government continues to strengthen and institutionalize its FCPA investigation and enforcement operations.
The most recent evidence of this came in November with "A Resource Guide to the U.S. Foreign Corrupt Practices Act," a 120-page guide to the law's coverage and enforcement produced jointly by the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
Business leaders are right to be worried, Assistant Attorney General Lanny A. Breuer said in a November 2010 speech. "We are in a new era of FCPA enforcement and we are here to stay."
Nor is the U.S. alone in these efforts; governments across the globe are making new commitments to combat corruption. In 2011 alone, the United Kingdom put into effect a sweeping new anti-bribery law and China enacted changes to its anti-bribery law that made it a criminal offense to pay bribes to government officials outside of China and to nongovernment officials. Thirty-nine countries, including Russia, have signed the Organisation for Economic Co-operation and Development's Convention on Combating Bribery of Foreign Officials in International Business Transactions.
Whether you are a U.S. or foreign-based business, the message is the same: Watch out.
What Does This Have to Do with Search?
But what does FCPA and anti-bribery enforcement have to do with e-discovery search? A lot, actually.
FCPA investigations typically involve hundreds of thousands or even millions of documents collected from all over the world. Sometimes, the investigations are initiated after the government issues a complaint. In those cases, counsel have a starting place for their investigation. The government has a good-faith obligation to set forth the basis of its complaint, and that should alert counsel as to the people to interview and the subject matter for their searches.
But it doesn't always work that way. The FCPA imposes liability on an acquiring corporation when mergers occur potentially making the buyer of a company liable for bribes and other corrupt activities that occurred even before the merger. That is true even if the buyer did nothing wrong.
In that regard, it is a bit like buying a U.S. company that has plants and property: If it later turns out that the property you are buying is contaminated with toxic chemicals, you may be facing expensive Superfund liability. It doesn't matter that you didn't release any pollutants at the new site after you acquired it.
Just as the Superfund law's broad conception of liability led to a growing and lucrative practice for environmental audit companies, the same is true for the FCPA. Some of the largest law firms in the world, with the depth and geographic coverage to mount these investigations, offer specialized FCPA practices.
The key difference is this: If you are doing an environmental audit, you know exactly where the property is. You can send out your teams to inspect the ground, review the chemical history of the plant, check where materials were dumped and even drill for problems. It may get expensive, but at least you know where to look and what to look for.
FCPA Investigations Are Not Easy
An FCPA investigation presents a different sort of problem. To start, you may not even know what kind of fraud you are looking for. Counsel can't exactly assemble the staff and ask for a show of hands from anyone who has bribed a foreign official. Bribery isn't something you are likely to put on your resumé or Facebook page.
What should you do? The law firms we work with often start by talking to people and collecting their documents. What can you learn about how they deal with government officials? What do the documents show? What about the expense accounts and other money transfers?
Search is a key part of the answer. Modern search engines allow you to search millions of pages in a variety of languages with the click of a mouse. But what search terms do you use? That's where things can get really difficult.
Traditional Search Doesn't Cut It
Traditional Boolean search has a part to play in an FCPA case, but it isn't always the most effective method and it could be risky to rely on it exclusively. Why? Typically, we don't know exactly what we are looking for, let alone the specific terms that might elicit those documents. Searching for "bribe" within 10 words of "government official" probably won't do the trick. Searching for the names of the government officials in question might help assuming, of course, you already know the names.
Boolean search becomes even less useful in FCPA due diligence investigations. This is because you are essentially trying to prove a negative that employees in the company to be acquired were not bribing public officials. That requires counsel to comb company records thoroughly to determine that nothing improper went on.
This is where a nontraditional form of search can be helpful.
Think about the traditional approach to search: You ask the documents specific questions and hope they answer with helpful information. This is a bit like the children's game Go Fish. We kind of know what we are looking for and the trick is to frame queries to find out if it is there. We try to think of key term variants and frame our searches to find good stuff.
"Give me all the schemes our newly acquired company has used to convince government officials to give us the business." Answer: "Go fish."
Let the Documents Speak ?to You
Now consider another approach to search, one that is more effective for these kinds of cases. Instead of simply questioning the documents about what you think you know, let the documents speak to you and tell you their secrets. While the technique I'm talking about is still based on search, the approach is different, and it can be far more effective when you are dealing with large volumes of documents and have no clear road map to follow.
Modern search engines collect data about documents that can help shed light on what they contain and how they relate to one another. For example, our e-discovery platform collects statistics about the metadata contained in the documents we index.
Thus, if I am looking at files obtained from a particular office or custodian, I can quickly glean a lot of helpful information about their contents without ever running a search. We can quickly see who was on the sending or receiving end of emails and see levels of interaction and activity among individuals. That information alone may give us some very helpful insights.
Likewise, you can use the system to look for the key concepts or terms that are being discussed within the bodies of a group of documents. Then, by ordering those terms by relevance or frequency, you can get important clues that will help you narrow your investigation and determine whether there is a legally relevant story hidden in the data.
Exploring Timelines and Relationships
Recent innovations in search and review technology are taking investigation to a whole new level. Along with standard field information about people and topics, the most advanced search platforms are providing investigators with new tools, such as timelines, to allow the documents to speak to them.
For example, using the timeline and the field facets in one of Catalyst's platforms, a searcher can manipulate a document collection to identify patterns in communications and dates. These tools, in effect, enable the documents to "speak," telling investigators their otherwise hidden stories.
The search can interact with the various facets or drill down into the timeline and instantly get a visual representation of ?how communications flowed between individuals, and in what sequence, during a particular timeframe. These visual representations can be of critical help in identifying dates and relationships warranting further inquiry.
These new tools also allow you to very quickly explore in a visual format that you can actively manipulate communications among individuals.
The program can be used to create an interactive diagram showing you to whom an author sent emails and the number of emails sent to each recipient. Clicking on any recipient will move that person to the center of the diagram, where you can instantly track each of his or her communications in the same way. Clicking on the numbers will enable you to immediately drill down to the actual emails.
The ability to move effortlessly between different views and different levels of detail is a powerful way to quickly decipher key relationships and communication patterns among individuals. This information could reveal relationships you had not been aware of or patterns of activity tied to key events. This is information you would never find using traditional keyword searching alone.
The latest search technology offers several other techniques you can employ to have your documents speak to you. Clustering documents around themes can help you sort through large volumes of documents more efficiently and quickly narrow your focus to those that are most likely to matter. Then, you can take a small set of relevant documents and use the "find more like these" feature to search a key document set. Today's technology has the ability to instantly create more complex and more accurate queries than most researchers can hope to create on their own. These methods let the computer do that work based on complex algorithms once again allowing the documents to speak to you and help move your investigation forward.
There are many more techniques that could be used for FCPA investigations. Suffice it to say that search is at the heart of these investigations, and today's search methods and technologies are much ?more complex than we learned using Lexis or Westlaw. Machine-driven mathematics, analytics and visual interfaces have become increasingly important features as we ?make the transition from Boolean searching to a process in which we both interrogate the documents and let them speak directly to us.
With the United States continuing to institutionalize FCPA enforcement and countries worldwide ramping up their anti-bribery efforts, international counsel will be faced with more and more of these tricky and high-stakes investigations. At center stage will be a global array of documents, and the key to making sense of them will be search.
John Tredennick is the founder and CEO of Catalyst Repository Systems, an international provider of multi-lingual document repositories and technology for electronic discovery and complex litigation. Formerly a nationally known trial lawyer, he was editor-in-chief of the best-selling book, Winning with Computers: Trial Practice in the Twenty-First Century.