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WASHINGTON � The recent indictment of U.S. Representative William Jefferson represents the first time that charges have been brought against a U.S. government official under the Foreign Corrupt Practices Act and a stepped-up enforcement effort against individuals under the act. “Most of the cases brought to date have involved corporations,” said William Steinman, who focuses on FCPA issues as a partner in the Washington office of Atlanta’s Powell Goldstein. But two years ago, he noted, officials from the U.S. Department of Justice and the Securities and Exchange Commission (SEC) indicated during several conferences that actions against individuals would increase. “They made good on that prediction,” he said. “Since May 2005, there have been 22 criminal prosecutions or civil fines and penalties against individuals. A couple have prevailed at trial, but most have not.” A federal grand jury on June 4 returned a 16-count indictment against Jefferson that charged him with solicitation of bribes, honest services wire fraud, money laundering, obstruction of justice, violation of the FCPA, racketeering and conspiracy. The indictment alleges that Jefferson violated the FCPA by allegedly offering, promising and making payments to a Nigerian official to advance the various business endeavors in which he and his family had financial interest. “Congressman Jefferson is innocent. He plans to fight this indictment and clear his name,” said his lawyer, Robert Trout of Washington’s Trout Cacheris. The FCPA prohibits corrupt payments to foreign officials for the purpose of obtaining or keeping business. The Justice Department is responsible for all criminal and civil enforcement of the anti-bribery provisions with respect to domestic concerns and foreign companies and nationals. The SEC is responsible for civil enforcement with respect to issuers. Besides increased FCPA actions against individuals, Steinman and other practitioners noted the following trends in enforcement in the past two years: •Increasing fines and penalties. “It’s almost like the Olympics. Every year brings a new record,” said Steinman. This includes the use of disgorgement of profits, which, according to FCPA lawyers at Gibson, Dunn & Crutcher of Los Angeles, was first required by the SEC in 2004 but has now become “standard fare.” •Increasingly broad interpretation and application of the statute. Enforcement officials are trying to establish jurisdiction in areas where it’s not obvious from the text. Last year, for example, the Justice Department took criminal enforcement action for the first time against a foreign issuer � Statoil ASA � for violating the FCPA, according to Gibson Dunn. •The Justice Department and the SEC requiring the use of compliance monitors and consultants by companies in recent FCPA dispositions. “They are usually a lawyer at a large firm and they cannot be fired by the company, and they are frighteningly expensive,” said Steinman. •Increasing voluntary disclosures by companies. Seventeen of the 20 newly disclosed FCPA investigations during the past two years were voluntarily disclosed to the Justice Department or the SEC after internal investigations by the companies, according to Gibson Dunn. Earlier this decade, by contrast, the government initiated most of the reported investigations.

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