Wednesday, May 5, 2010

As We Say, Not Necessarily As We Do

Yesterday Lanny Breuer (Assistant Attorney General - Criminal Division) spoke before the Council on Foreign Relations. The title of his speech (see here) was "International Criminal Law Enforcement: Rule of Law, Anti-Corruption and Beyond."

Breuer begins, "I am pleased to be able to share with you today how the Criminal Division seeks to promote the Rule of Law in our increasingly global society." Breuer notes that "perhaps in no area has the Criminal Division's" approach "had more dramatic results for the international Rule of Law than in that of corruption."

Breuer then sketches a brief history of the FCPA and notes that "when the U.S. enacted the [FCPA] in 1977, and as recently as the 1990's, some developed countries continued to argue that a certain amount of corruption might be desirable in developing nations; and it has been only in the last decade that some developed countries have eliminated tax deductions for foreign corrupt practices."

On this point, I fully agree that the DOJ is the undeniable leader in prosecuting bribery and corruption, and for this, it deserves credit.

Breuer then "spreads the FCPA gospel" (as Christopher Matthews at Main Justice recently termed it - see here).

Verses included: the "increased emphasis on charging individuals is part of a deliberate enforcement strategy to deter and prevent corrupt practices in the future;" "gone are the days when we relied solely on tips from whistle-blowers to build cases - instead we are now bringing the tools of organized crime investigations to white collar investigations."

The speech ends - "I would welcome any questions you might have."

I've got some questions.

During Breuer's tenure, two signature enforcement actions were the BAE and Daimler bribery, yet no bribery enforcement actions (see here and here for prior posts).

In both actions, the DOJ alleged facts sufficient to charge the companies with FCPA anti-bribery violations. Yet in both cases, no anti-bribery violations were charged.

Included in the Rule of Law is the notion that the law is to be applied equally to all subject to the law. Under the Rule of Law, certain companies in certain industries who may sell certain products to certain customers are not immune from the law.

Yet, in the eyes of many, the BAE and Daimler enforcement actions stand for the proposition that certain companies are indeed "above" the FCPA and essentially immune from FCPA anti-bribery charges.

So, my questions are:

How was the Rule of Law advanced in the BAE and Daimler enforcement actions?

How was the Rule of Law advanced when a company (BAE) that “provided support services to [a Saudi official] while in the territory of the U.S.” including “ the purchase of travel and accommodations, security services, real estate, automobiles and personal items” (these are the DOJ's words) is not charged with FCPA anti-violations? [Particularly when the DOJ alleges that over $5 million in invoices for benefits provided to the Saudi official were submitted by just one BAE employee during a one year period.]

How was the Rule of Law advanced when a company (Daimler) that "engaged in a long-standing practice of paying bribes to 'foreign officials'" (these are the DOJ's words) is not required to plead guilty to anything?

As noted above, the DOJ is the undeniable leader in prosecuting bribery and corruption, and for this, it deserves credit. However, with leadership comes responsibility and accountability.

When preaching, the preacher is subject to criticism, particularly when urging his parishioners to do as he says, not necessarily as he does.

The DOJ did some FCPA / Rule of Law preaching yesterday.

For extolling the virtues of the Rule of Law in the face of several recent high-profile examples where Rule of Law principles were seemingly ignored, the DOJ has set itself up for criticism.

1 comment:

  1. Amen! I admire your persistence in asking the hard questions that DOJ continues to ignore. Unfortunately, however, when the former head of FCPA enforcement sees no conflict of interest or corruption issues in his own behavior (move to Paul Weiss) I'm not so optimistic to believe that anybody else at DOJ has the integrity to honestly answer these questions.