I am pleased to release (here) my paper, "The Facade of FCPA Enforcement," recently published by Georgetown Journal of International Law.
Below is an abstract.
The rise in Foreign Corrupt Practices Act (“FCPA”) enforcement actions has been well documented. Against the backdrop of aggressive enforcement and the resulting multi-million dollar fines and penalties is the undeniable fact that, in most instances, there is no judicial scrutiny of the FCPA enforcement theories. The end result is that the FCPA often means what the enforcement agencies say it means. Because of the “carrots” and “sticks” relevant to resolving a government enforcement action, FCPA defendants are nudged to accept resolution vehicles notwithstanding the enforcement agencies’ untested and dubious enforcement theories or the existence of valid and legitimate defenses. The end result is often the facade of FCPA enforcement.
This article discusses various pillars that contribute to the facade of FCPA enforcement and highlights that the FCPA, during its decade of resurgence, is being enforced like no other law. This article does not argue, or even suggest, that every FCPA enforcement action is unwarranted or that no company or individual has ever violated the FCPA. Rather, this article demonstrates that a significant majority of recent FCPA enforcement actions are a facade—including those that allege clear instances of corporate bribery—yet are resolved without FCPA anti-bribery charges.
The facade of FCPA enforcement matters. Even though the resolution vehicles typically used to resolve an FCPA enforcement action are not subject to judicial scrutiny and the vehicles do not necessarily reflect the triumph of the enforcement agencies’ theories, in the absence of substantive FCPA case law, these privately negotiated resolution vehicles have come to represent de facto FCPA case law. The facade of FCPA enforcement also breeds inefficient overcompliance by risk averse business actors fearful of enterprise–threatening liability because of the enforcement agencies’ untested and dubious theories. Because the factors that contribute to the facade are being modeled by other nations when enforcing their own bribery laws, the facade of FCPA enforcement is a global issue affecting a broad segment of the marketplace.
Identifying and acknowledging the existence of a problem is a necessary first step to crafting solutions. This article exposes the facade of FCPA enforcement, argues that addressing the facade and subjecting FCPA enforcement actions to greater judicial scrutiny is in the public interest, and encourages more FCPA defendants to challenge the enforcement agencies and further expose the facade of FCPA enforcement.