Friday, January 28, 2011

Once Slumbering FCPA is "Alive and Well"

Slumbering to alive and well is a good way describe it when a law, one that has not changed during a decade, goes from zero DOJ enforcement actions (2000) to the DOJ collecting approximately $1 billion in fines in enforcement actions (2010) during that same decade.

Earlier this week, Assistant Attorney General (Criminal Division) Lanny Breuer spoke before the Annual Meeting of the Washington Metropolitan Area Corporate Counsel Association (see here for his remarks). The focus of the meeting was individual liability for corporate executives and in-house counsel.

Breuer posted the following questions and then stated the following regarding the FCPA.

"So what kind of federal criminal liability might a corporation have to worry about? How might the Criminal Division’s enforcement efforts affect you?"

"As an initial matter, in the Criminal Division we have dramatically increased our enforcement of the Foreign Corrupt Practices Act in recent years. That statute, which was once seen as slumbering, is now very much alive and well. In fact, over the last two years, we have charged more than 50 individuals with FCPA-related offenses and collected nearly $2 billion in FCPA-related fines and penalties – by far the most people charged and penalties imposed in any similar period. We have brought these cases against some of the largest corporations in the world. As just one example, in November we resolved a wide-ranging FCPA investigation involving the freight forwarding company Panalpina World Transport, its U.S. subsidiary, and five oil and gas service providers. They agreed to pay combined criminal penalties of $156 million.

Just as important as the collection of fines and penalties, we have aggressively pursued individual executives under the FCPA. For example, we recently charged the president and the CFO of Lindsey Manufacturing Company with FCPA violations for participating in a scheme to bribe officials of the state-owned electrical utility in Mexico. We also recently arrested the former CEO and the former vice president of business development of LatiNode, a Miami-based telecommunications company, and charged them in connection with bribes made by LatiNode employees to officials of the state-owned telecommunications company in Honduras.

The Fraud Section of the Criminal Division has primary responsibility within the Department for enforcing the FCPA. We recently promoted a new head of the Section’s FCPA Unit and two assistant chiefs, and we have also increased the number of line prosecutors in the Unit, attracting high caliber attorneys with extensive experience – including Assistant U.S. Attorneys with significant trial and prosecutorial experience and attorneys from private practice with defense-side knowledge and experience. These changes have significantly increased our FCPA enforcement capabilities."


A good weekend to all.

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