“I Know a Case” and Other Great Aphorisms – Observations on the FCPA Hearing

"I know a case." These four words are the bane of every young lawyer. When you are an associate, there is always some older senior partner who is sure that he remembers some case that is the key precedent for whatever the legal problem de jour is for that emergency. Of course, he is a bit fuzzy on the name of the case,  he cannot remember the date and heaven forbid he could give you a citation, but he is sure that it exists. So you had best go forth and find it. Another way to look at it is the Urban Myth; the person is sure they know some story or fact which is true but no one can ever seem to find the original source of the information.

I say all of this by way of introduction to my take on Tuesday's House Judiciary Committee hearing on the Foreign Corrupt Practices Act (FCPA). Several commentators wrote very well yesterday about the substance of the hearing (the FCPA Professor); one possible fix to the FCPA (the FCPA Blog); and how the House might 'update' the FCPA (White Collar Defense and Compliance). I will try not to trample over some of the insightful musings of my blogging colleagues in these areas, instead I will try and discuss some of the more interesting lines, observations and questions I heard posed yesterday. So we will begin with...

I Know a Case

Former US Attorney General and now Chamber of Commerce lobbyist Michael Mukasey discussed the infamous 'taxicab case' which has been making the FCPA circles for some time now. In this example a company pays for a foreign governmental official to take a ride home after working hours in a taxicab because it is so late that the trains are no longer operating. Thereafter, some unnamed compliance officer back in the US self-reports this to the Department of Justice (DOJ) and the unknown DOJ attorney assigned to the matter demands a full investigation which costs the company over $200,000 (or $300,000 or $400,000-depending on which version of the story you hear). General Mukasey testified that the example is "real" and the DOJ demanded a full investigation. Interestingly in a response to a later question, while acknowledging that he did not know when the now infamous taxicab case arose, who it might have involved, he did admit it could have occurred while he was Attorney General. But he was sure "the taxi ride is a real example."

We All Know What IT Is

No we are not bringing up Potter Stewart here but Representative Ted Poe, he of the 27^th Congressional District here in Houston, who spent most of his allotted five minutes talking about how tough he was on crime, when both a Prosecutor and Criminal Judge, and how much business the Chinese are taking away from US companies through various nefarious activities. He had just returned from Iraq where he "heard" Chinese companies were going to rebuild the Iraqi oil business through "money changing hands" but he was a little light on the specifics of this allegation. But the most interesting observation was everyone knows what corruption is because "We All Know What IT is." It was not clear what this insightful observation was in response to, or what it would suggest for enforcement of the FCPA, but certainly one could assume that it means that the DOJ should need to release even less guidance if corporation's know what bribery is because "we all know what IT is".

Let Me Tell You a Question

I learned about this technique by listening to and watching Dan Rather when he was a reporter. I saw it again practiced by Representative John Conyers when, during his five minutes of Q&A time, he repeated asked Shana-Tara Regon, Director of White Collar Crime Policy, National Association of Criminal Defense Lawyers, if she could list or name one example where the DOJ was guilty of "over-criminalizing" the FCPA through an overzealous prosecution of the FCPA. It was certainly a valid question and the answer of 'none' would have been telling. Unfortunately Rep. Conyers repeatedly interrupted Ms. Regon so that when she made the admission that she could not name any, her answer was overwhelmed by Rep. Conyers telling her his question.

Just Say No

However, I  save the best for last. It came when the Committee Chair, Representative James Sensenbrenner, reeled off a long series of questions to the DOJ representative, Greg Andres. The first question was whether the DOJ would support amending the FCPA to make all commercial bribery illegal; not simply that involving foreign governmental officials. For me this was the WOW moment. Do you believe that Rep. Sensenbrenner asked the question for any of the following reasons:

• To make the US the leader in ethical business conduct on a world-wide basis?
• To do away with the arbitrary distinction between bribing a private citizen and bribing a governmental official?
• To bring the US up to the standards set by the British under the UK Bribery Act?
• To garner the support of the OECD, Transparency International and other international NGOs which advocate the outlawing of all commercial bribery?

Alas, we will never know. Mr. Andres answered another one of the plethora of questions that Rep. Sensenbrenner asked and before Mr. Andres could even complete that answer, Rep. Sensenbrenner interrupted him to say "see you later, we will be drafting a bill." Rep. Sensenbrenner concluded the hearing by telling Mr. Andres, "get that message sir and tell that to the AG."

All we can conclude at this point is that more will be revealed.

Visit the FCPA Compliance and Ethics Blog, hosted by Thomas Fox, for more commentary on FCPA compliance, indemnities and other forms of risk management for a worldwide energy practice, tax issues faced by multi-national US companies, insurance coverage issues and protection of trade secrets.

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2011

For more information about LexisNexis products and solutions connect with us through our corporate site.