06/16/2011 12:02:00 PM EST
“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 27th 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:
make the US the leader in ethical business conduct on a world-wide basis?
do away with the arbitrary distinction between bribing a private citizen
and bribing a governmental official?
bring the US up to the standards set by the British under the UK Bribery
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
All we can conclude at this point is that more will be
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.
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© Thomas R. Fox, 2011
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