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This article was reprinted with permission
from FCPA Professor
During the panel session on DOJ non-prosecution and
deferred prosecution agreements last week at the Corporate Crime
Reporter sponsored conference
in Washington, D.C., I shared my belief that it seems like DOJ is clearly
troubled, with good reason, by traditional notions of corporate criminal
liability. (See here for
the prior post when I said the same thing about Lanny Breuer's NPA/DPA speech
last September). However, rather than seek substantive solutions to this
issue, the DOJ defends an alternate reality (NPAs / DPAs) that are equally
After listening to fellow panelist Denis McInerney (DOJ,
Deputy Assistant Attorney General) describe the goals of DOJ prosecution -
among other things, to better promote compliance and to hold individuals
accountable - I offered a solution in the Foreign Corrupt Practices
Act context that could help the DOJ achieve these laudable goals.
Have a compliance defense and abolish
NPAs and DPAs.
A compliance defense, along the lines I outlined in my
a Foreign Corrupt Practices Act Compliance Defense," would not eliminate
corporate criminal liability. Far from it. Rather,
a compliance defense would only apply when, notwithstanding a
company's pre-existing compliance policies and procedures and its good-faith
efforts to comply the law, a non-executive employee or agent acts contrary to those policies and procedures in violation of the law.
If a company did not have pre-existing compliance
policies and procedures, it could not avail itself of a compliance
defense. Similarly, even if a company did have pre-existing
compliance policies and procedures, the company could not avail itself of a
compliance defense if executive officers or employees (a concept already used
in the U.S. Sentencing Guidelines) were involved in the improper conduct.
If this were the framework governing corporate criminal
liability, then NPAs and DPAs should be abolished and the DOJ would
return to the historical choice of two options: charge or do not charge.
At the conference, I stated my genuine belief
that such a two-step reform would better incentive more robust
corporate compliance, reduce improper conduct, and thus best advance the
FCPA's objectives of reducing bribery. Such a two-step reform would
also increase public confidence in FCPA enforcement actions and allow the
DOJ to better allocate its limited prosecutorial resources to cases involving
corrupt business organizations and the individuals who actually engaged in the
improper conduct. (See the article for additional details).
In short, this two-step reform will better allow the DOJ
to achieve many of the objectives McInerney articulated.
However, not surprisingly, McInerney's response to my
two-step reform was the comment that this would be like returning to the
The question is why?
Presumably most countries have an incentive to better
promote compliance and to hold individuals accountable for wrongdoing.
Does this mean that the following OECD Convention countries that have a
compliance-like defense relevant to their FCPA-like laws are living in the
"dark ages" - Australia, Chile, Germany, Hungary, Italy, Japan, Korea, Poland,
Portugal, Sweden, Switzerland, and the United Kingdom. (See here).
Are Stanley Sporkin (former Director of the SEC
Division of Enforcement, among other positions), James Doty (current head of
the PCAOB), and Andrew Weissmann (former Director of the Enron Task Force
and current General Counsel of the FBI) all living in the "dark
ages"? All have supported compliance-like defenses or concepts relevant
to the FCPA. (See here, here, and here).
Are former Attorney Generals Michael Mukasey
and Alberto Gonzales or other former high-ranking DOJ officials
such as Larry Thompson living in the "dark ages"? (See here,
Is former DOJ FCPA Unit chief Joseph Covington living in the "dark ages."
Or have all these individuals, and others who support an
FCPA compliance defense, seen the light and it's the DOJ who is living in the
Read more articles on the FCPA by Mike
Koehler at FCPA
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