This article was reprinted with permission from FCPA Professor.
Assistant Attorney General Lanny Breuer once again took to the podium to highlight the DOJ's FCPA enforcement program.
This time the event was the 13th Annual Pharmaceutical Regulatory and Compliance Congress. If you wanted to hear Mr. Breuer speak at the event, you had to pay approximately $2,000 per person (see here for the conference organizer's website). (See here for the post earlier this week "It Ought to Stop"). In the past, the DOJ released a transcript of Breuer's remarks at this annual event, but the DOJ press office responded to my inquiry by saying that Breuer spoke from talking points and that his full remarks would not be released.
Thankfully, the on-line news agency Main Justice covered the event (see here). Its report notes that Breuer called the DOJ's aggressive anti-corruption enforcement a "signature achievement" of the Obama administration.
It's a "signature achievement" that the DOJ's largest single investigation and prosecution of individuals in the history of the DOJ's enforcement of the FCPA (a prosecution Breuer previously called a "turning point") ended with the DOJ going 0-22 which prompted the judge to call the end of the cases a "long and sad chapter in the annals of white collar criminal enforcement"? (See here for the prior post regarding the Africa Sting case).
It's a "signature achievement" when a federal court judge vacates the convictions and dismisses the indictments in a case (a prosecution Breuer previously called an "important milestone") because the instances of prosecutorial misconduct, in the words of the judge, were so varied and occurred over such a long time "that they add up to an unusual and extreme picture of a prosecution gone badly awry"? (See here for the prior post regarding the Lindsey Manufacturing case).
It's a "signature achievement" when a federal court judge grants, at the close of the DOJ's case, a motion for dismissal and states that "the problem here is that the principal witness against [the defendant] ... knows almost nothing." (See here for the prior post regarding the O'Shea case). As noted in this previous post, the judge in the O'Shea case also stated as follows. "The Government should have been prepared before they brought the charges to the Grand Jury. [A key FCPA element is] something you have to prove. And you shouldn't indict people on stuff you can't prove."
As noted in my article "What Percentage of DOJ FCPA Losses Is Acceptable?" all of the above events occurred in the past 9 months.
It's a "signature achievement" to bypass judicial scrutiny in resolving FCPA enforcement actions? Thus far this year, 100% of corporate FCPA enforcement actions have been resolved via a non-prosecution or deferred prosecution agreement. In 2011, 82% of corporate FCPA enforcement actions were resolved with such vehicles and in 2010 88% of corporate FCPA enforcement actions were resolved with such vehicles.
If Breuer's concept of "signature achievement" means that the DOJ has created an environment in which a thriving FCPA industry has incentives to make voluntary disclosures which the DOJ then processes without judicial scrutiny, then perhaps Breuer's terminology has some meaning. But in all other respects, Breuer's "signature achievement" remark is empty rhetoric.
And its not the only example of empty rhetoric in his speech.
Main Justice also reports that Breuer highlighted the DOJ's prosecution of individuals and stated as follows. "If you look at FCPA over the past 4 years, you'll see we really have been vigorous about holding individuals accountable."
You gotta be kidding me.
I have looked at FCPA enforcement over the past four years and here are the facts.
Thus far in 2012, 100% of corporate FCPA enforcement actions have not resulted in any individual charges against company employees. In 2011, approximately 75% of corporate FCPA enforcement actions have not resulted in any individual charges against company employees. In 2010, approximately 70% of corporate FCPA enforcement actions have not resulted in any individual charges against company employees. As noted in this previous post, since 2008, approximately 70% of corporate FCPA enforcement actions have not resulted in any individual charges against company employees.
In my 2010 Senate testimony (here) and in this prior post, I offer an explanation for this, but the explanation only magnifies the "facade" of FCPA enforcement.
Upon learning of Breuer's "signature achievement" comment, Paul Calli (Carlton Fields) who successfully represented Stephen Giordanella in the Africa Sting case stated as follows. " I don't think Breuer is purposefully trying to mislead and scare the American business community when he withholds the truth that is the recent series of historic losses suffered by the DOJ's FCPA unit and its repeat offenses of misconduct as found by three different federal judges across the country. Instead, I think Breuer is playing the role of cheerleader and spinning it his way by - to borrow from the old Johnny Mercer song - accentuating the positive and eliminating the negative. Truth is, I don't think he is that involved in the decisions."
Whatever the reason or motivation for much of Breuer's recent speech, the fact remains it is littered with empty rhetoric.
Read more articles on the FCPA by Mike Koehler at FCPA Professor.
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