Without Individual FCPA Defendants, There Would Be No FCPA Case Law

Without Individual FCPA Defendants, There Would Be No FCPA Case Law

 This article was reprinted with permission from FCPA Professor

Lest there be any confusion, I start this post with the basics.

The Foreign Corrupt Practices Act is a criminal statute.  Those that violate the FCPA ought to be charged.  Those who are found guilty of FCPA violations are not worthy of commendation.

Yet in the same way the Wall Street Journal recently stated (here) that former Goldman Sachs employee Fabrice Tourre “is doing a public service by forcing the SEC to defend its theories in court,” FCPA individual defendants who have put the DOJ (or the SEC in a civil FCPA enforcement action) to its burden of proof by testing their innocence have done a public service that ought to be recognized.

By recognized, I simply mean that it needs to be recognized that without FCPA individual defendants there would be no FCPA case law.

The unfortunate reality is that it takes individual defendants to go through unpleasant experiences, and for the stars to align in terms of the individual’s risk tolerance and financial resources, for there to be any FCPA case law.

Because of Stuart Carson, Hong Carson, Paul Cosgrove, David Edmonds, Keith Lindsey, Steve Lee, Mark Jackson, David Ruehlen, Joel Esquenazi and Carlos Rodriguez – there have been legal developments concerning the “foreign official” element.

Because of Eric Mattson, James Harris, David Kay and Douglas Murphy – there have been legal developments concerning the ”obtain or retain” business element.

Because of Frederic Bourke, David Kay and Douglas Murphy – there have been legal developments concerning mens rea issues.

Because of Pankesh Patel, Elek Straub, Andras Balogh, Tamas Morvai, and Herbert Steffen – there have been legal developments concerning jurisdiction.

Because of Mark Jackson and David Ruehlen – there have been legal developments concerning facilitating payments and statute of limitations.

Because of Frederic Bourke – there have been legal developments concerning the local law affirmative defense.

Other FCPA individual defendants such as, but not limited to, John O’Shea and the other Africa Sting defendants of course tested their innocence as well, even if no formal FCPA case law resulted from these enforcement actions.

Each of the above individuals could have chosen the path of least resistance, and if they would have, there would be no FCPA case law.  Indeed, if just three individuals (Bourke, Kay and Murphy) chose the path of least resistance, there would be very little FCPA case law.

Even with the occassional FCPA individual defendant putting the DOJ (or the SEC) to its burden of proof, so little is know about the contours of the FCPA beyond DOJ or SEC enforcement theories and prosecutorial common law.

Should your response be that much is known about the judicial contours of the FCPA, I say show me another area of law where an issue is settled because of one appellate court decision or because of a few non-binding and unreported pre-trial trial court decisions.

Regardless of the facts and circumstances given rise to their FCPA liability in the first place, the above individual defendants have indeed done a public service that ought to be recognized, because without them, there would be no FCPA case law.

Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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