The International Law Section of the American Bar Association held its fall meeting in Paris the first week in November. One of the more interesting programs was entitled "Briber Beware: International Enforcement of the Foreign Corrupt Practices Act and Related Anti-Corruption Efforts." A featured speaker from the U.S. Department of Justice (Justice) was John Roth, Special Counsel regarding Money Laundering, who is stationed in Paris. He began by pointing out that the U.S. is a signatory to the OECD Convention on Anti-Bribery of Public Officials and that the FCPA is the enforcement tool to carry out U.S. obligations under the convention. After going through the usual explanations about how corruption distorts competition, stunts economic development, and the like, Roth mentioned that Justice does consider an ethics/morality component as well.
Roth went on to confirm something we have heard relatively consistently from high-level Justice officials concerning Justice’s strategy. First, it will attack all forms of corruption by American public officials, purportedly regardless of the amount of money at stake.
Second, Justice will continue to proceed against foreign officials, but is often severely limited by the fact that evidence is located in other countries, making it more difficult to gather and submit to a U.S. court in an acceptable condition. Moreover, we can expect enforcement even if the only connection to the U.S. is the use of U.S. wires or financial institutions. In addition, Justice will go after any U.S. institutions assisting foreign corruption, e.g., money laundering. Justice will also continue to seek to repatriate assets that were looted. So far, about $156 million has been recovered.
Finally, Roth stated that Justice intends to continue to also go after the supply and so will continue to prosecute both ends of the spectrum, the bribe offeror and the bribe taker. We’ve seen lots of statistics about the number of prosecutions and successful fines, many having been widely covered in the general press, so those numbers will not be repeated here.
Looking at Siemens and BAE as examples, Roth acknowledged there is a significantly greater degree of international cooperation. While much of the cooperation to date has been more bilateral in nature, through the OECD, prosecutors are exchanging information in a way not seen before. Further, Justice will start using more sophisticated techniques, taking a page from more traditional criminal investigations. Due to the sophistication of the agents who staff the dedicated FBI group that supports Justice’s anticorruption efforts, we can expect to see broader use of undercover operations/stings, informants, and cooperation agreements, and when an FCPA case does not seem likely to succeed, look for reliance on the money laundering and wire fraud statutes. Roth reiterated that such claims would be brought, even if the only relationship to the U.S. was the movement of funds through a U.S. financial institution.
Finally, Roth turned to voluntary compliance, as we have heard from many Justice officials - self-reporting is always the best option. He also repeated another commonly heard axiom - a strong compliance function is the best preventive medicine.
When it was pointed out the U.K. Serious Fraud Office has publicly acknowledged that the voluntary self-reporting of violations will result in a 50% reduction in fines, Su Ross asked whether Justice would consider such an objective measurement. Roth’s response was no. The explanation he gave was that Justice feels that, by retaining flexibility, it has the tools necessary to make more nuanced determinations. Roth also pointed out the current Assistant Attorney General, Lanny Beuer, came from the white collar criminal defense bar, and so, the logic goes, if it made sense to change Justice’s approach, surely he would be the first to so advocate.
Also on the panel was Karl Hennessee of the Legal Department at Airbus SAS. His topic was compliance programs. Not surprisingly, he covered more or less the same topics we hear whenever there is a discussion about effective compliance programs. The four main elements are: 1) Tone from the top; 2) Risk assessment; 3) Program design and control; and 4) Response and remediation. In other words, in the end, it’s all about adopting best practices (including making the tough decisions about such items as facilitation payments and gifts, hospitality, and charitable donations) and having people in positions of power or responsibility who believe that corruption cannot be tolerated.
Perhaps the most entertaining speaker gave the most practical advice. The Honorable Barry O’Keefe, QC, a former Australian Supreme Court Justice, stated there are two primary reasons for corruption – need and greed. Need arises when the structure is such that the government official is not paid a living wage. Greed typically covers everyone else. Justice O’Keefe also made the point that, in the right circumstances, most people can be corrupted. At the same time, Justice O’Keefe asserted that transparency is the best antidote to corruption. Perhaps a somewhat simplistic answer, but certainly one worth keeping in mind.