FCPA Enforcement: "Stronger Than It's Ever Been"

In a number of recent speeches, the head of the U.S. Department of Justice (DOJ), Lanny Breuer, has described the DOJ's focus on FCPA enforcement as "stronger than it's ever been — and getting stronger." In 2010, the total number of FCPA enforcement actions rose significantly over the number in the previous year — from 45 actions against companies and individuals in 2009 to 76 actions in 2010.

 

Recently, DOJ officials have signaled that agency's willingness to conduct proactive investigations in FCPA cases, rather than to limit investigations to voluntary disclosures or allegations by whistleblowers or competitors. In January, 22 executives and employees of law-enforcement and military-equipment companies were arrested for alleged FCPA violations. The arrests were part of the DOJ's first foreign bribery investigation to use undercover federal agents and other tactics most commonly used in organized-crime investigations.

 

Whatever the means of investigation, it's likely that the DOJ and the Securities and Exchange Commission (SEC) will continue to devote significant resources to FCPA enforcement actions in the remainder of 2011 — and that enforcement actions will target individuals as well as companies. U.S. Attorney General Eric Holder confirmed this recently when he stated, "Let me be clear, prosecuting individuals is a cornerstone of our enforcement strategy." This March, Jeffrey Tesler pleaded guilty to conspiracy and FCPA violations and agreed to forfeit nearly $149 million — the largest individual FCPA forfeiture in history. And last week, corporate giant Johnson & Johnson agreed to pay $70 million to settle civil and criminal FCPA charges relating to bribery of public doctors in European countries and payment of kickbacks to Iraq.

 

Continuing FCPA enforcement efforts in the US, coupled with the upcoming enforcement of the new  UK Bribery Act (which becomes effective on July 1), mean that companies with international operations should take a hard look at existing processes and assure that employees at all levels — from managers to employees to third-party consultants and contractors — receive appropriate Anti-Corruption training. It's also critical that companies test, review and refresh their internal anti-corruption policies regularly to ensure their continuing relevance and effectiveness.

 

In addition to policies and training on the FCPA, the UK Bribery Act and anti-corruption, companies should use other tools to round out their compliance programs. For example, whistleblower tips and internal investigations are extremely valuable in combating and reducing FCPA and corruption violations as well.