Ring the Same Thing Over and Over Again Expecting Different Results

FCPA Insanity: Doing The Same Thing Over And Over Again And Expecting Unlike Results

Albert Einstein is credited with proverb that insanity is "doing the same thing over and over once again and expecting different results."

Yous don't need to be an Einstein to realize that the main thrust of the DOJ's recently announced FCPA "airplane pilot plan" (that is to encourage voluntary disclosure) is nothing new.

All you need to take done over the past decade is pay attention to DOJ enforcement agency speeches because the DOJ has been proverb the aforementioned thing over and over over again.

As noted in this original post announcing the DOJ's "new" "airplane pilot programme," the DOJ's latest attempt to encourage voluntary disclosure should nearly certainly exist seen as an acknowledgement that its long-continuing efforts have not been every bit successful as the DOJ might hope.

Does the DOJ honestly believe that this most recent iteration is going to lead to any different results – particularly since (as volition be explored in a future post) the "pilot program" really does non correspond anything new despite the DOJ's all-time effort to convince the corporate community otherwise?

Set forth beneath are numerous DOJ speeches since 2005 to encourage voluntary disclosure, including the DOJ'southward repeated assurances that voluntary disclosure results in meaningful credit.

Knowledgeable observers know that the beneath speeches in the public domain represent just a small slice of DOJ public statements on this issue. For many years, including the present, there has been a "tiffin law" (run into here for the prior post) aspect of the FCPA where enforcement agency officials speak on panels or deliver keynote addresses at conferences hosted by individual for-profit organizations. Seldom are the comments by DOJ officials reduced to writing and only occasionally are the DOJ speeches released.

All the same, equally represented past the below examples, there are enough DOJ speeches in the public domain to more than adequately prove the indicate of this postal service.

Feb 2005 – DOJ Assistant Attorney General Christopher Wray

"[W]e're seeing many more companies disclose FCPA violations voluntarily. As I said earlier, companies are getting the message that we're serious about rooting out illegal corporate conduct, and that helping united states of america get to the bottom of information technology is far wiser than laying depression or trying to hibernate information technology."

October 2006 – DOJ Assistant Attorney General Alice Fisher

"When serious FCPA issues do arise, we strongly encourage you and your clients to voluntarily disembalm those issues. I know that in that location is a business organisation out in that location that there is not enough certainty in the voluntary disclosure process. And bluntly, there are skillful reasons for that.

As many of you know, sometimes a single bribe is just the tip of the iceberg in terms of internal control issues, books-and-records violations, and other bribes. So it would non make sense for law enforcement to make one-size-fits-all promises about the benefits of voluntary disclosure before getting all of the facts.

Information technology likewise would not be in the best interests of law enforcement to brand promises most lenient treatment in cases where the magnitude, duration, or high-level direction interest in the disclosed conduct may warrant a guilty plea and a significant punishment. But what I can say is that at that place is ever a benefit to corporate cooperation, including voluntary disclosure, every bit contemplated by the Thompson memo.

The fact is, if you are doing the things yous should exist doing – whether information technology is self-policing, self-reporting, conducting proactive adventure assessments, improving your controls and procedures, preparation on the FCPA, or cooperating with an investigation after it starts – you will get a benefit. It may not hateful that you or your client will become a complete pass, simply y'all volition get a real, tangible benefit.

There have been cases where companies have come in and voluntarily disclosed real FCPA violations that we have not prosecuted at all. On the other manus, in other cases a voluntary disclosure might outcome in a guilty plea, depending on the circumstances. So although nothing is off the table when you voluntarily disembalm, I can tell you in unequivocal terms that you volition go a real benefit – merely like Schnitzer Steel did. As I said earlier, Schnitzer Steel was an excellent instance of corporate cooperation."

Nov 12, 2009 – DOJ Assistant Chaser Full general Lanny Breuer

"[A]ny pharmaceutical company that discovers an FCPA violation should seriously consider voluntarily disclosing the violation and cooperating with the Department'southward investigation. If you voluntarily disclose an FCPA violation, you will receive meaningful credit for that disclosure. And if you cooperate with the Department's investigation, y'all will receive a meaningful benefit for that cooperation—without any request or requirement that you disclose privileged textile. Finally, if you remediate the problem and take steps to ensure that it does non recur, y'all will benefit from that also.

Nosotros are fully aware that internal investigations and remedial measures may be plush. Only the costs of not doing the responsible thing can be much higher – including significant criminal fines for the corporation, unwanted negative publicity, a potentially devastating touch on on stock prices, and possible exclusion from Medicare and Medicaid. Conversely, a voluntary disclosure may result in no action being taken confronting a company, or the company may secure other preferred dispositions, such as a deferred or non-prosecution agreement, or a reduced fine under the Sentencing Guidelines. In this, equally in and then many areas, doing the right thing, in my view, also makes expert business concern sense."

November 17, 2009 – DOJ Assistant Attorney General Lanny Breuer

"[T]hither is still the sometimes difficult question of whether to brand a voluntary disclosure, a question I grappled with equally a defense lawyer. I strongly urge any corporation that discovers an FCPA violation to seriously consider making a voluntary disclosure and always to cooperate with the Department. The Sentencing Guidelines and the Principles of Federal Prosecution of Business organization Organizations obviously encourage such conduct, and the Section has repeatedly stated that a company will receive meaningful credit for that disclosure and that cooperation.

That delivery has manifested itself in some of the resolutions but this past year. For example, while the Siemens case is, of course, by far the most egregious example of systemic corporate corruption e'er prosecuted by the Section, it is likewise a prime number example of the benefits that flow from truly exceptional cooperation. The benefits that Siemens received, even in the absence of a voluntary disclosure, were significant. Start, the $450 million fine that was paid to the Section of Justice, every bit opposed to portions paid to the SEC and the German language government, while a big amount of money in absolute terms, was dramatically less than the applicable Sentencing Guidelines range, which was $1.35 billion to $2.vii billion. Second. the resolution permitted Siemens to avoid mandatory debarment in certain locations and to make arguments near its suitability as a contractor in lite of its extraordinary remediation. And 3rd. the Department worked with Siemens to resolve this vast and remarkably complex matter in 2 years' time, permitting the visitor to get its concern out from under the ominous cloud of such a big and well known criminal investigation.

Some other example, on a much more minor scale, was the resolution of the Helmerich & Payne matter, a visitor that cocky-disclosed improper or questionable payments. The case was resolved through a non-prosecution agreement with a term of 2 years, a penalty of $1,000,000, which was approximately 30 percent below the bottom of the guidelines range, and compliance self-reporting by the company for a flow of two years in lieu of an independent compliance monitor. Helmerich & Payne benefitted in several, very tangible ways from their efforts. The fine, type of disposition, length of disposition, and handling of the monitor issue all reflect the frontward leaning, pro-active, highly cooperative approach taken there.

I can clinch you that the Section's commitment to meaningfully reward voluntary disclosures and full and consummate cooperation will continue to be honored in both letter and spirit. I am committed to no less. Together, the Department and the private sector have the opportunity to ensure a climate of compliance and cocky-disclosure – i that offers very tangible benefits for both of us."

Feb 25, 2010 – DOJ Assistant Attorney General Lanny Breuer

"I besides desire to clinch y'all that the Department'due south commitment to meaningfully reward voluntary disclosures and full and complete corporate cooperation will go on to be honored in both letter and spirit. I know that many of yous oftentimes grapple with the hard question of whether to advise your client to make a voluntary disclosure. I strongly urge any corporation that discovers an FCPA violation – or any other criminal violation, for that matter – to seriously consider making a voluntary disclosure and to cooperate with the Department. The Sentencing Guidelines and the Principles of Federal Prosecution of Business Organizations obviously encourage such behave, and your clients will receive meaningful credit for that disclosure and cooperation."

May 26, 2010 – DOJ Assistant Attorney General Lanny Breuer

"So, what should a corporation do when a problem has been discovered? Whether to voluntarily disclose potential criminality is admittedly a difficult question for business organization entities.

But I tin can offer yous this: If yous come up forward and if you fully cooperate with our investigation, you lot will receive meaningful credit for having done and so. In talking about "meaningful" credit, we are not promising immunity for doing the right matter. Just, self-reporting and cooperation carry significant incentives – by working with the Department, no charges may be brought at all, or we may agree to a deferred prosecution understanding or non-prosecution understanding, sentencing credit, or a beneath-Guidelines fine.

Ultimately, every case is fact-specific and requires an assessment of the facts and circumstances, as well as the severity and pervasiveness of the conduct and the quality of the corporation'south pre-existing compliance programme. But, in every case of self-disclosure, full cooperation, and remediation, the Department is committed to giving meaningful credit where it's deserved to obtain a off-white and simply resolution."

May 2010 – Acting Deputy Attorney General Gary Grindler

"[You can advise your clients to make early on, voluntary disclosure of misconduct.   As you know, it is usually in your client's best interest to cooperate with the regime's investigation through the disclosure of relevant facts, the production of documents and other evidence, and making witnesses bachelor who have relevant data.  Not simply is such voluntary disclosure in your client's interest, but the failure to do so — the failure to brand timely voluntary disclosure post-obit the discovery of a criminal violation — in some circumstances can itself be an independent violation of police force.   In December 2008, for instance, the FAR was revised to require government contractors to disclose violations of criminal law and the False Claims Deed in connectedness with honour and operation of authorities contracts and subcontracts.  Nether this provision, contractors are subject to debarment and pause from regime contracting for knowingly failing to disclose such violations and overpayments on government contracts in a timely manner.  Contractors are too required to establish internal control systems to facilitate timely disclosure of improper acquit and fully cooperate with authorities agencies responsible for audit, investigation, and corrective actions.

[…]

[Y] ou can guide your customer's decision to have meaningful remedial measures in response to criminal wrongdoing, including the payment of restitution and the disciplining or termination of culpable employees, officers, or directors.

In the end, all of these steps – robust compliance programs, data sharing betwixt public and private sector anti-fraud efforts, voluntary disclosure, and meaningful remedial measures — will inure to the benefit of your clients in several significant ways.  They will deter criminal conduct from occurring in the first place.  They will ensure that if and when misconduct does occur, it is detected early on on and tin exist rooted out before too much impairment is washed.  Your client will receive credit for such actions during the prosecutorial decision-making process.  Finally, such steps volition make your clients stronger corporate citizens, and will empower your clients' officers, directors, and employees to fulfill their fiduciary obligations to shareholders and their duties of honest dealing to the investing public and the taxpayers."

November 2010 – Assistant Attorney General Lanny Breuer

"[V]oluntarily disclose wrongdoing if you lot discover it. As a former defense force lawyer, I understand that the question of whether to self-report is a difficult one. Simply I can assure y'all that if you exercise not voluntarily disclose your organization'southward deport, and we discover it on our ain, or through a competitor or a customer of yours, the result will non exist the aforementioned. Of course, voluntary disclosure is not the only factor we consider in deciding how to resolve a particular example. We accept into account all the factors ready forth in the Principles of Federal Prosecution of Business Organizations, and we consider the particular facts and circumstances of each private case. Simply at that place is no doubt that a visitor that comes frontwards on its own will see a more favorable resolution than one that doesn't."

Apr 2011 – DOJ Press Release

"Nosotros are committed to holding corporations accountable for bribing foreign officials while, at the same fourth dimension, giving meaningful credit to companies that self-study and cooperate with our investigations."

May 2011 – DOJ NPA

"This essentially reduced monetary penalization reflects the DOJ'south decision to meaningfully credit Tenaris for its extraordinary cooperation with the Department, including its timely and voluntary disclosure, its subsequent investigation, and the effective manner in which Tenaris conveyed information to the [DOJ and the SEC]."

November 2013 – Deputy Attorney General James Cole

"What is the benefit of voluntary disclosure and cooperation?"  We fully empathize that companies will act in their ain best interest.  So nosotros accept sought to incentivize companies with tangible benefits for their voluntary disclosure and cooperation – beyond the reductions already built into the Sentencing Guidelines.  Such benefits have taken the form of declinations like that in the Morgan Stanley instance, resolutions short of a guilty plea like deferred prosecution agreements and not-prosecution agreements, and allowing companies to self-report their remediation efforts instead of beingness subject to the oversight of a corporate monitor.  We have also, in advisable cases, supported reduced penalties beneath those suggested by the Sentencing Guidelines.

Considering your part in the enforcement of the FCPA is vital to its success, I want to clinch you that we are committed to demonstrating the benefits of your working cooperatively with us.  Merely, this does not mean that we will blindly accept the conclusions of internal investigations.  To the contrary, we will continue to actively pursue our own investigations in society to pressure test the results of your internal investigations and be able to identify those companies that are truly cooperating.  It also does not hateful that companies that claim to be cooperating, but that are, in fact, engaging in gamesmanship, will reap such benefits.  Indeed, just as it is of import to reward truthful voluntary disclosures and actual cooperation, it is critical that nosotros concord companies accountable when they choose to conceal misconduct, obstruct investigations, and attempt to mislead investigators.  For those companies, there volition be serious consequences.

November 2022 – Assistant Attorney General Leslie Caldwell

"[V]oluntary self-disclosure in the FCPA context does have particular value to the section.   Because of that, we want to encourage self-disclosure by making clear that, when combined with cooperation and remediation, voluntary disclosure does provide a tangible benefit when it comes time to make a charging decision."

November 2022 – Deputy Assistant Chaser General Sung-Hee Suh

"I have likewise heard companies and their counsel say that they have no idea how the government's monetary resolutions were arrived at – that it sometimes appears as if the government just picks these numbers out of thin air. As well notable has been the trend among companies over the last several years against voluntary self-reporting, including – and perhaps especially – in the FCPA space, in part due to what is perceived, equally noted during this morning'due south sessions, that in that location is piffling or no do good to cocky-reporting. Some lawyers have brash their clients that it'south merely more than rational to wait to come across if the government comes knocking and then cooperate if and when that happens."

[…]

"[T]o those companies that are disinclined to self-written report in the conventionalities that the government volition never know – I say, think again. In the anti-corruption space, the Fraud Section and the Federal Bureau of Investigation are deploying significantly more resources to find and prosecute companies that choose not to cocky-disclose in FCPA cases. We're hiring an additional ten prosecutors in the FCPA Unit, an increment of over 50%, and the FBI has established three new squads devoted to international corruption investigations and prosecutions."

hernandezfoolve.blogspot.com

Source: https://fcpaprofessor.com/fcpainsanity/

Share this post