Insanity Doing the Samething Over and Over Again Expectiing Different Results
FCPA Insanity: Doing The Same Affair Over And Over Once again And Expecting Different Results
Albert Einstein is credited with maxim that insanity is "doing the same thing over and over over again and expecting unlike results."
You lot don't need to be an Einstein to realize that the main thrust of the DOJ's recently announced FCPA "pilot program" (that is to encourage voluntary disclosure) is zero new.
All you lot need to have washed over the by decade is pay attention to DOJ enforcement agency speeches considering the DOJ has been saying the same matter over and over again.
As noted in this original post announcing the DOJ's "new" "airplane pilot plan," the DOJ'south latest attempt to encourage voluntary disclosure should most certainly be seen every bit an acknowledgement that its long-standing efforts have non been every bit successful every bit the DOJ might promise.
Does the DOJ honestly believe that this most recent iteration is going to lead to any different results – peculiarly since (as will be explored in a time to come mail service) the "pilot program" really does not correspond anything new despite the DOJ's best endeavor to convince the corporate customs otherwise?
Set forth below are numerous DOJ speeches since 2005 to encourage voluntary disclosure, including the DOJ's repeated assurances that voluntary disclosure results in meaningful credit.
Knowledgeable observers know that the below speeches in the public domain stand for just a modest slice of DOJ public statements on this issue. For many years, including the present, in that location has been a "luncheon law" (see here for the prior post) attribute of the FCPA where enforcement agency officials speak on panels or deliver keynote addresses at conferences hosted by private for-profit organizations. Seldom are the comments by DOJ officials reduced to writing and only occasionally are the DOJ speeches released.
Yet, equally represented by the below examples, at that place are enough DOJ speeches in the public domain to more than than adequately prove the point of this mail service.
Feb 2005 – DOJ Assistant Attorney General Christopher Wray
"[W]east're seeing many more than companies disclose FCPA violations voluntarily. As I said before, companies are getting the message that nosotros're serious near rooting out illegal corporate conduct, and that helping united states get to the bottom of it is far wiser than laying low or trying to hide it."
Oct 2006 – DOJ Assistant Attorney General Alice Fisher
"When serious FCPA issues practise ascend, we strongly encourage you and your clients to voluntarily disclose those bug. I know that there is a concern out there that there is not enough certainty in the voluntary disclosure process. And frankly, there are good reasons for that.
Equally many of y'all know, sometimes a single ransom is but the tip of the iceberg in terms of internal control bug, books-and-records violations, and other bribes. Then it would non make sense for law enforcement to make one-size-fits-all promises most the benefits of voluntary disclosure before getting all of the facts.
It also would not be in the best interests of law enforcement to brand promises nigh lenient treatment in cases where the magnitude, duration, or high-level management involvement in the disclosed bear may warrant a guilty plea and a significant penalty. But what I can say is that at that place is always a do good to corporate cooperation, including voluntary disclosure, as contemplated by the Thompson memo.
The fact is, if you are doing the things you should exist doing – whether information technology is self-policing, self-reporting, conducting proactive hazard assessments, improving your controls and procedures, training on the FCPA, or cooperating with an investigation after it starts – you will become a benefit. It may not hateful that you or your customer will go a complete pass, merely you volition go a real, tangible benefit.
There take been cases where companies have come in and voluntarily disclosed real FCPA violations that nosotros have non prosecuted at all. On the other hand, in other cases a voluntary disclosure might result in a guilty plea, depending on the circumstances. So although nothing is off the tabular array when you lot voluntarily disclose, I can tell you lot in unequivocal terms that you will get a real benefit – but similar Schnitzer Steel did. As I said earlier, Schnitzer Steel was an excellent case of corporate cooperation."
November 12, 2009 – DOJ Banana Attorney 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 lot voluntarily disclose an FCPA violation, you will receive meaningful credit for that disclosure. And if y'all cooperate with the Department'due south investigation, you will receive a meaningful do good for that cooperation—without any request or requirement that y'all disembalm privileged textile. Finally, if you lot remediate the trouble and have steps to ensure that it does not recur, you will benefit from that also.
Nosotros are fully enlightened that internal investigations and remedial measures may be costly. But the costs of not doing the responsible thing tin can be much college – including meaning criminal fines for the corporation, unwanted negative publicity, a potentially devastating touch on stock prices, and possible exclusion from Medicare and Medicaid. Conversely, a voluntary disclosure may consequence in no activity being taken against a company, or the company may secure other preferred dispositions, such as a deferred or not-prosecution agreement, or a reduced fine under the Sentencing Guidelines. In this, every bit in so many areas, doing the right matter, in my view, also makes skillful business sense."
November 17, 2009 – DOJ Banana Attorney Full general Lanny Breuer
"[T]hither is still the sometimes difficult question of whether to make a voluntary disclosure, a question I grappled with as 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 Section. The Sentencing Guidelines and the Principles of Federal Prosecution of Business Organizations plain encourage such conduct, and the Department has repeatedly stated that a company will receive meaningful credit for that disclosure and that cooperation.
That commitment has manifested itself in some of the resolutions just this by year. For case, while the Siemens instance is, of course, past far the well-nigh egregious example of systemic corporate corruption ever prosecuted by the Section, it is also a prime example of the benefits that flow from truly exceptional cooperation. The benefits that Siemens received, even in the absence of a voluntary disclosure, were pregnant. Outset, the $450 million fine that was paid to the Department of Justice, as opposed to portions paid to the SEC and the High german regime, while a big amount of money in absolute terms, was dramatically less than the applicable Sentencing Guidelines range, which was $1.35 billion to $2.7 billion. 2d. the resolution permitted Siemens to avoid mandatory debarment in certain locations and to make arguments near its suitability every bit a contractor in calorie-free of its boggling remediation. And third. the Section worked with Siemens to resolve this vast and remarkably circuitous matter in two years' time, permitting the company to go its business out from under the ominous deject of such a large and well known criminal investigation.
Another example, on a much more pocket-size scale, was the resolution of the Helmerich & Payne matter, a company that cocky-disclosed improper or questionable payments. The case was resolved through a non-prosecution agreement with a term of two years, a penalty of $1,000,000, which was approximately thirty pct below the bottom of the guidelines range, and compliance self-reporting by the visitor for a period of two years in lieu of an independent compliance monitor. Helmerich & Payne benefitted in several, very tangible ways from their efforts. The fine, blazon of disposition, length of disposition, and treatment of the monitor upshot all reflect the forward leaning, pro-active, highly cooperative arroyo taken at that place.
I tin assure you that the Department'southward commitment to meaningfully reward voluntary disclosures and full and complete cooperation will go on to be honored in both letter and spirit. I am committed to no less. Together, the Department and the individual sector have the opportunity to ensure a climate of compliance and cocky-disclosure – ane that offers very tangible benefits for both of usa."
February 25, 2010 – DOJ Assistant Chaser General Lanny Breuer
"I besides want to assure you that the Department's commitment to meaningfully reward voluntary disclosures and total and complete corporate cooperation will continue to be honored in both letter and spirit. I know that many of y'all often grapple with the difficult question of whether to advise your client to brand a voluntary disclosure. I strongly urge whatever corporation that discovers an FCPA violation – or any other criminal violation, for that affair – 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 conduct, 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 practise when a problem has been discovered? Whether to voluntarily disclose potential misdeed is absolutely a difficult question for business entities.
Simply I can offer you this: If you lot come up forward and if you fully cooperate with our investigation, you volition receive meaningful credit for having done and so. In talking almost "meaningful" credit, we are non promising immunity for doing the right thing. But, cocky-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 agreement, sentencing credit, or a below-Guidelines fine.
Ultimately, every instance 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's pre-existing compliance plan. But, in every case of self-disclosure, full cooperation, and remediation, the Department is committed to giving meaningful credit where it'southward deserved to obtain a fair and merely resolution."
May 2010 – Interim Deputy Attorney General Gary Grindler
"[You tin can advise your clients to make early, voluntary disclosure of misconduct. As you lot know, it is normally in your client's all-time interest to cooperate with the authorities's investigation through the disclosure of relevant facts, the production of documents and other prove, and making witnesses available who have relevant information. Non just is such voluntary disclosure in your client'south interest, just the failure to do and then — the failure to make timely voluntary disclosure following the discovery of a criminal violation — in some circumstances tin can itself exist an independent violation of police. In December 2008, for example, the FAR was revised to require government contractors to disclose violations of criminal police and the Fake Claims Act in connection with honour and performance of authorities contracts and subcontracts. Nether this provision, contractors are subject to debarment and interruption from government contracting for knowingly failing to disclose such violations and overpayments on government contracts in a timely fashion. Contractors are likewise required to found internal command systems to facilitate timely disclosure of improper bear and fully cooperate with government agencies responsible for audit, investigation, and cosmetic actions.
[…]
[Y] ou can guide your client's conclusion to accept 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, information sharing between public and individual sector anti-fraud efforts, voluntary disclosure, and meaningful remedial measures — will inure to the do good of your clients in several meaning means. They volition deter criminal conduct from occurring in the first place. They will ensure that if and when misconduct does occur, it is detected early on and tin can be rooted out before too much damage is done. Your client volition receive credit for such actions during the prosecutorial controlling process. Finally, such steps will brand 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."
Nov 2010 – Banana Attorney Full general Lanny Breuer
"[V]oluntarily disclose wrongdoing if you detect it. As a former defence lawyer, I sympathize that the question of whether to self-report is a difficult one. But I tin clinch you that if y'all do not voluntarily disclose your organization'due south conduct, and we discover it on our own, or through a competitor or a customer of yours, the event will not be the same. Of course, voluntary disclosure is not the only factor we consider in deciding how to resolve a particular case. We take into account all the factors set forth in the Principles of Federal Prosecution of Business Organizations, and we consider the particular facts and circumstances of each individual case. But in that location is no doubt that a company that comes forward on its own will see a more favorable resolution than one that doesn't."
April 2011 – DOJ Press Release
"We are committed to belongings corporations accountable for bribing foreign officials while, at the same time, giving meaningful credit to companies that self-study and cooperate with our investigations."
May 2011 – DOJ NPA
"This substantially reduced monetary penalty reflects the DOJ's determination to meaningfully credit Tenaris for its extraordinary cooperation with the Section, including its timely and voluntary disclosure, its subsequent investigation, and the effective manner in which Tenaris conveyed data to the [DOJ and the SEC]."
November 2013 – Deputy Attorney General James Cole
"What is the benefit of voluntary disclosure and cooperation?" We fully understand that companies volition act in their own best interest. Then 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 case, resolutions short of a guilty plea like deferred prosecution agreements and not-prosecution agreements, and assuasive companies to self-report their remediation efforts instead of being subject to the oversight of a corporate monitor. We have also, in appropriate cases, supported reduced penalties beneath those suggested by the Sentencing Guidelines.
Because your role in the enforcement of the FCPA is vital to its success, I want to clinch you that nosotros are committed to demonstrating the benefits of your working cooperatively with u.s.a.. But, this does not mean that we volition blindly take the conclusions of internal investigations. To the contrary, nosotros will go on to actively pursue our own investigations in gild to pressure level exam the results of your internal investigations and be able to identify those companies that are truly cooperating. It likewise does not mean that companies that claim to be cooperating, only that are, in fact, engaging in gamesmanship, volition reap such benefits. Indeed, just equally it is important to reward true voluntary disclosures and actual cooperation, it is critical that nosotros concur companies answerable when they choose to muffle misconduct, obstruct investigations, and attempt to mislead investigators. For those companies, there volition be serious consequences.
November 2015 – Assistant Attorney Full general Leslie Caldwell
"[Five]oluntary self-disclosure in the FCPA context does have item value to the section. Because of that, we want to encourage cocky-disclosure by making clear that, when combined with cooperation and remediation, voluntary disclosure does provide a tangible benefit when it comes fourth dimension to brand a charging decision."
Nov 2015 – Deputy Assistant Chaser General Sung-Hee Suh
"I have also heard companies and their counsel say that they accept no thought how the regime'southward budgetary resolutions were arrived at – that information technology sometimes appears as if the regime but picks these numbers out of thin air. Too notable has been the tendency among companies over the last several years against voluntary self-reporting, including – and perhaps especially – in the FCPA infinite, in part due to what is perceived, equally noted during this morn's sessions, that there is fiddling or no benefit to cocky-reporting. Some lawyers have advised their clients that it's simply more rational to wait to meet if the government comes knocking and then cooperate if and when that happens."
[…]
"[T]o those companies that are disinclined to self-report in the belief that the government will never know – I say, recollect again. In the anti-corruption space, the Fraud Department and the Federal Bureau of Investigation are deploying significantly more resource to observe and prosecute companies that choose not to self-disclose in FCPA cases. We're hiring an additional 10 prosecutors in the FCPA Unit of measurement, an increment of over 50%, and the FBI has established three new squads devoted to international corruption investigations and prosecutions."
Source: https://fcpaprofessor.com/fcpainsanity/
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