DOJ Sets Its Criminal FCPA Sights on Officers and Managers
The American public may not listen very closely to what Congress has to say but the Department of Justice has listened — and is continuing to listen. The question from Congress has been very consistent — why is DOJ not prosecuting individuals for criminal FCPA violations?
Starting in late 2011, DOJ responded to Congress, and is getting set to speak even louder on this issue. As I have said before, I expect DOJ to increase prosecutions for FCPA violations in the most effective way available — by relying on evidence developed by corporations which are cooperating and conducting internal investigations as a means to reduce or even escape liability. The Antitrust Division’s model is very instructive — for every company prosecuted for criminal antitrust violations, three corporate officers are usually prosecuted. In time, this same ratio will occur in the FCPA arena.
Late last year, DOJ indicted eight individuals related to the Siemens case — a mix of officers and third-party agents identified in the case. The message was clear — DOJ will take Siemen’s cooperation, and turn around and use the evidence gathered to prosecute individuals responsible for criminal violations.
Just over the horizon of the FCPA landscape, FCPA practitioners are hearing of more individuals who are about to be indicted in a number of significant criminal cases. Here are a few of the more significant ones —
1. Avon — this far-reaching investigation is coming closer to an end. A number of individual executives, several of whom recently resigned or were terminated, are targets of the current investigation — and when I use the word “target” I am referring to the US Attorney’s Manual definition (which is consistently misused by practitioners and defense counsel — a “target” is a putative defendant, meaning about to be charged by the grand jury). Defense counsel are trying to persuade DOJ not to indict their respective clients but I expect a number of individuals to be indicted as part of this case.
2. Weatherford — this long-standing investigation is about to come to a close — the parties remain at odds over the final fine amount, but more importantly DOJ has focused on several individual executives who expect to be indicted not only for FCPA violations but very significant export and trade sanction laws.
3. Alstom — this investigation which was on the front pages a year ago is still chugging along but given the international cooperation and law enforcement coordination, there are several individual executives who are likely to be indicted for FCPA violations. The case is rumored to be very significant and could eventually involve significant fines and individual criminal prosecutions of executives.
4. BizJet — some have raised questions about the significant cooperation reduction that BizJet received in this case. BizJet provided “extraordinary” cooperation and received a huge discount for its efforts. But this is not the end of the case — BizJet is extraordinary because of the high-level officers involved in the bribery scheme itself. They were fully aware and even directed some of the bribes. Bizjet’s cooperation included providing important evidence against officers and employees within the company, and BizJet agreed to continue to cooperate against these individuals. With this cooperation, DOJ is going to indict individual officers and employees. how far they go down the ladder is not yet clear but I would expect indictments in the next few months.
These are just some of the few cases where individuals are at risk for indictment. I am sure there are more. But the old adage certainly applies — be careful what you ask for, you just might get it.