I don’t want to make the wrong mistake — Yogi Berra

Sometimes the hysteria gets out of control. Lawyers, government enforcers and commentators spreading the word on the Internet seem to fan the flames of excitement.

Let’s all take a deep breath and carefully examine the facts.

There is no doubt that the Justice Department and the SEC are increasing enforcement of the FCPA. (A profound grasp of the obvious). But let’s look at how they are enforcing the law and how they are conducting their investigations.

For 2011, DOJ’s enforcement record is likely to fall way short from 2010 because resources are being dedicated to the numerous trials in Washington, D.C. California and Texas. Remember there are approximately 20 staff attorneys assigned to DOJ’s FCPA Section (which is supplemented by AUSAs from US Attorney’s offices in trial districts). There are a smaller number of attorneys taking voluntary confessions and managing follow up internal investigations by these companies. Enforcement actions are slowing down.

Most of DOJ’s cases have been initiated through voluntary self disclosures which typically involve more significant violations than the “run-of-the mill” situations. Such disclosures usually occur when outside counsel have determined that the violations are “material” or significant enough to warrant informing DOJ and the SEC. The remaining percentage of cases come from other cooperators in other cases, industry-wide investigations which may be launched after a voluntary disclosure by one participant or a cooperator, or international enforcers who may learn of information relevant to DOJ.

In this context, companies which wrestle with marginal issues involving technical interpretations of existing law and enforcement precedent need not worry. There is a very straight-forward path. Assuming that a company has not discovered any systematic breakdown in compliance, a company is extremely unlikely to ever get prosecuted for making a good faith decision to resolve an issue and go forward with a policy or practice where there are questions about whether it is legal. In order to protect the company and the actors, counsel should work to prepare a careful record of the facts, the legal issues and the reasoning behind the decision. So long as the decision is explained and is reasonable, DOJ and the SEC will have a hard time carrying a civil or criminal burden in proving the company violated the law.

Compliance officers act in good faith. In-house counsel are committed to doing their jobs. Outside counsel play an important role as an adviser and sounding board. All of these players act in good faith and will act to ensure the company does not violate the law. In almost every major enforcement action these players are either marginalized within a company or completely ignored. That may be the first sign of a complete compliance breakdown, reflecting the lack of any tone at the top of compliance within the company.

Good faith actors should not be prosecuted. The Justice Department and the SEC know that. Companies need to remember that as well in these days when they are being bombarded with messages of enforcement doom.