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DOJ Cries Uncle: Guidance Coming

It was inevitable.  The Justice Department announced it would issue guidance on the FCPA.  Lanny Breuer’s announcement reflected the political realities and one other important factor – it is the right thing to do. 

As I said on numerous occasions, the pattern is similar to DOJ’s handling of the attorney-client privilege waiver/McNulty memo.  In order to avoid legislation and to quiet critics, they announce changes in policies, or plans to do so, to buy themselves time.  That is what is happening now. 

DOJ has bought itself six months and can work with industry, advocates and others to try and adopt guidance for safe harbors.  Businesses have a legitimate request.  Safe harbors will allow them to implement compliance programs without fear of enforcement actions.

The policy guidance will flow through the Justice Department bureaucracy – the project will be run out of the Deputy Attorney General’s office with a committee of representatives from the key components – the Criminal Division, the Office of Legal Policy, the Office of Legislative Affairs, the Executive Office of US Attorneys (with the Advisory Group of US Attorneys).  The drafting will start at the Fraud Office and Criminal Division’s Office of Legal Policy (different than the Justice Department’s Office of Legal Policy).  On top of this effort, the SEC will be brought in as well to help develop the guidance.  You can expect an all out bureaucratic process but the DAG’s office should guide and control the effort.  As the issue heats up, you can expect other players to get involved at times – the White House and the State Department, with different levels of influence.  (State Department’s influence should be minimal).

The Justice Department will try and navigate through two competing concerns – the strong global movement for aggressive anti-corruption enforcement against business interests and complaints over “fairness” and practical safe harbors.  There are several issues which are ripe for guidance – the voluntary disclosure process and benefits of cooperation; the “foreign official” definition; and successor liability for mergers and acquisitions.

The next few months should be interesting and stay tuned.

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