DOJ Guidance — What to Expect
The Justice Department bought itself some time to try and help themselves in the FCPA enforcement area. The Chamber of Commerce and others have criticized DOJ for its failure to provide clear guidance on the meaning of the FCPA and how to comply with the law.
The news from the last FCPA industry meeting was supposedly big – Assistant Attorney General Breuer announced that DOJ will issue guidance next year. What can we expect the guidance to look like. Let’s start with one important point – the Justice Department is not a regulatory agency, it is an enforcement agency. DOJ is not required to conduct a rule-making proceeding, to put out proposed guidance and get industry reactions. Its enforcement policy needs to be clear and concise. Companies need to know how to comply.
Those who expect the Justice Department to resolve important issues regarding interpretation of the FCPA are dreaming. They will not do that. They will adhere to positions they have taken in court regarding the definition of “foreign official,” the requisite intent for a violation of the anti-bribery prohibition and the “books and records” requirement, the extraterritorial reach of the statute, the application of the Travel Act, and other assorted issues which have come up. The Department will restate its position in a concise way but they will not announce anything new.
When it comes to the minimum elements of a compliance program, DOJ will repeat what it has stated already in its numerous settlement filings – the minimum elements of an effective compliance program and the “enhanced” elements of a compliance program. All of these elements will be couched in general language which will frame the exercise of DOJ’s discretion.
DOJ has an opportunity to clear the air on the interpretation of the term “foreign official.” As I have stated, DOJ could easily apply basic corporate control concepts – majority of equity ownership and/or majority of voting power – to guide companies when dealing with state-owned enterprises or partners. DOJ could easily carve out the minority ownership situation with the caveat that it could exercise its discretion to prosecute situations where company had de facto control despite lack of voting or ownership majority.
One of the more troubling areas which DOJ needs to address is that of guidelines for voluntary disclosures. It should – and easily could – set out basic parameters for voluntary disclosures based on the level and amount of cooperation, with percentage discounts from penalties or base offense reductions under the US Sentencing Guidelines.
DOJ also is unlikely to relax its successor liability enforcement policies. It has consistently adhered to this policy when enforcing the FCPA and other laws. However, DOJ recently appeared to relax its strict policies outlined in its Opinion 08-02 in the Haliburton matter and allowed companies to integrate newly-acquired companies over an 18 month period. Whether they will formally adopt such a position is extremely doubtful.
My word of warning to everyone is do not expect much from the Justice Department. It is unfair to expect the Department to issue guidance akin to a regulatory agency. It is not built for such guidance nor would it be institutionally responsible for it do so. Nonetheless, the Department can help to explain some of its policies and provide some meaningful guidance in certain areas which would be extremely helpful to companies seeking to comply.
Whatever the Department does it is very unlikely to silence critics of its FCPA enforcement program.