In the first FCPA declination under the Trump Administration, Liberty Mutual Insurance Company paid $4.7 million in disgorgement and received a declination letter from the Department of Justice.

The declination reflects consistent application of the existing Corporate Enforcement Policy.  While DOJ has issued new guidance on FCPA enforcement reflecting its revised priorities, DOJ’s declination does not reference or incorporate any ideas from the guidance.  Instead, DOJ’s declination reinforces DOJ’s recent policy pronouncement encouraging and incentivizing voluntary disclosure and cooperation.  The Justice Department has all but guaranteed that any company choosing that route will earn a declination.

DOJ has not, however, modified its Corporate Enforcement Policy that requires cooperating companies to disgorge any ill-gotten profits.  In the Liberty Mutual case, DOJ required the company to pay $4.7 million in disgorgement.  DOJ is unlikely to eliminate this requirement but may seek ways to relax the interpretation or application of disgorgement in specific circumstances.  This is a key issue to watch as DOJ continues to resolve FCPA cases.

As explained by DOJ in its declination letter, from 2017 to 2022, Liberty Mutual, a global insurance company, paid bribes in India totaling approximately $1.47 million to officials at six state-owned banks, in exchange for referrals of bank customers to Liberty Mutual’s insurance products. 

Liberty Mutual employees took steps to conceal the true nature of the payments, including booking the payments as marketing expenses and using third-party intermediaries to make the payments to the officials. In total, the bribe scheme resulted in revenue of approximately $9.2 million and profits of approximately $4.7 million.

Applying DOJ’s Corporate Enforcement Policy’s factors, DOJ found the following:

(1) Liberty Mutual’s timely and voluntary self-disclosure of the misconduct to the Fraud Section in March 2024, which was identified during an internal investigation that was still ongoing at the time of the disclosure;

(2) Liberty Mutual’s full and proactive cooperation in this matter (including its provision of all known relevant facts regarding the misconduct, including information regarding the individuals involved) and its agreement to continue to cooperate with any ongoing Government investigations and any prosecutions that have resulted or might result in the future;

(3) the nature and seriousness of the offense;

(4) Liberty Mutual’s timely and appropriate remediation, including the Company’s early and fulsome acceptance of responsibility, its thorough and systematic root-cause analysis, and the Company’s separation from personnel involved in the misconduct;

(5) Liberty Mutual’s significant improvements to its compliance program and internal controls, including enhanced vetting, monitoring, and oversight of payments to third parties throughout its global markets, structural reorganization coupled with increased legal and compliance resources, and the implementation of enhanced compliance policies, including with respect to use of social media and ephemeral messaging applications for business purposes;

(6) the absence of aggravating circumstances; and

(7) the fact that Liberty Mutual agreed to disgorge the amount of its ill-gotten gains.