CORPORATE CRIME REPORTER

Koehler Calls for FCPA Compliance Defense
26 Corporate Crime Reporter 3, January 11, 2012

Corporate forces are mobilizing to amend the Foreign Corrupt Practices Act (FCPA).

The most probably fix?

An FCPA safe harbor for companies with FCPA compliance programs.

Now Michael Koehler is weighing in.

Koehler is an assistant professor of business law at Butler University.

He’s the man behind the popular FCPA Professor blog.

And he’s author of the soon to be published law review article – Revisiting a Foreign Corrupt Practices Act Compliance Defense (forthcoming Wisconsin Law Review.)

In the article, Koehler argues that a corporation’s pre-existing compliance policies and procedures, and its good faith efforts to comply with the FCPA, “should be relevant as a matter of law when a non-executive employee or agent acts contrary to those policies and procedures and in violation of the FCPA.”

The Justice Department is opposed to such a defense, arguing that it would undermine effective FCPA enforcement.

But Koehler says – hogwash.

“Contrary to the claims of some, an FCPA compliance defense would not eliminate corporate criminal liability under the FCPA or reward ‘fig leaf’ or ‘purely paper’ compliance programs,” Koehler writes. “A compliance defense would not apply to corrupt business organizations, activity engaged in or condoned by executive officers, or activity by any employee if it occurred in the absence of preexisting compliance policies and procedures.”

Koehler says that it is difficult to distill the logic of the Department of Justice’s institutional opposition to an FCPA compliance defense given the Department’s current recognition of a de facto compliance defense.

This de facto compliance, Koehler says, is exhibited in at least three instances: the Department’s declination decisions, it’s opinion procedure releases, and the terms and conditions of the Department’s non-prosecution and deferred prosecution agreements.

Koehler cites “a growing chorus of former Department of Justice officials who support a compliance defense” and asserts that the Department’s current opposition to a compliance defense “seems grounded less in principle than an apparent attempt to protect its lucrative FCPA enforcement program.”

 


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