Your search result

Caldwell Says FCPA Pilot Program Leading to Uptick in Voluntary Disclosures

The Justice Department’s Foreign Corrupt Practices Act Pilot Program is leading to an uptick in voluntary disclosures.


That’s according to Leslie Caldwell, head of the Department’s Criminal Division.

Caldwell said that under the one year pilot program, announced earlier this year, a corporation’s decision “not to disclose wrongdoing will result in a significantly different outcome than if the company had voluntarily disclosed the conduct and cooperated in our investigation.”

“And what we’re seeing is that the pilot program is having an effect,” Caldwell said.  “Although I can’t share precise figures, anecdotally we’ve seen an uptick in the number of companies coming in to voluntarily disclose potential FCPA violations.”

“Perhaps one thing that’s motivating these companies is that they’ve seen that there are very real upsides to coming in and cooperating.  In the pilot program we said that companies who meet certain criteria—including timely disclosure and full cooperation—are eligible to receive an outright declination.  And over the last six months, we have furthered our commitment to transparency and have made public a number of declination letters to show that this result is attainable for companies that come in and cooperate.”

“But we remain committed to ensuring that those who violate the law don’t profit from their crimes, even when we decline to prosecute. That is why the pilot program requires that companies disgorge the proceeds of bribery in order to be eligible for the full benefits, including possible declination, of the program.”

“In most of our FCPA cases, we work in parallel with the SEC, and disgorgement of proceeds is usually part of the SEC resolution. Under the pilot program, even when the SEC is not involved in an investigation, disgorgement is still a prerequisite.  Last month, for example, we announced separate resolutions with two private companies, where we declined to prosecute significant FCPA violations, and disgorgement was required. We make those resolutions public, partly to show others that the pilot program provides real benefits, and partly so that the public understands that corporate wrongdoers are not being allowed to keep profits earned through bribery.  I believe that increased transparency in our FCPA charging decisions will continue to encourage voluntary corporate self-disclosure of overseas bribery, and thus more prosecutions of the individuals responsible for those crimes, and ultimately less crime.”

“Beyond the pilot program, we have also sought over the past couple of years to more clearly communicate our analysis and evaluation of the considerations laid out in the nine Filip Factors.”

“Arriving at a corporate resolution requires a unique balancing of the Filip Factors in each case.  In each of our corporate resolutions – be it a guilty plea, deferred prosecution agreement (DPA) or a non-prosecution agreement (NPA) – we provide a written explanation of the key factors that led to our decision.  The factual statements filed with resolution documents typically include a detailed recitation of the misconduct, as publicly admitted by the company.  The actual agreements outline the factors that were significant in determining the type of resolution, such as the corporation’s cooperation – if any – and remedial measures. We publicly announce corporate resolutions and pleas, and make the documents available on our website. We are trying to provide the public with a greater insight into our thought processes, analyses and conclusions.”

“In addition to their use as enforcement tools, our plea agreements, DPAs and NPAs provide a transparent explanation of the department’s expectations when it comes to compliance programs.  Companies seeking to measure their own compliance programs need look no further than many of the resolutions we have made publicly available.  There is perhaps no more transparent guidance to a specific corporation than the terms in a DPA or NPA, especially when we set forth remedial or compliance measures we expect.”

“Over the course of my career, I have found that when it comes to affecting corporate conduct, nothing has a more powerful impact than concrete examples.  Such examples have traditionally stemmed from publicized corporate prosecutions, as it is more challenging to publicize investigations in which we decline to file charges.”

“The challenge we continue to work to address is how to appropriately publicize these cases while taking into consideration the legitimate concerns of the companies and individuals who were under investigation.  We are continuing to look for additional ways to better inform the community about cases in which we decline to prosecute, as there is often as much to learn from a decision not to bring charges as a decision to prosecute.  We seek not just to prosecute, but to encourage and reward good corporate citizenship, and increasing transparency can play an important role in achieving that goal.”

Copyright © Corporate Crime Reporter
In Print 48 Weeks A Year

Built on Notes Blog Core
Powered by WordPress