Public Interest Groups Weigh in on FCPA Guidance

A coalition of about 30 public interest groups has organized to defend the Foreign Corrupt Practices Act (FCPA).

Known as Defend FCPA, the informal coalition has been meeting with members of Congress, Congressional staff, the Securities and Exchange Commission (SEC) and the Department of Justice to discuss proposed changes to the law and the Department’s upcoming FCPA guidance.

And last week the coalition sent the Department and the SEC a letter outlining its concerns and pushing back against the Chamber of Commerce’s drive to weaken the guidance and weaken the law in Congress.

The letter was signed by Raymond Baker of Global Financial Integrity, Jonathan Kaufman of Earth Rights International, Amol Mehra of the International Corporate Accountability Roundtable, Sarah Pray of Open Societies Foundations, Corinna Gilfillan of Global Witness, and Jennifer Green of the Human Rights Litigation Clinic at the University of Minnesota Law School.

The letter calls on the Department to reject calls by the Chamber of Commerce to create an FCPA compliance defense.

“Compliance programs should not constitute a defense to FCPA violations,” the group writes.

The letter also addresses the issue of self-reporting under the FCPA.

“The guidance should include provisions on self-reporting as part of the broader discussion on compliance programs and cooperation with investigations, but the Department should maintain discretion to reward self-reporting according to a broad range of criteria and considerations,” the coalition says.

And the coalition says “the guidance should not include a willfulness requirement for companies because corporations are not human beings, and such a standard would be a disincentive to the creation of adequate monitoring systems.”

The coalition seems to agree with the Chamber that more information about the Department’s declination decisions should be made public.

“We have no reservations about the guidance including provisions for the Department to provide more information about decisions not to prosecute,” the coalition says.

A key organizer of the coalition is Heather Lowe, legal counsel and director of government affairs for Global Public Integrity.
Lowe said that the Chamber’s push to reform the FCPA triggered the public interest response.

“Like most non-profits in the United States, we certainly hadn’t been focusing on the Foreign Corrupt Practices Act before the U.S. Chamber of Commerce’s proposal came out,” Lowe told Corporate Crime Reporter in an interview last week.

“The reason for that is that the FCPA was chugging along quite well. It was finally being enforced. Prosecutions were up. So, we certainly weren’t paying attention to it until the Chamber’s proposals came out.”

“At that time, I decided – we really need to be paying attention to these. I spoke to my boss about it. And given his concerns about business corruption, he was very keen for us to be working heavily on this.”

Lowe said the letter is a follow up to meetings the group has been having with the Department of Justice and the SEC.

“We have been working in a coalition of 30 to 40 organizations and individuals who are concerned about the Chamber’s proposals since they have been introduced,” Lowe said.

“We have been meeting with various members of Congress, the Department of Justice and the SEC on this issue for over a year now.”

“So, this is an ongoing process for us. It isn’t something that came out of the blue. This letter follows a meeting we had with the SEC and Justice Department as part of their consultant process they had for the guidance.”

“This is a follow up letter to that meeting.”

“The six groups that have signed onto this letter are those groups that were at the meeting with the Department of Justice.”

Lowe says that the coalition has been meeting with “the same group the Chamber has been meeting with – the Fraud Section – Chuck Duross and his team. And at the SEC, the enforcement group.”

Why shouldn’t there be a compliance defense in the case of a rogue employee ignoring the company’s state of the art compliance program?

“To me, a rogue employee is acting completely on their own with nobody saying they should be doing what they are doing,” Lowe says. “You don’t have a situation where the company authorized, controlled or directed the actions of that person. If he is rogue, that is the definition.”

“Under the current guidance that exists from the Department of Justice, it is clear that in order to be found liable, a company is going to have to authorize, direct or control the actions of that individual.”

“So, why are we even discussing this?”

[For the complete transcript of the Interview with Heather Lowe, see 26 Corporate Crime Reporter 22(13), May 29, 2012, print edition only.]


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