Quinn Emanuel Partner Ben O’Neil on the FCPA and Brazil

Quinn Emanuel partner Ben O’Neil is a white collar defense attorney. At the top of his list of practice areas is – Brazil practice.

Ben O’Neil
Quinn Emanuel
Washington, D.C.

O’Neil has represented major Brazilian companies in Foreign Corrupt Practices Act (FCPA) actions before the Justice Department and the Securities and Exchange Commission.

Most recently, O’Neil represented J&F Investimentos, the holding company for JBS, the largest meat processing company in the world.

J&F pled guilty and will pay a criminal penalty of $256 million to resolve charges that the company paid millions of dollars in bribes to government officials in Brazil in exchange for obtaining financing and other benefits for J&F and J&F-owned entities.

J&F founders Joesley Batista and Wesley Batista and their companies J&F Investimentos and JBS also settled a case with the Securities and Exchange Commission (SEC) by agreeing to pay nearly $27 million to resolve charges arising out of the bribery scheme. 

When you go to your web page, there are ten practice areas or so, but the first one is listed as Brazil practice. How did you come to have a Brazil practice?

“I don’t speak Portuguese, I don’t speak Spanish,” O’Neil told Corporate Crime Reporter in an interview last week. “It has been an incredible ride. Our firm’s Brazil practice began with Mike Carlinsky in New York. He did a couple of large civil matters for Brazilian clients. He had a lot of success. Mike created a reputation for himself and the firm in Brazil based on that work.” 

“Then beginning in about 2015, when Lava Jato (Operation Car Wash) got going in earnest in Brazil, the first matter we did down there, through the relationship Mike had developed through his civil work, was for a private investment bank called BTG Pactual. We did a large investigation for them. That led to another larger investigation for the Odebrecht Group. That resulted in a large criminal settlement in both Brazil and the United States.”

“As Odebrecht was coming to a close, we were retained by a company called J&F Investimentos and its founders Wesley and Joesley Batista in connection with trying to seek a resolution in the United States.”

“J&F owns a number of companies, the largest of which is JBS, which is now maybe the largest animal protein company in the world.”

You represented J&F in that case. The settlement was announced last month. The company pled guilty and paid $256 million to resolve this foreign bribery case. 

It seems as if when there is a criminal guilty plea by a major corporation in a U.S. proceeding, you can almost bet that it’s a foreign company. Do you sense that and why is that the case?

“Your instinct is generally right. It’s largely because U.S. companies are generally ahead of the game when it comes to internal controls and compliance. It is something they are used to. When they do business overseas, they are bringing to that market their U.S. style compliance program.” 

“For foreign companies, it has been a slower process, in particular for Brazilian companies. There was a way of doing business for many years that was generally accepted. And then beginning in the mid-2010s, they became the subject of large criminal prosecutions both in Brazil and in other jurisdictions. It’s really more than anything a function of the experience that U.S. companies have with those types of controls.” 

“Not every foreign company that has been prosecuted is the result of their compliance program lagging behind. You can have rogue actors. You can have odd situations. But a lot of foreign companies have had to play catch up. And sometimes that has resulted in prosecutions.” 

This company settled a case with Brazilian authorities and they paid significant penalties in Brazil. Did the Justice Department’s anti-piling policy kick in in this case?

“In effect, the resolution reached in the United States was tied closely to the resolution that had been reached in Brazil.” 

“They weren’t done at the same time and as a result, the company didn’t get full credit for the amount that it paid in Brazil. Instead, it got 50 percent credit. The resolution essentially came from the same facts. The crime is different.” 

“It’s similar in some ways to the resolution we reached on behalf of the Odebrecht Group. There was a resolution in Brazil to be paid over a number of years as well as a U.S. component and guilty plea.”

Generally speaking, when you are representing a company in an FCPA case, can you sense whether there is a whistleblower involved or not?

“I think you can. Often, the fact that there is a whistleblower will be explicit. Some complaint will come into an anonymous hotline or something like that. Or it may be information that you would expect would have had to have come from someone inside. In general, it is relatively transparent when the source of the investigation is a whistleblower. But not always. You can have situations where it is difficult to identify that.”

There have been a lot of FCPA settlements this year. It seems to undermine the argument that under the Trump administration the Justice Department is going slow on corporate crime prosecutions. 

“If you look at what the Department of Justice has done over the last year in terms of corporate crime prosecutions, it’s stunning. The knee jerk reaction is – Trump is friendly to business so there will be fewer prosecutions. But it doesn’t work that way at the Department level. Having been at the Fraud Section – the people there are largely unaffected by the tone and tenor of the President. It is not a surprise to me. Knowing the people who are in charge of the Fraud Section, it is not a surprise that they have been as active and successful as they have been. I have not seen a significant drop in FCPA prosecutions.”

The election in the United States is being held today. It seems as if the Justice Department has been settling and bringing a big number of major corporate crime cases in the run up to the election – J&F, Goldman Sachs, Purdue Pharma, the Google antitrust case. Did you sense that the Department has been pushing these cases out the door in anticipation of the election?

“I don’t think we experienced that directly. There might be some move typically at the end of an administration to finalize cases that have been on the table for the previous years. But the people doing this work at the line level or even at the supervisory level in the Fraud Section have been there and are likely to be there regardless of who wins today. So maybe on the margins, maybe there is a push to resolve cases before an anticipated turnover of an administration. But largely, the people doing the work are non political and stay that way.”

In the J&F case, there had already been a resolution in Brazil of a similar case. Is it easier for the Justice Department to bring its cases when there has already been a settlement somewhere else in the world?

“It is. The Department of Justice has for many years encouraged other jurisdictions to appropriately prosecute bribery related conduct. Some jurisdictions have greatly improved in that respect. Look at Brazil. That is a significant change. There is no question that the Department’s job is made easier if they have the support of another jurisdiction and that jurisdiction is pursuing a case. In many ways, it’s the reason they have encouraged this kind of stepped up prosecution.” 

“Eventually, if this trend continues, you may see more of these cases being handled in these local jurisdictions, rather than the Department feeling it has to police the world.”

Was JBS charged in this case?

“It was not. It was the holding company, J&F, which is the holding company for JBS and a number of other entities. JBS was not subject to the guilty plea.”

JBS was charged by the SEC.

“JBS, J&F and the Batista brothers resolved a case with the SEC for causing Pilgrim Pride’s internal books and records not to be accurate.”

Did you represent the companies during the Brazil investigation?

“No. The companies did have U.S. counsel at the time of the Brazilian resolution. But for whatever reason, there was no simultaneous U.S. resolution at that time.” 

During your representation of the companies, were you going back and forth to Brazil, or could you handle this case from DC?

“I was in Brazil much of the time. We were retained in the beginning of 2018. For the next eight months I was there probably twice a month. As for my practice as a whole, prior to COVID, I would be gone internationally at least a week a month. So much has to be done in person. If you are conducting interviews with employees, you would prefer to do it in person. The document collection process needs to be done in person. Sitting with people and understanding the facts of the case – it is best done in person. We have all had to adapt over the last six months. We have done a good job of that. But it is certainly different.”

Do you anticipate Brazil will stay at the top of your practice?

“Things have changed significantly in Brazil. Lava Jato as a driver is probably winding down. Maybe the head of my page could switch to South American practice. There are a number of other jurisdictions in South America that I would expect would be the subject of Department of Justice scrutiny in the next couple of years. Having done a lot of this work already, that is an advantage. Every case is different and you have to approach it that way. South America will remain an important part of my practice moving forward.”

[For the complete q/a format Interview with Ben O’Neil, 34 Corporate Crime Reporter 43(13), Monday November 9, 2020, print edition only.]

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