Justice Department Beefs Up Foreign Corruption Act Enforcement
Pappalardo, John, Bombach, Kara, National Defense
* In recent years, U.S. government officials have acknowledged the increasing focus on Foreign Corrupt Practices Act (FCPA) enforcement. The government has been transparent about its priority to target individuals and companies who make improper payments or offer anything of value to foreign government officials for purposes of obtaining or retaining business.
For U.S. and international businesses and their individual officers, directors and employees, however, such generalized statements about FCPA enforcement priorities take on new significance when put in terms of hard numbers of investigations, fines and convictions.
In 2009, the Department of Justice set a record for numbers indicted and tried for Foreign Corrupt Practices Act violations, yet the enforcement momentum in 2010 has actually escalated. Consider these 2010 milestones:
* Justice imposed the most criminal penalties in FCPA-related cases than any previous 12-month period--well over $1 billion. In 2009 and 2010 combined, the department charged over 50 individuals and collected nearly $2 billion.
* Approximately 35 defendants now await trial on corruption charges in Houston, Miami, Los Angeles and Washington, D.C.
* Justice ranks have grown to over a dozen attorneys dedicated solely to prosecuting corruption cases.
* The department has deployed sting and undercover operations to reveal suspected FCPA violations, most notably with the high-profile indictment of 22 individuals in the military and law enforcement products industry in early 2010. The indictments resulted from Justice's most extensive use ever of undercover law enforcement techniques in a Foreign Corrupt Practices Act investigation, and represent the single largest prosecution in the history of the department's FCPA enforcement efforts.
In front of this backdrop of increased resources and attention, a distinct Foreign Corrupt Practices Act trend is emerging, namely, the internationalization of the enforcement efforts. The unit works not only with other Justice Department divisions, but also with foreign counterparts. This theme will doubtless color the nature of future enforcement.
Internally, Justice's FCPA unit now receives assistance from prosecutors in the department's asset forfeiture and money laundering section. The section recently initiated a new Kleptocracy Asset Recovery Initiative to target and secure proceeds of foreign corruption that have been laundered into or through the United States.
On the multinational front, many of the 144 member states who have ratified the U.N. Convention Against Corruption have implemented the required local laws providing for multinational enforcement cooperation, as well as extradition. Member states--including the United States--under the convention must render specific forms of mutual legal assistance in gathering and transferring evidence for use in court, and to extradite offenders. Member states must also implement measures to support the tracing, freezing, seizure and confiscation of proceeds of corruption.
Member states include the United States and European nations, as well as countries with a historical record of systemic corruption, such as China and Nigeria, signaling a tidal shift in tolerance for corrupt conduct globally. …