Tuesday, October 26, 2010

High Marks for Mounting U.S. Foreign Anti-Bribery Efforts -Part 2 of a 5-Part Series

Guest Blogger - T. Markus Funk

U.S. Anti-Corruption Efforts At An All-Time High

The U.S. government has placed the fight against bribery of foreign public officials at the top of its list of critical law enforcement priorities. The October 21, 2010, OECD Phase 3 report concludes that this focus translates into vigorous law enforcement action:

  • Prosecutions have increased from less than 5 per year between 2001 and 2005, to almost 19 per year between 2006 and 2009.
  • Between 1998 and September 2010, some 50 individuals and 28 companies were convicted of foreign bribery-related offenses, while 69 individuals and companies have been held civilly liable for foreign bribery.
  • Of the 36 individuals who have been convicted of FCPA violations and sentenced during this period, 25 received sentences of imprisonment, with the average sentence being slightly more than 30 months.
  • 26 companies have been publically sanctioned for foreign bribery under increasingly-popular non-prosecution agreements and deferred prosecution agreements.
  • Since 1998, the U.S. has imposed over $2 billion in bribery-related criminal fines against legal persons.

Rounding out this impressive -- and peerless -- enforcement picture, the OECD report emphasizes the U.S. government's imposition of massive sanctions for accounting misconduct and money laundering related to foreign bribery. Consider, for example, that between 1998 and 2003, the maximum monetary sanctions leveled against a company in an FCPA case was $2.5 million. But in the past 6 years some 23 companies were sanctioned to the tune of more than $10 million each, and during roughly the same time U.S. disgorgement actions have reeled in more than $1 billion in foreign bribery proceeds. In fact, in one case, the U.S. government imposed sanctions totaling $800 million against a single company.

The SEC, a federal agency increasingly in anti-bribery motion, obtains civil penalties separate from DOJ criminal fines for foreign bribery-related misconduct. In the first 9 months of 2010 alone, the SEC obtained over $404 million in disgorgement, interest and civil penalties from 13 companies and 8 individuals.

And the business and legal communities have certainly noticed these ramped-up, multi-faceted (and multi-agency) enforcement efforts. According to the OECD report, business leaders credit heavy sanctions and amplified prosecutions for having "significantly raised the FCPA‘s profile," resulting directly in more finely-tuned anti-bribery measures and internal controls, and more carefully-calibrated compliance systems.

For the full text of the OECD Phase 3 report: http://www.oecd.org/dataoecd/10/49/46213841.pdf

The corresponding USDOJ press release can be found at http://blogs.usdoj.gov/blog/archives/1020

By T. Markus Funk (mfunk@perkinscoie.com). Markus is a partner in Perkins Coie's Investigations and White Collar Defense Group. Markus spent the past 10 years as an Assistant U.S. Attorney in Chicago, Illinois, most recently serving in U.S. Attorney Patrick Fitzgerald's Public Corruption and Organized Crime Section. Markus' full bio is at www.perkinscoie.com/mfunk

(tmf)

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Comments

The tyranny of cronyism and corruption in these United States is of far greater a serious nationally significant issue than the battles of overseas enforcements.

Hypocrisy in the doing!

Posted by: Laser Haas | Oct 27, 2010 9:42:46 AM

I've always been amused that the government, on the one hand, condemns corporations for bribing foreign officials, but itself "bribes" foreign officials rather shamelessly.
You cannot eliminate bribery of foreign officials (or local officials) if it is, as often, a necessity of doing business and the other guys (from other countries or the U.S.) are doing it. Many companies will, I suspect already have, as they do in other areas, set up foreign corporations to do the dirty work.

Posted by: Lawrence Goldman | Oct 28, 2010 7:40:49 AM

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