Saturday, January 28, 2012
Mike Koehler has a forthcoming article in the Wisconsin Law Review, titled, "Revisiting a Foreign Corrupt Practices Act Compliance Defense." The abstract states:
This article asserts that the current FCPA enforcement environment does not adequately recognize a company’s good faith commitment to FCPA compliance and does not provide good corporate citizens a sufficient return on their compliance investments. This article argues in favor of an FCPA compliance defense meaning that a company’s pre-existing compliance policies and procedures, and its good faith efforts to comply with the FCPA, should be relevant as a matter of law when a non-executive employee or agent acts contrary to those policies and procedures and in violation of the FCPA. This article further argues that a compliance defense is best incorporated into the FCPA as an element of a bribery offense, the absence of which the DOJ must establish to charge a substantive bribery offense.
Part I of this article contains a case study to demonstrate the type of conduct that would be covered by an FCPA compliance defense. Contrary to the claims of some, an FCPA compliance defense would not eliminate corporate criminal liability under the FCPA or reward "fig leaf" or "purely paper" compliance programs. A compliance defense would not apply to corrupt business organizations, activity engaged in or condoned by executive officers, or activity by any employee if it occurred in the absence of pre-existing compliance policies and procedures.
Part II of this article places an FCPA compliance defense in the context of the broader issue of corporate criminal liability and acknowledges the work of other scholars and commentators who have called for a general compliance defense to corporate criminal liability. This section channels that work into the specific context of the FCPA and argues that the unique aspects and challenges of complying with the FCPA in the global marketplace warrant a specific FCPA compliance defense.
Part III of this article highlights that an FCPA compliance defense is not a new idea or a novel idea. This section contains an overview of the FCPA legislative history of a compliance defense, most notably the compliance defense passed by the House of Representatives in the 1980’s. The justification and rationale for a compliance defense then pales in comparison to now as most U.S. companies engage in international business during an era of aggressive FCPA enforcement. This section also demonstrates that several countries, like the U.S. that are signatories to the Organization for Economic Cooperation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the "OECD Convention"), have a compliance-like defense in their domestic laws.
Against this backdrop, Part IV of this article details the DOJ’s institutional opposition to an FCPA compliance defense, yet argues that the DOJ already recognizes a de facto FCPA compliance defense albeit in opaque, inconsistent and unpredictable ways. Thus, an FCPA compliance defense accomplishes, among other things, the policy goal of removing factors relevant to corporate criminal liability from the opaque, inconsistent, and unpredictable world of DOJ decision making towards a more transparent, consistent, and predictable model best accomplished through a compliance defense amendment to the FCPA. This section concludes by highlighting the growing chorus of former DOJ officials who support an FCPA compliance defense and argues that the DOJ’s current opposition to a compliance defense seems grounded less in principle than an attempt to protect its lucrative FCPA enforcement program.
Part V of this article concludes by highlighting certain policy objectives advanced by an FCPA compliance defense. This section argues that an FCPA compliance defense will better incentivize more robust corporate compliance, reduce improper conduct, and thus best advance the FCPA’s objective of reducing bribery. An FCPA compliance defense will also increase public confidence in FCPA enforcement actions and allow the DOJ to better allocate its limited prosecutorial resources to cases involving corrupt business organizations and the individuals who actually engaged in the improper conduct.
Sunday, January 22, 2012
Attorney Jack Fernandez (Zuckerman Spaeder LLP) has an interesting Essay for the the ABA's White Collar Book entitled, An Essay Concerning the Indictment of Lawyers for Their Legal Advice. It is here - Download 3533275_1 DOCX (3) (3)
Friday, January 20, 2012
I highly recommend Professor Brandon L. Garrett's new piece in the Virginia Law Review titled, "Globalized Corporate Prosecutions." The abstract states:
"In the past, domestic prosecutions of foreign corporations were almost unheard of. This has changed dramatically just in a few years. Federal prosecutors now advertise a muscular approach targeting major foreign firms and even entire industries. High-profile prosecutions of foreign firms have shaken the international business community. Very little has been known about these cases; scholars assumed such prosecutions were rare or would not result in convictions. After all, corporate criminal liability is itself a form of American Exceptionalism. Few foreign countries hold corporations criminally accountable. To study U.S. prosecutions of foreign firms, I assembled a database of more than 300 publicly reported corporate guilty plea agreements from the past decade and I analyzed previously unexamined U.S. Sentencing Commission data archives on corporate prosecutions. Not only are large foreign firms prosecuted with some frequency, but more surprising, they typically plead guilty and are convicted. In this Article, I explore the puzzle of that unnoticed guilty plea dynamic and the disquieting problems raised by convictions of foreign firms generally. Federal prosecutors have dramatically expanded enforcement against foreign firms in several areas. I develop theoretical justifications for the evolving prosecution approach. Yet I conclude by arguing that prosecutions of foreign firms should be more clearly limited and evaluated. A series of reforms could accomplish that goal, including prosecutorial guidelines incorporating norms of comity, foreign law and governance norms. Unless prosecutors and courts carefully assess these important prosecutions, U.S. prosecutors will not remain preeminent the global corporate criminal law enforcers."
Sunday, January 15, 2012
Professors Brandon Garrett and Jon Ashley have an incredible new website that is a library of 1495 federal corporate plea agreements in which an organization was convicted. They intend to update this collection of agreements. The site has the agreements by date, U.S. Attorney Office district and name. The site also provides links to other helpful data concerning corporate convictions. This is an amazing website that provides a wealth of information.
Saturday, January 14, 2012
New Article - Big Law's Sixth Amendment: The Rise of Corporate White-Collar Practices in Large U.S. Law Firms
Check out Charles D. Weisselberg and Su Li's article available on SSRN here.
Over the last three decades, corporate white-collar criminal defense and investigations practices have become established within the nation’s largest law firms. It did not used to be this way. White-collar work was not considered a legal specialty. And, historically, lawyers in the leading civil firms avoided criminal matters. But several developments occurred at once: firms grew dramatically, the norms within the firms changed, and new federal crimes and prosecution policies created enormous business opportunities for the large firms. Using a unique data set, this Article profiles the Big Law partners now in the white-collar practice area, most of whom are male former federal prosecutors. With additional data and a case study, the Article explores the movement of partners from government and from other firms, the profitability of corporate white-collar work, and the prosecution policies that facilitate and are in turn affected by the growth of this lucrative practice within Big Law. These developments have important implications for the prosecution function, the wider criminal defense bar, the law firms, and women in public and private white-collar practices.
Monday, December 19, 2011
Saturday, December 17, 2011
In August 2011, the United States brought a landmark antitrust lawsuit to prevent the merger of two of the nation’s four largest mobile wireless telecommunications services providers, AT&T Inc. and T-Mobile USA, Inc. But why are so many elected officials asking the Obama administration to intercede in the Department of Justice’s lawsuit to force a settlement? Why are they approving a merger that would likely lead to higher prices, fewer jobs, less innovation, and higher taxes for their constituents? Does it have anything to do with the money they are receiving from AT&T and T-Mobile?
This Essay examines the recent lobbying efforts in the AT&T/T-Mobile merger. AT&T spent $11.69 million on political lobbying in the first six months of 2011. In addition to hefty campaign contributions, it lobbied lawmakers with $52 steaks and $15 gin-and-cucumber puree cocktails.
But lobbyists, as this Essay outlines, are not the problem. The problem is the combination of lax campaign finance rules and antitrust’s prevailing legal standard, a flexible fact-specific rule of reason.
Sunday, December 11, 2011
Intersesting new article (available on Lexis and Westlaw) by Dr. Thomas White, JD, PHD. titled, "Limitations Imposed on the Dual Sovereignty Doctrine by Federal and State Governments." He states:
"To ameliorate some of the unfairness inherent in multiple prosecutions by different sovereigns, the federal government and many states have established limitations, or even prohibitions, on subsequent prosecutions after an initial prosecution in which double jeopardy has attached. Part I of this inquiry discusses the dual sovereignty doctrine, focusing on its relationship to the Fifth Amendment prohibition of multiple prosecutions and punishments. Part II addresses the greater potential for multiple prosecutions occasioned by the increasing "federalization" of criminal law. Next, Parts III and IV, respectively, examine how the federal and state governments have addressed (or failed to address) the prospect of multiple prosecutions under the dual sovereignty doctrine. Part V concludes with suggestions aimed at resolving the issues of double jeopardy and dual sovereignty."
Saturday, December 10, 2011
Over the past several years, the marketing practices of large pharmaceutical companies have come under intense scrutiny. The government spends years investigating and building cases against pharmaceutical manufacturers that engage in illegal promotional activities to promote their drugs but does not prosecute them. Instead, the government enters into Corporate Integrity Agreements (CIAs) with the pharmaceutical giants. As a result, the pharmaceutical manufacturers are able to avoid the collateral consequences of conviction, such as exclusion from Medicare and Medicaid. Participation in Medicare and Medicaid is crucial for a pharmaceutical manufacturer because the government spends over $60 Billion per year through those programs on reimbursements for prescription drugs. In return for remaining eligible for Medicare and Medicaid reimbursements for their drugs, the manufacturer pays the government a huge fine and agrees to structural changes to the company designed to prevent future marketing violations.
The CIA seems like a reasonable response to the marketing violations until the pharmaceutical company engages in illegal marketing practices while still under the CIA for the previous marketing violation. In those situations, the government remains unwilling to pursue the pharmaceutical manufacturers in court and seek exclusion from Medicare and Medicaid. Rather than pursue exclusion, the government has entered into successive CIAs with pharmaceutical manufacturers and collected additional fines. The government enters into these agreements because exclusion of the manufacturer from participating in Medicare and Medicaid has devastating consequences that spill over to innocent patients, employees, and stockholders. Not only does the impact of the exclusion hit innocent third parties, but its imposition on the manufacturer substantially outweighs the harm the manufacturer inflicts through its improper marketing practices. The penalty for improperly marketing one drug is exclusion of all drugs produced by that manufacturer from Medicare and Medicaid. It is the government’s unwillingness to harm innocent third parties and its reluctance to impose a disproportionate penalty on drug manufacturers that leads them to CIAs. Thus, the problem is not that the government uses CIAs to combat health care fraud; it is that the government lacks penalties of increasing severity to impose when a manufacturer violates an existing CIA.
This Article argues that neither the exclusion of manufacturers from Medicare and Medicaid nor the use of Corporate Integrity Agreements coupled with large fines is an effective deterrent for pharmaceutical manufacturers that repeatedly engage in illegal marketing activities to promote their drugs. In particular, it argues that CIAs fail to deter drug manufacturers from engaging in illegal promotional practices because the penalty imposed and the cost of compliance with the CIA are significantly lower than the profits that a pharmaceutical company can obtain by illegally marketing its drugs. Further, the government’s willingness to enter into multiple CIAs with repeat offenders of the marketing rules rather than exclude them from Medicare and Medicaid substantially diminishes the ability of CIAs to deter illegal promotional activities. Finally, this Article argues that there are viable alternatives to be used in place of or in conjunction with CIAs, such as funding clinical trials, compulsory licensing, corporate officer liability, and targeted exclusion, that would be more effective deterrents for repeat offenders. Each of these remedies could be used to increase the severity of punishment when a one-time offender becomes a repeat offender. This Article concludes that these proposed measures would be more successful than CIAs at increasing compliance and enforcing integrity in drug promotion.
Sunday, December 4, 2011
Saturday, October 8, 2011
New Scholarship -New Crimes and Punishments: A Case Study Regarding the Impact of Over-Criminalization on White Collar Criminal Cases
Lucian Dervan, Southern Illinois, has a new article titled, "New Crimes and Punishments: A Case Study Regarding the Impact of Over-Criminalization on White Collar Criminal Cases." The abstract states in part:
"While much has been written about the plethora of negative consequences resulting from over-criminalization generally, it is worth noting that not everyone believes these negative consequences outweigh the potential benefits that might flow from the two types of over-criminalization discussed in this article. First, some might argue that repeatedly increasing the statutory maximums for white collar offenses is justified because doing so means culpable individuals will receive longer prison sentences reflective of their conduct and, in addition, others will be deterred from committing such crimes. Second, some might argue that enacting broad new criminal provisions in areas already criminalized is justified because such enactments provide prosecutors with the tools necessary to ensure that creative and sophisticated white collar criminals are brought to justice in larger numbers, thereby deterring others from committing similar offenses. This article will examine the accuracy of the underlying premises utilized by both of these “justifications” for the over-criminalization discussed herein – (a) the assumption that increasing statutory maximums results in ever lengthening sentences for individual white collar defendants, and (b) the assumption that enacting additional laws that are vague and overlapping in areas already criminalized results in increased levels of enforcement against white collar criminals. Through such an examination, this article seeks to understand whether new crimes and punishments really achieve their intended goals and, if not, what this means for the over-criminalization debate and, in particular, the over-criminalization “justifications” discussed above."
Monday, September 19, 2011
New Scholarship - Overcriminalization 2.0: The Symbiotic Relationship Between Plea Bargaining and Overcriminalization
Lucian Dervan (Southern Illinois) has a new article titled, "Overcriminalization 2.0: The Symbiotic Relationship Between Plea Bargaining and Overcriminalization" that appears in George Mason's Journal of Law, Economics and Policy. The abstract states:
"In discussing imperfections in the adversarial system, Professor Ribstein notes in his article entitled Agents Prosecuting Agents, that "prosecutors can avoid the need to test their theories at trial by using significant leverage to virtually force even innocent, or at least questionably guilty, defendants to plead guilty." If this is true, then there is an enormous problem with plea bargaining, particularly given that over 95% of defendants in the federal criminal justice system succumb to the power of bargained justice. As such, this piece provides a detailed analysis of modern-day plea bargaining and its role in spurring the rise of overcriminalization. In fact, this article argues that a symbiotic relationship exists between plea bargaining and overcriminalization because these legal phenomena do not merely occupy the same space in our justice system, but also rely on each other for their very existence."
Wednesday, September 14, 2011
New Scholarship - Public Perceptions of White Collar Crime Culpability: Drawing Lines Amid Moral Ambiguity
Stuart P. Green (Rutgers-Newark) and Matthew B. Kugler (Lehigh) have a new piece titled "Public Perceptions of White Collar Crime Culpability: Drawing Lines Amid Moral Ambiguity." The abstract states:
"Although we are accustomed to thinking of "crime" as involving the most unambiguously blameworthy sorts of conduct in which citizens can engage, the reality is more complex, especially when we look at certain kinds of "white collar" behavior. In this set of empirical studies, participants were asked to assess a series of scenarios that presented potentially criminal white collar behavior. Lay persons made fairly fine-grained distinctions when deciding which behaviors they thought worthy of criminalization. In some cases, the distinctions made by respondents were consistent with current law. For example, in the case of fraud, participants distinguished between misrepresentations that went to the heart of the bargain and misrepresentations that were extraneous. In other cases, however, there were significant divergences between lay subjects’ views and current law. In the case of perjury, for example, participants drew a weaker distinction between lying in court under oath and lying to police while not under oath, and between literally false statements and literally true but misleading statements, than does the law. There are also divergences with respect to bribery: respondents sought to criminalize both commercial bribery and payments accepted by an office-holder in return for performing a non-official act, while American federal law criminalizes neither."
Saturday, September 10, 2011
"This Article first summarizes the quest during the past 30 years for a single economic goal. It discusses why this quest failed. Four oft-cited economic goals (ensuring an effective competitive process, promoting consumer welfare, maximizing efficiency, and ensuring economic freedom) never unified antitrust analysis. After discussing why it is unrealistic to believe that a single well-defined antitrust objective exists, the Article proposes how to account antitrust’s multiple policy objectives into the legal framework. It outlines a blended goal approach, and the benefits of this approach in providing better legal standards and reviving antitrust’s relevance."
Tuesday, August 16, 2011
High B. Kaplan and Tom P. Taylor do a wonderful review of this past Supreme Court term in BNA's Criminal Law Reporter. They include discussion of the Global-Tech decision. It is titled, "Prosecutors, Scholars,
and Defense Lawyers Pick Most Important Decisions of Last Term."
Reproduced with permission from Criminal Law Reporter, 89 CRL 698(8/10/2011). Copyright 2011 by
The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>
With many thanks to BNA for allowing me to post this.
Monday, July 11, 2011
On Oct. 27-28, 2011, the ABA and the AALS will present a joint conference, Reducing Reliance on Incarceration, at the Liaison Capitol Hill Hotel in Washington, D.C. The first event of the conference, on the afternoon of Thursday Oct. 27th, is a workshop for scholarly papers relating to the conference theme. Participants will present their work in a roundtable format. Abstracts or drafts will be shared among presenters and discussants in advance of the workshop. Workshop presenters must commit to attending both days of the conference, which will include a plenary and multiple break-out sessions on the topic of reducing reliance on incarceration. For a description of the program, please visit http://www.americanbar.org/content/dam/aba/events/criminal_justice/2011colloquium.authcheckdam.pdf. Workshop presenters will be responsible for their own travel and hotel costs, and will be required to pay the conference registration fee. To apply to workshop a paper, please email an abstract of 500 words to both [email protected] and [email protected] by Sept. 1, 2011. Space is limited and presenters will be chosen by members of the organizing committee.
Sunday, July 10, 2011
If you have an obstruction case premised on section 1519, you might want to check out this article by T. Markus Funk (Perkins Coie) in NACDL's Champion Magazine. It's titled, "Honey Laundering, A Toilet Flush, and a Governor's Yahoo Account: The New Age of Anticipatory Obstruction of Justice."
It is hard to move businesses in different directions. I like to use the analogy of turning a ship around -- it takes time, dedication and a steady hand.
Corporate governance is shifting again. We had the revolution of Sarbanes-Oxley in the early 2000s and now we have a new movement afoot. It is no coincidence that aggressive changes in white collar enforcement coincide with significant changes in the corporate governance landscape.
The newest trend -- which I fully endorse -- is the creation of corporate compliance committees. For most businesses, a separate compliance committee is an effective means to focus on difficult compliance issues, demonstrate a management commitment to compliance, and facilitate communications on compliance issues within an organization. By establishing such a committee, a company sends a very clear message. But the committee has to be more than just window dressing -- it has to have the support, the resources, and dedicated members with real expertise in the compliance area.
I like to use another analogy -- a compliance committee is like your dashboard on your car, telling you how fast you are going, how much fuel you have, and allowing you to signal others on the road.
A compliance committee should help your company navigate your legal obligations by empowering your decision makers with the right information. It serves a proactive role, separate from the audit committee which has a number of critical obligations related to Sarbanes-Oxley enforcement.
The compliance committee is responsible for ensuring that the company is complying with key legal and regulatory obligations. It is your primary vehicle by which to manage risk.
The compliance committee must actively gather and disseminate information reporting on overall compliance efforts. It must also communicate compliance issues and business risks to the right people. The right people include responsible managers, who are directly responsible for significant day-to-day business decisions.
The compliance committee must include one or more independent members who understand the regulatory environment, as well as the principles of good governance. This has a number of advantages. The independent member can test reports and statements, and mine discussions for issues that may otherwise go uncovered; may be able to share broad industry information and trends; and is likely to be less susceptible to a company’s internal culture (which might be reluctant to discuss certain risks and violations).
A well-structured compliance committee is your ultimate protection against potential legal and regulatory violations. I encourage others to look at such committees as part of an overall compliance program.
Sunday, June 26, 2011
A new article on SSRN by Martin H. Pritikin and Ezra Ross, titled "The Collection Gap: Underenforcement of Corporate and White-Collar Fines and Penalties" - forthcoming in Yale Law & Policy Review. SSRN's abstract:
Civil and criminal monetary sanctions (fines, penalties, and restitution orders) are primary tools in the enforcement activities of the modern administrative state, particularly in the context of corporate wrongdoing. Although the enforcement literature debates the fairness and efficiency of imposing corporate sanctions, once imposed, those sanctions must be collected to be effective. Yet federal and state agencies are leaving untold billions in collectible fines unrecovered. This is a problem of both theoretical and practical importance, yet it has been largely overlooked. This Article, for the first time, amasses the evidence of pervasive governmental undercollection; rebuts the argument that the problem is due to factors beyond governmental control; examines the root causes of undercollection; and recommends solutions that address the political and economic circumstances that impede reform.
Thursday, June 23, 2011
The American Bar Association, Business Law Section, Business Bankruptcy Committee, Criminal Justice Section, White Collar Crime Committee and the Golden Gate University School of Law proudly host a national dialogue about the freezing, seizing and distributing entity assets and operating the entity at the intersection of complex white collar crime prosecutions and business bankruptcy. The conference will serve as part of an ongoing discussion about lessons learned, recurring issues and best practices. The conference will feature leading voices from the federal district and bankruptcy bench, Department of Justice, Criminal and Civil Divisions from "Main Justice" and prominent U.S. Attorney's Offices, and Securities and Exchange Commission, as well as prominent white collar crime and business bankruptcy practitioners and academics. The conference is scheduled for Friday and Saturday, November 4-5, 2011 at Golden Gate University School of Law in San Francisco, CA.
The conference organizers seek proposals for papers of publishable quality that explore this intersection between white collar crime prosecutions, business bankruptcy. Particularly, we seek papers discussing the freezing, seizing and distributing of entity assets, operating the entity, and the different practices and goals inherent to criminal prosecution, civil enforcement and business bankruptcy proceedings. A committee of academics will review paper proposals that may contribute to our discussion. Both essay and article length papers are welcome.
Proposals should describe the thesis, its general support, and the proposed format of the final paper. Proposals should be no more than 3-pages. We will review proposals as received, beginning on June 1, 2011, with the submission deadline of July 15, 2011. Authors of selected proposals will then submit a draft of the paper in advance of the November conference and by October 1, 2011. During the November conference, authors of the selected proposals will present a draft of their paper and the committee of academics and conference participants will review the draft papers in advance of the conference and participate in workshops for selected papers during the conference.
To submit a proposal or draft paper, or for more information about the conference, participants or call for papers, contact Professor Karen Gebbia ([email protected]) or Wes Porter ([email protected]), or by phone at (415) 442-6600. The attachment should be in Word or PDF format. Late submissions will not be accepted. An e-mail acknowledging submission will be sent promptly to each author. Decisions will be communicated on a rolling basis with final decisions no later than August 1, 2011.