Aon Corporation — the world’s biggest insurance broker — disclosed on November 8, 2007 an internal investigation of possible violations of the U.S. Foreign Corrupt Practices Act and non-U.S. anticorruption laws. AON said in its latest Form 10-Q that it has self-reported the investigation to the U.S. Department of Justice, the Securities and Exchange Commission and others, and that it has already agreed with prosecutors to toll any applicable statute of limitations.
A standard feature of deferred prosecution agreements is a waiver of the statute of limitations for claims not already time barred. But an agreement to toll any applicable statute of limitations during an internal FCPA investigation is unusual. Did the DOJ ask for the waiver to protect itself against another legal setback like the one it suffered in the high-profile FCPA prosecutions of Victor Kozeny and his co-defendants, Frederic Bourke, Jr. and David Pinkerton? The three were on trial for an alleged scheme to bribe senior government officials in Azerbaijan to ensure the privatization of the state oil company. But in June 2007, the U.S. District Court for the Southern District of New York dismissed all FCPA and related counts against them because the five-year statute of limitations had run. The DOJ has appealed, saying the limitations period should have tolled automatically while prosecutors tried to collect evidence from foreign countries. Meanwhile, a court in the Bahamas ruled that Kozeny cannot be extradited to the U.S. on the dismissed FCPA charges.
We’re speculating, but the DOJ must be anxious to avoid more statute of limitations problems in FCPA prosecutions. So will the government now routinely demand waivers of the statute of limitations defense at preliminary stages of self-reporting by corporations? Will it then use the responses to measure the corporations’ level of “cooperation” under the U.S. Federal Sentencing Guidelines? And will there be an outcry against the practice, as there was against the DOJ’s pressure on corporations to waive the attorney-client privilege or be labeled uncooperative for purposes of plea bargaining and sentencing?
Chicago-based Aon has 43,000 employees in 500 offices in more than 120 countries. Here is the complete FCPA disclosure from its quarterly report for the period ending September 30, 2007:
“Following inquiries from regulators, the Company commenced an internal review of its compliance with certain U.S. and non-U.S. anti-bribery laws, including the U.S. Foreign Corrupt Practices Act (‘FCPA’). An outside law firm with significant experience in the area is overseeing the review. Aon has advised the U.K. Financial Services Authority, the U.S. Securities and Exchange Commission, the U.S. Department of Justice, and certain other non-U.S. regulators of the review and has agreed with the U.S. regulators to toll any applicable statute of limitations pending completion of the review. Based on current information, the Company is unable at this time to predict when the review will be completed or what regulatory or other outcomes may result.”
Aon Corporation trades on the New York Stock Exchange under the symbol AOC.
View Aon’s Form 10-Q for the period ending September 30, 2007 Here.