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Harry Cassin
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Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Bill Steinman
Contributing Editor

Waters So Deep

There are things we know we don’t know, said the former boss at the Pentagon. But then again, he added, there are things we don’t know we don’t know. That distinction came to mind as we read the latest email from a correspondent who always holds us to a high standard. He said this:

“I, and other readers of the blog, could benefit from a discussion of what distinguishes a criminal violation of the FCPA’s antibribery provisions brought by the DOJ from a civil violation of the antibribery provisions brought by the SEC. Of course, prosecutorial discretion is relevant, but I do not see in the statute any distinction between the two (i.e. no additional elements necessary for a criminal charge vs. a civil charge). Compare this to the books and records and internal control provisions which state at 15 USC 78m(b)(4) that ‘no criminal liability shall be imposed’ for violation of the books and records and internal control provisions except for ‘knowing circumvention’ or ‘knowingly failing’ to implement a system of internal controls or ‘knowing falsification’ of books and records.”

Our correspondent said he’d been thinking about this since the SEC charged Halliburton Company and KBR Inc. with civil antibribery violations, while the DOJ charged only Kellogg Brown and Root LLC with criminal violations, even though the SEC’s complaint sets forth all the “criminal” elements of an antibribery violation.

So what’s the story?

Well, we’re stumped. As we told our correspondent, we’ve read the U.S. Attorney’s Manual 9-28.000 / Principles of Federal Prosecution of Business Organizations (here). But we still don’t know how decisions get made by the folks at the DOJ and SEC about who to charge with criminal or civil antibribery offenses. To which our correspondent replied, “From a policy standpoint, you hate to think that whether behavior x is charged civilly or criminally depends on the whim of a prosecutor and not proving additional elements needed to charge a crime.”

So here’s an invitation to all readers. Tell us, if you know, how decisions are made to charge companies or individuals under the Foreign Corrupt Practices Act with violations of the antibribery provisions either criminally or civilly. Is everything left to prosecutorial discretion? Are there published guidelines? How about unpublished guidelines? Secret handshakes?

To promote this discussion, we’ve adopted our own Stimulus Plan. The best response — make that the best several responses — will earn a copy of Bribery Abroad.

Download the DOJ’s criminal information against Kellogg Brown and Root LLC here.

Download the SEC’s February 11, 2009 civil complaint against KBR Inc. and Halliburton Company here.
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2 Comments

  1. The distinction between a criminal antibribery violation and a civil antibribery violation lies not in having to prove additional elements of the offense but rather in a significant difference in the burden of proof that must be satisfied with respect to each of the identical elements of the offense.

    The burden of proof always rests on the government to prove every element, though of course it may shift to a defendant to prove an affirmative defense.

    But the criminal standard of proof requires proof beyond a reasonable doubt. That is the standard DOJ must satisfy to convict a defendant of an FCPA antibribery violation. The civil standard is a preponderance of the evidence or, as it is sometimes put, the balance of probabilities. In other words, more than 50 percent probable. That is the standard the SEC must satisfy to establish a civil antibribery violation.

    As your post properly noted, the accounting provisions of the FCPA do include an additional mens rea element to establish criminal liability for violation of the internal controls or books and records provisions. The distinction noted above with respect to the burden of proof pertain as well.

  2. Burden of proof only matters at trial. Because there are few FCPA trials, this is another area where the lack of an adversarial system creates an FCPA vaccum resulting in the law meaning what the enforcement agencies say it means.


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