The Cost Of Certainty

Fomer federal prosecutor Michael VolkovDespite the might of the FCPA, the awesome firepower of the DOJ, and the best practices of the world’s most compliant companies, bribery will always be among us. Nothing we do can completely eliminate it.

A question, then, is what happens to companies that try to comply with the FCPA but are victimized by rogue employees who won’t follow the rules?

At yesterday’s senate hearing investigating FCPA enforcement, lawyer Michael Volkov — who spent 17 years as a federal prosecutor in D.C. — proposed a “limited corporate amnesty program.” The idea, he said, first came from retired judge Stanley Sporkin, who helped write the FCPA when he was director of the SEC’s Enforcement Division.

To be exempt from prosecution in most cases, companies would be required to:

• Conduct a compliance review for the past five years.

• Retain an independent law and auditing or accounting firm to jointly conduct the review.

• Disclose the results of the review to the DOJ, SEC, and the public.

• If compliance lapses are discovered, take all steps to prevent further violations.

• Agree to be subject to a five-year continuing compliance review process.

• Retain a compliance monitor who would certify compliance each year to the DOJ and SEC.

In return, companies would have immunity from prosecution during the five years except in cases of egregious non-compliance created by a lawless corporate culture.

Volkov’s limited corporate amnesty program would give compliance-minded companies certainty. Currently, he said, the voluntary disclosure process is mysterious and unpredictable, with no guarantee of benefits for companies making disclosures.

With the certainty, however, would come even more government intrusion. Would business leaders accept the cost? We don’t know the answer.