News in April about Wal-Mart’s bribery embroglio in Mexico killed the debate about FCPA reform. Too bad. Parts of that debate were productive and could have led to some welcome changes.
The best reform idea we heard came from Billy Jacobson, the former assistant chief for FCPA enforcement at the DOJ. Just weeks before the New York Times broke the Wal-Mart story, he proposed a good-faith compliance test. If companies could meet five simple criteria, they would avoid prosecution.
His five elements were: self reporting, clean hands by senior management, cooperation with the government, robust remedial measures, and an in-place compliance program before any violations happened.
Jacobson, now co-general counsel and chief compliance officer at Weatherford International Ltd., said the DOJ could adopt his proposal as part of its enforcement practices. That way, Congressional action — always a tough proposition — wouldn’t be needed. (The DOJ may already be reforming some aspects of enforcement, according to a post this month by Mike Koehler.)
What do we like about Jacobson’s idea? It encourages companies to have strong compliance programs. It protects them against rogue employees. And it keeps those rogue employees on the hook for prosecution.
That’s a nice balance of carrots and sticks.
The Wal-Mart shock is wearing off. It’s time to revive this part of the FCPA reform debate.