Reforming FCPA enforcement: a debate about amnesty

At first glance, the Department of Justice’s recent enforcement of the FCPA is staggering, with over $350 million in fines collected last year alone. Record-setting years have produced widespread attention in the media and a DOJ unwilling to revise its FCPA enforcement procedures. 

A recent debate sponsored by the Texas Law Review and its online companion journal, See Also, considers how the DOJ’s enforcement of the FCPA might be expanded, particularly whether an amnesty program is advisable.

My Note, “Placing the Foreign Corrupt Practices Act on the Tracks in the Race for Amnesty” (pdf here) argues that an FCPA amnesty program would lead to enforcement actions that would not otherwise exist because of (i) information asymmetries, (ii) inefficient and inconsistent enforcement by the DOJ, and (iii) disincentives for companies and their executives to voluntarily disclose behavior violative of the FCPA under the current enforcement regime.

After discussing these shortcomings in current FCPA enforcement and evaluating other proposals to reform FCPA enforcement, my Note outlines an amnesty program—modeled after the Antitrust Division’s Corporate Leniency Policy—to incentivize reports of illegal conduct that would not otherwise be discovered by enforcement authorities. My Note argues that with protection for the first-to-report company or executive, the DOJ could create a race for amnesty in FCPA enforcement. Furthermore, only such an approach attacks the source of FCPA violations—trust among coconspirators.

This debate also includes two Responses published in See Also.  Response authors address my argument and suggest further areas of reform. Professor Christopher R. Leslie of the University of California–Irvine School of Law wrote “Replicating the Success of Antitrust Amnesty” (pdf here), and Messrs. Robert W. Tarun and Peter P. Tomczak of Baker & McKenzie LLP responded with a brief comment (pdf here).

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Stephen Fraser is a 2012 graduate of The University of Texas School of Law and former Online Content Editor of the Texas Law Review. He can be contacted here.