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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
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

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Eric Holder and the international coalition against graft

FCPA enforcement has waxed and waned during Eric Holder’s six-year tenure as U.S. Attorney General. But that’s not the whole picture. During the same time, global anti-corruption enforcement has picked up speed and is more robust today than ever. Enforcement actions are breaking out all over — from Japan to Canada, from the UK, Italy, France and Germany to Australia, and across Scandinavia to Africa and South America. The enforcement world is now a different place.

Holder said last week he’ll leave his post when a replacement is confirmed. He’ll be most remembered for his domestic agenda and accomplishments. But his impact on the global fight against corruption shouldn’t be overlooked. It has been profound.

He led the way for law enforcement agencies and regulators from multiple jurisdictions to share information and evidence — the only way most large-scale bribe payers can be successfully prosecuted.

With persistence and persuasion he helped create an international coalition against graft. How? He spoke for corruption’s victims. From a stage in St. Petersburg, Russia, he called graft a gateway crime that opens the door for drug running, money laundering, illegal arms dealing, human smuggling and trafficking, and terrorism.

At a talk in Morocco, he refused to accept that corruption is ever a cultural norm and just “the way business is done.”

He drove the international effort to freeze and recover the ill-gotten gains of some of the world’s worst kleptocrats. And he pushed the practice of regular meetings among law enforcement agencies from OECD countries, where attendees were held accountable for their enforcement efforts.

The DOJ made some mistakes while Holder was AG. The botched Africa sting case will always be an example of a misguided FCPA investigation and faulty prosecution. It finally ended with justice for the 22 individual defendants when the DOJ dismissed their indictments with prejudice, but by then a lot of damage had been done.

But on the positive side, Holder above all pushed for more cross-border cooperation. Overseas bribery always crosses borders and fighting it well requires an international coalition. Holder used his high office to help build that coalition. Today we’re seeing more prosecutions by other countries. That’s a sign of health and strength in the global war against graft, even if FCPA enforcement numbers go up and down.

*      *     *

If there was one moment when a “Holder Doctrine” emerged in the fight against corruption, it was May 31, 2010. He was in Paris, France, speaking to the Organisation for Economic Co-Operation and Development. He talked about why graft is the enemy. He reviewed past progress and successes, and gently scolded the recalcitrant countries. And he issued a call for action by all of his OECD counterparts who were in the audience.

Here’s part of what he said:



Thank you, Mr. Secretary General. I am honored to be here with you — and with so many champions, and partners, in the global fight against corruption.

Standing before you today is not only professionally but also personally meaningful to me. As some of you may know, I began my career as a prosecutor in the Public Integrity Section of the Justice Department. The lessons I learned there, prosecuting official corruption cases, have informed my entire career.

I learned, for example, that the costs of corruption are immeasurable. I learned that corruption erodes, even destroys, the faith of citizens in their governments. And I learned that its effects are felt most severely not by the powerful, but by the powerless. . .

The struggle against corruption, as President Obama has put it, “is one of the great struggles of our time.” As I speak, a corrupt official somewhere is enjoying undeserved and illegal proceeds. He may be driving a brand-new luxury car. She may be filling her off-shore bank account with tainted cash. They may be traveling first-class on all-expenses-paid holidays.

But what about the countless law-abiding citizens to whom these officials pledged their faithful and honest service? In many cases, they are struggling to survive, working to overcome the perils of poverty, disease, and malnutrition. It’s ugly but true — and wrong.

But corruption is more than wrong. For the global economy, corruption is dangerous. Bribery in international business, for example, may center on shell companies and wire transfers, but no matter where — or how — it happens, the corrosive result is the same: stymied development, lost confidence, and distorted competition.  The result is unfairness, not justice; the consequence is economic decay, not development.

The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a world economy of 30 trillion dollars. That’s a staggering three percent of the world’s economy. And the impact is particularly severe on foreign investment. In fact, the World Bank estimates that corruption serves, essentially, as a 20-percent tax.

Put simply, corruption undermines the promise of democracy. It imperils development, stability, and faith in our markets.  And it weakens the rule of law.

And, of course, this is true not for any one country or any one region. Corruption is a global problem that knows no borders. And that’s why corruption demands a truly global response — one that knows no limits on collaboration.

With these realities and principles as its guideposts, the OECD has led this response. In the face of critics who said it could not be done, the original parties to the Working Group on Bribery established the Anti-Bribery Convention more than a decade ago, gaining new signatories over the years, from South Africa to Israel.
And in the face of another chorus of critics — those who said that the Convention would not change how member countries and their corporations behaved — the OECD has shown otherwise. . . 

In short, the OECD has redefined “business at usual.” A little over a decade ago, foreign bribery was not only legal in many countries; it was tax deductible. That has changed. When there are simultaneous corporate criminal resolutions on both sides of the Atlantic — and press reports of coordinated corruption-related search warrants by law enforcement in different countries — the developments cannot be ignored by would-be criminals.

As Attorney General, I have made combating corruption one of the highest priorities of the Department of Justice. For decades — since the passage of the Foreign Corrupt Practices Act of 1977 in the wake of the Watergate investigations — U.S. law enforcement has pursued bribe payers of all stripes: large corporations and small companies; powerful CEOs and low-level sales agents; U.S. companies and foreign issuers; citizens and foreign nationals; direct payers and intermediaries.

As we have become more sophisticated and aggressive in our pursuit — employing more undercover investigations and new technologies — the results have come to speak for themselves. Since 2004, we have prosecuted 37 different corporations for foreign bribery-related offenses, levying criminal penalties in excess of $1.5 billion. . . .

But besides mere punishment, our FCPA prosecutions have resulted in remedial efforts by many companies, such as enhanced compliance programs to detect and deter foreign bribery.  The way those companies do business has changed — permanently and for the better.

Also in this time period, we have criminally charged nearly 80 individuals. And the pace is accelerating. Let me be clear, prosecuting individuals is a cornerstone of our enforcement strategy because, as long as it remains a tactic, paying large monetary penalties cannot be viewed by the business community as merely “the cost of doing business.” The risk of heading to prison for bribery is real, from the boardroom to the warehouse. . .

[But] none of the progress the United States has made would have been possible without the long-term cooperation of our law enforcement partners around the globe – cooperation fostered by relationships established through the OECD. . . .

In the 2008 Siemens prosecutions, for example, the Department of Justice worked closely with the Munich Public Prosecutor’s Office to investigate and resolve Siemens’s global corruption scheme, resulting in approximately $1.6 billion in penalties and fines in Germany and the United States. We remain deeply grateful to our German law enforcement counterparts for their extraordinary leadership and cooperation.

My Department has also worked closely with the United Kingdom’s Serious Fraud Office in a number of cases, such as the BAE Systems plc case, which resulted in a guilty plea and more than $450 million in penalties.  
. . .

But still, we must do more. Put simply, the credibility of the Anti-Bribery Convention depends on it.

For all the progress, it is important to note that many of the 38 OECD member countries have no criminal convictions to date. This is not because bribes are not paid by companies in these OECD countries. It is because investigating and prosecuting corruption is difficult, requiring more will, resources, experience, and effort than most crimes. It also requires a sincere commitment. As you know, it involves gathering evidence from foreign jurisdictions, pursuing wealthy and powerful individuals, and enduring lengthy challenges in the courtrooms.

Still, despite these challenges, I urge the countries to which this statistic applies to deepen their commitment to this global effort by dedicating the appropriate resources, such as prosecutors and investigators focused exclusively on foreign bribery cases, and by prioritizing the prosecution of corruption, no matter where the evidence leads.

But frankly, every member of the Working Group, including the United States, can do more to engage in robust international cooperation. In particular, we welcome the OECD’s pronouncement, in its most recent Council Recommendation related to the Anti-Bribery Convention, that it will host regular, voluntary meetings of prosecutors to promote the sharing of best practices and to foster greater cooperation.

I understand there is a prosecutors’ meeting scheduled for June 14th to address mutual legal assistance, and I encourage all Working Group members to send prosecutors to this critical discussion. My Department will send three senior prosecutors, and I know the Securities and Exchange Commission will also send senior regulators, including the chief of the SEC’s Foreign Corrupt Practices Act (FCPA) Unit.

We would especially welcome the participation of China, India, Indonesia, Thailand, and Russia at future plenaries, including the one on June 14th. We’ve all been encouraged by the recent evidence of greater cooperation on the parts of these nations and by the concrete steps Russia has taken toward accession to the Anti-Bribery Convention.

All that said, prosecution is not, nor should it be, the only means of increasing our efforts to curb global corruption. We will continue to work with companies that pursue good-faith internal investigations and voluntarily reform their practices. Specifically, we call on businesses to change the tone at the top, to re-evaluate their compliance programs and internal controls, to find ways to encourage a culture of compliance, and to strongly consider voluntary disclosures of past violations of the law.

Here, too, not surprisingly, the OECD has taken the lead, with the Good Practice Guidance of the OECD Working Group on Bribery [pdf]. The guide provides state-of-the-art guidance, backed by 38 countries, on many important issues facing companies daily. I commend the Working Group for this forward-thinking document, and I encourage companies to use it as a benchmark in their own compliance programs.

On all these fronts – investigation, prosecution, and, where possible, voluntary cooperation – partnership is not a luxury; it is a necessity. Only by working together, across borders and jurisdictions, can we ensure that the ideals set forth in the Anti-Bribery Convention more than a decade ago are realized today and in the future.  And only by working together will the promise of democracy be fulfilled, and will the rule of law be respected, across the globe. We should not, and must not, settle for anything less.

I am grateful to each of you for your time today and, more importantly, for your partnership.  And I am looking forward, more than ever before, to our many joint successes to come in the days, weeks, and months ahead.
Thank you all.


 Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

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