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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
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Bill Waite
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Russell A. Stamets
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Richard Bistrong
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Eric Carlson
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In state of the FCPA speech, Caldwell says Pilot Program is working

DOJ criminal division chief Leslie Caldwell used a wide-ranging talk Thursday at George Washington University Law School to defend the six-month old Pilot Program and to describe the Justice Department’s FCPA enforcement efforts and the current state of corporate compliance.

The DOJ Pilot Program is working, Caldwell said.

“[W]hat we’re seeing is that the Pilot Program is having an effect. Although I can’t share precise figures, anecdotally we’ve seen an uptick in the number of companies coming in to voluntarily disclose potential FCPA violations.”

Companies can qualify for the program by self reporting FCPA violations, cooperating, and disgorging profits made from bribes.

Companies that qualify can receive a 50 percent discount on fines they might face under the U.S. Sentencing Guidelines.

Speaking last week at the FCPA Blog NYC Conference, former AAG Lanny Breuer said it’s still early days for the Pilot Program. But he said the underlying problem of prosecutorial discretion in how to run investigations and who to charge is still there.

“There are very desirable benefits to the program, but they’re still discretionary,” Breuer said.

Caldwell said Thursday the Pilot Program is part of the DOJ’s effort to be transparent.

Transparency about “expectations and the consequences of corporate misconduct” is a way to promote “lawful corporate behavior,” she said.

“The guidance provided by the Pilot Program is designed to enable companies to make more rational decisions when they learn of foreign corrupt activity by their agents and employees,” Caldwell said.

*     *    *

In her talk Thursday, Caldwell said both the DOJ and FBI have beefed up their anti-corruption enforcement resources. The DOJ has doubled the number of prosecutors involved in the cases and the FBI has added three new squads.

She emphasized expanding international cooperation, mentioning recent enforcement actions involving Alstom, VimpelCom, Och-Ziff, Embraer, and Venezuela’s PDVSA.

Anti-corruption enforcement will continue to be a high priority.

International graft presents “public safety concerns,” Caldwell said.

Indeed, criminal networks of all kinds, including narcotics traffickers, cyber criminals, terrorists and human traffickers, often take advantage of countries whose commitment to the rule of law is weakened by the corruption of its officials. And, as we’ve seen in the more extreme cases, corrupt regimes have created safe havens for criminals and terrorists by giving them a secure base from which they can orchestrate their activities.

Caldwell said since 2009 the DOJ “has convicted more than 65 individuals in FCPA (Foreign Corrupt Practices Act) and FCPA-related cases, and resolved criminal cases against more than 65 companies with penalties and forfeiture of approximately $4.5 billion.”

Caldwell spoke at length about compliance. She said over the past 20 years “the role of compliance has evolved, becoming more sophisticated, industry-specific and metrics-oriented.” 

Still, she said, a “consistent theme of the fraud, corruption, money laundering and sanctions cases we’ve brought over the years has been a failure of corporate compliance.”


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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1 Comment

  1. I think Ms. Caldwell and the DOJ should ask: "And why did the compliance programs fail? If companies continue to fail in their establishment of true Compliance SME(DIFFERENT than legal) that is positioned to succeed with independence, empowerment, line of sight, seat at the table and adequate resources to do the job well, then they should not be surprised when their programs fail to discharge the enormous mandate to find, fix and prevent misconduct. Hopefully, now with Hui Chen on board, the DOJ can begin to distinguish those programs that are mere window-dressing from those that are structured to succeed. If Wells Fargo had a true Compliance SME on board, the problems with its incentive system would have been flagged, and problems of retaliation uncovered. AS WE have seen in Walmart, VW, GM and many others, expecting a Legal manager to design and manage compliance properly (including confidential employee helpline snd followup investigations),is a big mistake.

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