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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

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Someone had to be the first FCPA defendant

A headline in the Washington Post on August 3, 1979 said: “Justice Department Wins First Victory Under Foreign Corrupt Practices Act.”

The story started this way:

The Justice Department unit set up to prosecute American corporations that make payoffs to foreign officials won its first court victory here yesterday: a guilty plea by the New York firm that distributes the postage stamps of Cook Islands, a tiny country 1,800 miles off the coast of New Zealand.

Kenny International Inc. and its director, Finbar B. Kenny, entered the plea and were immediately fined a total of $50,000 in connection with their interference with the 1978 Cook Islands elections.

Kenny also agreed yesterday to plead guilty in the Cook Islands in connection with the scandal that has grown out of the election, and to testify against the island’s former prime minister.

That was the DOJ’s first FCPA enforcement action. There wouldn’t be another for three years; in 1982, four American companies were prosecuted, including International Harvester. No other individuals would face FCPA charges from the DOJ until 1983.

The Washington Post’s long account of the DOJ’s Kenny enforcement action mentioned the FCPA by name only once.

Attorneys for Kenny said the plea was a technical violation of the Foreign Corrupt Practices Act of 1977, and noted that the current Cook Islands premier “is urging” that Kenny continue to run the country’s philatelic bureau.

Since that first enforcement action, the DOJ has brought about 300 FCPA cases. 

*    *     *

The SEC had a faster start with FCPA enforcement. It brought its first civil action in April 1978 against New York-based Page Airways and six officers and directors.

The SEC accused the defendants of bribing Asian and African government officials, including the president of Gabon, the chief minister of Sabah (Malaysia), and Ivory Coast’s ambassador to the U.S., to sell Gulfstream II executive jets.

The company settled without paying any penalties. Charges against Page’s officers and directors were dismissed.

The SEC brought another civil enforcement action later in 1978 against Katy Industries and two directors. They were accused of bribing an Indonesian official to win oil and gas rights. The defendants all settled without paying penalties. 

The SEC then brought one civil enforcement action in each of 1979, 1980, and 1981. After that, SEC enforcement nearly dried up, with just four FCPA actions in total through 2000.

From 2001, when there were five actions, FCPA enforcement at the SEC gained speed. The SEC has now brought about 200 FCPA enforcement actions.

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

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1 Comment

  1. Richard, you have just shown how folding together a few numbers, a few dates, and a few anecdotal fragments can recreate a concise and memorable history lesson. Thank you.


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