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Pop Quiz: Who controls criminal FCPA investigations and prosecutions?

Among the weird facts about the FCPA is who can decide to launch a criminal investigation or bring an enforcement action, and which government lawyers along the way will do the heavy lifting.

A DOJ policy published in 2013 reserves all decisions about bringing FCPA cases to the Criminal Division — that is, the top brass at Main Justice (DOJ HQ) in DC. The restriction applies not only to FCPA prosecutions but even to FCPA-related investigations.

Title 9 of the Justice Manual (formerly known as the United States Attorneys’ Manual) at Section 9-47.110 says:

No investigation or prosecution of cases involving alleged violations of the antibribery provisions of the Foreign Corrupt Practices Act (FCPA) of 1977 (15 U.S.C. §§ 78dd-1, 78dd-2, and 78dd-3) or of related violations of the FCPA’s record keeping provisions (15 U.S.C. § 78m(b)) shall be instituted without the express authorization of the Criminal Division.

That means there isn’t a U.S. Attorney in the country who, on his or her own, can launch an investigation of possible FCPA offenses or bring an FCPA prosecution.

What happens if one of those U.S. Attorneys somehow learns about potential FCPA offenses?

“Any information relating to a possible violation of the FCPA should be brought immediately to the attention of the Fraud Section of the Criminal Division,” the Justice Manual says.

That’s the drill even when evidence of potential FCPA offenses is uncovered “during the course of an apparently unrelated investigation.”

If the DOJ’s Fraud Section at Main Justice decides to investigate an FCPA case, any prosecution that might follow must be handled by Trial Attorneys from the Fraud Section, the Justice Manual says.

Involving other lawyers, including U.S. Attorneys, requires a further nod from the Assistant Attorney General for the Criminal Division.

(The AAG — appointed by the President of the United States with the advice and consent of the Senate — sits atop the Criminal Division and above the Fraud Section, among others.)

According to the Justice Manual, all FCPA investigations and prosecutions require “close coordination” with the SEC and other interested federal agencies. The SEC brings civil FCPA enforcement actions and leaves criminal enforcement to the DOJ.

So is the FCPA just a power grab by Main Justice, a clever piece of DC stage management?

Not according to the DOJ.

The Justice Manual says the investigation and prosecution “of particular allegations of violations of the FCPA will raise complex enforcement problems abroad as well as difficult issues of jurisdiction and statutory construction.”

Investigations may involve interviewing witnesses in foreign countries concerning their activities with high-level foreign government officials, the Justice Manual says.

“In addition, relevant accounts maintained in United States banks and subject to subpoena may be directly or beneficially owned by senior foreign government officials.”

In other words, FCPA investigations and enforcement actions can step on a lot of diplomatic toes and make a hash out of U.S. foreign policy.

“For these reasons,” the Justice Manual says, “the need for centralized supervision of investigations and prosecutions under the FCPA is compelling.”

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