Thomas Fox | Contributing Editor
Thomas Fox is a contributing editor of the FCPA Blog.
One of my favorite virtual friends is Dr. Andrea Bonime-Blanc, the CEO and founder of GEC Risk Advisory LLC. While her career and current consulting is wide-ranging, I want to focus on her recent book, The Reputation Risk Handbook, which should be read by any compliance practitioner, senior executive or board member.
Many of us scratched our head in 2010 when the Oracle FCPA enforcement action came out. We didn’t understand how a company could be prosecuted, even civilly by the SEC for internal controls or book and records violations, without evidence that bribes had been paid. But after the past few months, I think Oracle was a precursor to a strict liability standard that’s coming to FCPA enforcement.
Oil is hovering around $50 per barrel. For most of the U.S. economy this drop in oil prices has provided a much-needed economic boost. One piece on the NPR website said “economists have suggested the big drop in oil prices is a gift to consumers that will propel the economy.”
There still seems to be some debate as to whether the FCPA, the UK Bribery Act, and other international focused anti-bribery legislation aids in the fight against terrorism. But the continuum from corruption to crime to terrorism is well-established and arguing that laws such as the FCPA have no place in a country’s overall security regime seems to be me to be naive at best.
Recently one of the most unlikely sources for praise of the Foreign Corrupt Practices Act (FCPA) came out to inform us all that corporations are the cornerstone of FCPA compliance and enforcement. You may be surprised to find out it was the U.S. Chamber of Commerce. It came in the Chamber’s Amicus Curie filing in a case currently being considered by the Texas Supreme Court, Shell v. Writt, which is unusual because it is a state supreme court case, which touches on the Foreign Corrupt Practices Act (FCPA).
Last week FIFA announced that it had considered the investigation into allegations of corruption into the awarding of the 2018 World Cup tournament to Russia and the 2022 World Cup tournament to Qatar and found “any improper behaviour in the bidding process for the tournament was ‘of very limited scope.’”
GlaxoSmithKline PLC (GSK) may well be a watershed in the global fight against bribery and corruption. Behavior and conduct, which was illegal under Chinese law but previously tolerated and even accepted by Chinese government officials, quickly became a quagmire that the company was caught in when charges of corruption were leveled against them last year.
One of the oft-made criticisms regarding the Department of Justice (DOJ) around its enforcement of the Foreign Corrupt Practices Act (FCPA) is its the use of Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs) somehow pervert the course of justice. Speaking from the perspective of a former in-house type, I have argued that corporations desire DPAs and NPAs because they bring certainty. Not only in ending an enforcement action but also in knowing your obligations going forward; they bring certainty in setting the fines and penalties to be paid for a FCPA violation. And, of course, if you enter into a DPA or NPA you bring your corporate client the certainty that you will not ‘Arthur Anderson’ your organization out of existence.
The entry of the Chinese government into the international fight against corruption and bribery is truly a game-changer. While there may be many reasons for this very public move by the Chinese government, it is clear that foreign companies are now on notice. Doing business the old fashioned way will no longer be tolerated.
Last week, the Fifth Circuit Court of Appeals issued its decision in Asadi v. GE Energy (USA), No 12-20522, on appeal from the United States District Court for the Southern District of Texas.