Effective today, the Department of Justice’s Criminal Division has launched a one-year “pilot program” in the Fraud Section’s FCPA Unit as part of the agency’s effort to promote both transparency and accountability. At the end of the one-year pilot period, the Fraud Section will determine whether to extend or modify the program.
In a statement, Leslie Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division, said one her priorities in the Criminal Division has been “to ensure that we have a robust and transparent enforcement program targeting violations of the Foreign Corrupt Practices Act (FCPA).”
In recent months, the Justice Department has significantly enhanced its ability to investigate and prosecute FCPA cases, including by adding 10 additional prosecutors to its FCPA Unit, increasing the size of that unit by more than 50 percent, Caldwell explained. “At the same time, the FBI has established three new squads of special agents devoted to FCPA investigations and prosecutions.”
At the same time, the Justice Department is “strengthening our coordination with foreign counterparts—sharing leads, making available essential documents and witnesses, and more generally working together to reduce criminals’ ability to hide behind international borders,” she added.
The pilot program is part of this overall effort. The FCPA Unit, Caldwell explained, provides guidance to prosecutors for corporate resolutions in FCPA cases, and is designed to motivate companies to voluntarily self-disclose FCPA-related misconduct, fully cooperate with the Fraud Section, and, where appropriate, remediate flaws in their controls and compliance programs.
“We believe that increased transparency in our FCPA charging decisions should encourage voluntary corporate self-disclosure of overseas bribery, and thus more prosecutions of the individuals responsible for those crimes,” Caldwell said.
The pilot program describes what the Justice Departments mean by “voluntary self-disclosure,” “full cooperation,” and “remediation,” Caldwell said. “It also explains the credit available to companies that, in fact, voluntarily self-disclose FCPA misconduct, fully cooperate with investigations, and remediate.”
The pilot program builds on the September 2015 Individual Accountability memorandum issued by the Deputy Attorney General.
Not all are impressed by the news. “Just by holding a press conference and ascribing a new label to something does not make something new,” Mike Koehler (aka the “FCPA Professor”), wrote in his blog. Although the objectives of the Justice Department are “laudable,” he wrote, this new pilot program is not the best answer if the Justice Department wants to accomplish its objectives.
“Rather, as current Fraud Section Chief Andrew Weissmann (and several other former high-ranking DOJ officials) have recognized, an FCPA compliance defense is the best incentive to get companies to voluntary disclose FCPA violations by employees or agents within its organization.”