Last month in remarks to the New York City Bar White Collar Crime Institute Deputy Attorney General Rod Rosenstein announced a new “anti-piling on” policy for global anti-corruption enforcement actions. This was the formal extension of the “one-pie” concept previously articulated in 2016 by Kara Brockmeyer, then-chief of the FCPA Unit at the SEC, and Daniel Kahn, (then and current) head of the Justice Department FCPA Unit.
The concept was that enforcement authorities were moving toward one total cost to anti-corruption violators that would be equitably split up by authorities where the corruption occurred or by the countries that had jurisdiction. Kahn noted that companies that self-disclosed to multiple regulators and extensively remediated, were more likely to garner credit with U.S. regulators for fines paid to overseas authorities. Now one-pie has morphed to anti-piling on and is enshrined in the U.S. Attorney’s Manual.
But both one-pie and anti-piling on were not gifts by the Justice Department. They both required certain actions by companies coming before the Justice Department. In recent remarks to the International Bar Association’s Anti-Corruption conference, Kahn said to obtain the benefits of anti-piling on, a company must not try to disclose anti-corruption violations piecemeal to regulators across the globe but must do so simultaneously and then cooperate with all the regulators. Kahn said, “We’ve had companies try to silo off various countries. That’s not going to be beneficial to the company at the end of the day. It results in a much worse resolution for the company and for us.”
The bottom line is that if company’s want the benefits of regulators cooperating with each other to keep fines and penalties to one set, they must cooperate with multiple regulators. Many had pointed to the Dutch company SBM Offshore as the poster child for regulatory whipsaw, first having paid Dutch authorities $240 million in fines and penalties and then 18 months later being assessed a penalty of $238 million by U.S. authorities. The reasons for these two sets of penalties is that SBM Offshore failed to disclose certain evidence to U.S. authorities, and it was only brought forward after the initial settlement with the Dutch authorities. Let’s face facts: To receive the benefits of no piling on, companies must fully disclose their conduct and cooperate with regulators across the globe.