Last week at a New York City event hosted by the Wall Street Journal Risk & Compliance Journal and Dow Jones Risk & Compliance, Assistant Attorney General, Leslie R. Caldwell discussed the DOJ’s plan and position on investigating Foreign Corrupt Practices Act (“FCPA”) matters. Not concerned with the downtick in FCPA investigations from 2014 to 2015, Ms. Caldwell advised that “A lot of cases are being investigated,” and both the DOJ and FBI are increasing their investigative resources in response to the complexity of the investigations and the number of cases.
The DOJ is expected to add 10 new attorneys which will increase their bench strength to 29 attorneys dedicated to FCPA investigations and prosecutions. The FBI is also increasing the number of agents it has devoted to FCPA investigations and is working closely with the DOJ on these matters. Ms. Caldwell said “corruption is so pervasive that it really needs to be addressed in a more strategic and thoughtful way. It’s not just waiting for a company to self-report but being out there, being proactive in looking for things.”
Ms. Caldwell discussed her pledge to continue to push for more transparency from the DOJ in regards to creating a template to help companies understand what can be expected in terms of penalties in exchange for certain levels of cooperation in an investigation. While she does not want cooperation “reduced to a mathematical formula,” she commented “We’re trying to make more transparent what the outcomes will be.”
Last November the DOJ announced the hiring of its first-ever full-time compliance expert, Hui Chen. Ms. Chen’s expertise allows her to quickly discern the effectiveness of a company’s compliance program and whether or not it is a real program or just window dressing. “By hiring a compliance officer we made clear to compliance that we value your role” and that the “DOJ is serious about compliance. We want you to be empowered,” said Ms. Caldwell at last week’s event.
In September 2015, the Justice Department released the “Yates Memo,” which outlined the department’s new emphasis on individual liability. The memo specifically discussed the need for companies to name individuals involved in FCPA violations if they wanted to receive credit for their cooperation in an investigation. According to reporting by the Wall Street Journal, Ms. Caldwell said companies won’t be penalized for naming individuals who are in foreign countries that the department may find it hard or impossible to prosecute. “That’s not their problem,” she said.
Ms. Caldwell’s remarks at the event last week is yet another reinforcement of the DOJ’s proactive stance on seeking out suspected violations of the Foreign Corrupt Practices Act. Compliance officers and corporate executives should take notice of the aforementioned stance by the DOJ and not assume that the decline in FCPA prosecutions this past year is a gauge as to how serious a company should budget and implement the necessary compliance programs, educate employees and most importantly, conduct audits.