The Foreign Corrupt Practices Act: Why 2022 Statistics Mean Nothing.

You asked for it! So you got it: a double-down on corruption.

No, dear Reader, this is not a synopsis of the Murdaugh trial.  Let’s fly back to the corporate universe and consider how the US Department of Justice has been prosecuting corrupt companies and the individuals who run them.

But first, a summary: the Foreign Corrupt Practices Act (“FCPA”) is the US’s main foreign anti-corruption law. (We also have anti-money laundering legislation, fraud, and various domestic anti-corruption laws.) It is extra-territorial and – based on precedent – only requires minimum US nexus. Many other countries have similar laws, but none is as frequently enforced and with as much fanfare.

Compared with the last five prior years, 2022 saw below-average numbers of total corporate fines (US$1.4 billion) and individual criminal prosecutions (24). 

These 2022 statistics mean nothing.

What really matters are (1) trendlines and (2) DOJ messaging.

Trendlines

We don’t measure a basketball game with a single basket; we shouldn’t measure DOJ enforcement interest based on a single year.  Why?  Because the wheels of justice turn slowly: complex cases may take years to investigate, prosecute, and (almost always) settle. 

2023 is expected to generate more settlements, in part because of continuing investigations related to prior FCPA settlements.  Additionally, the DOJ is now specifically prioritizing individual criminal activity; this should increase enforcement velocity due to…well, read on and I’ll tell you.

And even disregarding the above, the trendline for cases is – like MLK’s arc of justice – bending ever upward.  (So is the trendline for total corporate fines, by the way.)

DOJ Messaging

The DOJ emphasized accountability last year, stating that individual accountability was its “number one priority,” calling for a culture shift towards corporation-wide accountability at all levels.  We have already told you about their views on clawbacks for guilty executives, CCO Certifications, and document retention (with personal messaging platforms).

Why is this important?  Individual prosecutions are often less complex and therefore more quickly resolved. 

It’s also important because nobody wants to go to jail. 

How can we help keep you, dear Reader, out of jail?  We have decades (gasp) of experience in designing policies and systems that mitigate FCPA risk.  New DOJ priorities require a renewed analysis of program gaps…and we can do that for you too. 

We provide practical advice at an Ivy League level…but at Main Street rates.  No charge for mere chatting.  Give us a call, or send us an email today!