Voluntary disclosures continue to be the Justice Department’s greatest source of new enforcement actions.
Individuals understandably fight tooth and nail if their liberty is on the line, but most companies simply nod their consent to whatever the Justice Department or SEC offers them.
The risk of fighting these cases, the management distraction they entail, and the fear of seeing the corporate logo next to headlines alleging bribery are too great.
The Justice Department is on the prowl and they’re staffing up.
To support them, the FBI formed a dedicated team of special agents last year to work all FCPA cases out of their Washington field office.
The number of enforcement actions seems to increase every year. Together, the Justice Department and the SEC brought an average of just one or two cases each year for the first 20 years of the law.
More recently, however, there has been a surge of enforcement actions, with 55 reported investigations in the last two years alone.
Fines are up, too. The previous record of almost $ 25 million held by Lockheed Martin since 1994 was swept away first by Titan’s $ 28.5 million fine in 2005 and then by Baker Hughes’ $ 44 million fine last year.
If every company doing business internationally looks closely enough, they will hear a story about someone, somewhere making an inappropriate payment on its behalf.
Every company should work vigilantly to prevent these payments, whether in the guise of gifts, charitable contributions, grease payments, or what is occasionally—and condescendingly—referred to as “corporate tipping.”
Companies should not assume, however, that finding the payment, firing the employee and fixing the problem will diminish the government’s interest in rigorous enforcement. That simple FCPA checklist of the past is long gone, and companies should brace for the new reality.