U.S. companies are spending too many resources worrying they might unintentionally run afoul of the law that prohibits bribes to foreign officials, two defense lawyers said today.
Mayer Brown partner Michael Volkov and Jenner & Block partner Andrew Weissmann told lawmakers that they should consider amending the Foreign Corrupt Practices Act. Testifying before the Senate Judiciary Committee, they said companies get too little credit for making good-faith efforts to comply with the law.
The Justice Department has greatly increased prosecutions under the FCPA in recent years, winning fines and, in some cases, criminal convictions of individuals found to have bribed government employees abroad or committed other corrupt acts.
Some senators signaled they are open to changes, either in the language of the law or in how prosecutors use it. Sen. Amy Klobuchar (D-Minn.) noted that the 1977 law was passed when U.S. companies did relatively little business in China and other countries. “My major concern is if we have a level playing field that hurts American businesses,” Klobuchar said.
Weissmann, who is co-chairman of Jenner & Block’s white collar defense practice, said Congress should create a defense under the FCPA for companies whose employees violate established anticorruption policies. “An organization that has an ideal compliance program has done nothing wrong, as a company, when an employee nevertheless flouts that program and pays a bribe,” he said.
Volkov disagreed with that proposal, saying the defense wouldn’t prevent a company from being indicted. But he suggested other changes, such as more guidance about what a company would gain from voluntarily disclosing a potential FCPA violation.
“In the absence of clarity and transparency, companies may not adequately balance the risks and benefits of voluntary disclosure. Hence, the sleepless nights of company officials,” said Volkov, a former assistant U.S. attorney in the District of Columbia.
Greg Andres, an acting deputy assistant attorney general in the Justice Department’s Criminal Division, disputed some of the criticism. Testifying separately, he said that self-disclosure and cooperation are two of nine factors that the department considers when deciding how to proceed with a case. He spoke against granting immunity for self-disclosure.
“We don’t believe that immunity is appropriate, just as we believe immunity is not appropriate for a bank robber who discloses that he robbed a bank,” Andres said.
Sen. Arlen Specter (D-Pa.), in what might have been his final time presiding over a Senate hearing because of his loss in this year’s primary election, initially criticized the Justice Department for not getting more prison time for FCPA defendants. But he added later that he also sees merit in the defense lawyers’ suggestions.
“You make some good points, when you talk about a compliance defense for rogue employees. There you have the totality of the conduct and the company exonerated,” Specter said.
Newly sworn-in Sen. Chris Coons (D-Del.) said that he did compliance work as a lawyer in private practice, and he, too, said the FCPA may need to be changed, at a minimum to comply with similar laws that could be enacted in other countries. “I am interested in what may someday happen as our allies begin to join us and how we would begin to harmonize enforcement,” Coons said. (Prior to winning local office, he was an in-house lawyer for W.L. Gore & Associates Inc.)