A lively panel discussion Wednesday on the Foreign Corrupt Practices Act, which included former Attorney General Michael Mukasey, offered insights into an anticipated FCPA guidance from the Department of Justice.
The panelists at the Dow Jones Global Compliance Symposium agreed that while it’s hard to predict what the DOJ will recommend, there was a general consensus that much of the pressure for the clarification was coming from outside the United States.
Butler University business law professor Mike Koehler said that the Justice Department should take it further and aggregate the guidance into a single document that could clarify FCPA enforcement. The other panelist was Paul, Weiss, Rifkind, Wharton & Garrison partner Mark Mendelsohn.
“I’m hoping that it is going to be far more specific than what it is now,” Mukasey said. He said that while he doesn’t know what reforms are going to be made, one resolution should be the clarification of compliance defenses for companies. A rogue employee should not be used against an entire company with a robust internal compliance program. He said that this would likely result in a tightening of standards.
“If it turns out that a rogue employee gets past [the compliance program], the company ought not to be liable,” Mukasey said. “There are in fact companies that are making decisions that are not to the advantage of the economy or the country.”
Not addressing these issues of compliance force some companies to decline to do business in certain parts of the globe because policing the matters become too hazardous. That opens the door to “folks like the Russians and the Chinese who are a less delicate” when it comes to compliance enforcement, Mukasey said.
But Mendelsohn countered, saying that the statute should explicitly spell out what a company’s liability was rather than having to defend itself later.
“My clients, companies, don’t want to be indicted and then mount an affirmative defense to rebut the presumption of liability,” Mendelsohn said.
The panel also discussed the recent failure of FCPA cases brought by the government, including an Africa sting that was dismissed in February.
“These were astounding failures on behalf of the DOJ,” Koehler said. “They ruin real people’s lives. They empty people’s wallets.”
But Mendelsohn disagreed with the notion that there was a problem with the statutes. He said that FCPA cases are incredibly time consuming and difficult to bring due to the expansive nature of the fraud.
“I don’t think any of the difficulties that the government has had in the several cases that have gone to trial are problems with FCPA,” Mendelsohn said. “None of them go to an element of a statute or the way the statute was enforced.”