It’s the end of the world as we know it
It’s the end of the world as we know it, and I feel fine
The above lyrics came from REM and they reflect how I generally feel about law firm and lawyer pronouncements about the Foreign Corrupt Practices Act (FCPA) enforcement because [SPOILER ALERT] I am a lawyer, I do practice law and I do work for a law firm, the venerable TomFoxLaw. The FCPA Professor regularly chides FCPA Inc. for their scaremongering tactics, usually monikered as ‘Client Alerts’. Mike Volkov is even more derisive when he calls them the FCPA Paparazzi and cites examples from his days in Big Law, where law firm marketing campaigns are centered around doomsday scenarios about soon-to-occur FCPA; UK Bribery Act; or [fill in the anti-corruption law here] prosecutions and enforcement actions. I usually take such law firm scaremonger and blathering’s to be about worth as much as the paper they are printed on. Indeed I chide the FCPA Professor and Monsieur Volkov for their protestations. In other words, I feel fine.
I am a proud card-carry member of FCPA Inc. because not only can I spell FCPA (and UKBA for that matter), I also make FCPA related pronouncements from time-to-time and practice law in the FCPA space. I think we generally do a pretty good job of getting information out there. But last week one missive occurred that not only met the above impugning adjectives but created a veritable tsunami of mis-information as it made its way from China to Europe and to the US that even I thought was beyond the pale. How absurd was it? So absurd that not only did the FCPA Professor and I agree about it, but we decided to post blogs about it today.
On February 5 a law firm client alert stated, “While the number of enforcement actions may decrease or hold steady, we can expect some “blockbuster” settlements in 2014 of matters that have long been under investigation.” Blockbuster…really? Do you think this law firm was implying that the Siemens record FCPA fine of $800MM, plus its equivalent $800MM fine in Germany, that’s a total of $1.6 bn for those of you keeping score at home, is seriously in danger of falling by the wayside in 2014? How about Halliburton’s comparatively paltry $579MM penalty? To be slapped aside like a green-skinned witch yelling, “I’m melting!” BAE coming in at No. 3 with a measly $400MM must be quaking it is British Wellington boots about now.
As inane as this comment was, the thing that attracted my attention was the tidal force wave by which this quote rode its way all the way to the US. By February 10th, this quote had morphed into the following, written in the South China Morning Post, “The United States is expected to impose “blockbuster” fines on companies bribing foreign officials this year, with China a likely target of US investigations, lawyers say. A report by US law firm WilmerHale predicts “blockbuster” settlements under the Foreign Corrupt Practices Act (FCPA). “US enforcement authorities have stated there are a number of very large settlements in the pipeline,” said Jay Holtmeier, a partner at WilmerHale. “Given the attention paid to China in recent years, it is a safe bet some of those large settlements will involve conduct in China.”” Two days later the full storm reached the shores of the US when this article was referenced in the Wall Street Journal’s (WSJ’s) Corruption Currents.
So now not only do we have ‘blockbuster’ FCPA settlements coming; we will have them coming out of China. Various marketing departments will use these statements as ‘authoritative’, yet another reason to purchase their company’s products or services.
There are plenty of great FCPA resources out there, which inform the compliance practitioner, or indeed the non-compliance specialist, about the costs of a FCPA enforcement action. But more importantly there is more than a wealth of free, at no cost, information about how to craft a compliance program with any anti-corruption law, which currently exists. There is the same amount of information about how to ‘do compliance’, once again free and available at no charge. Is it marketing? My answer is either yes or better yet; who cares? Good solid information is good solid information no matter what the motives behind putting it out there are.
But here is the problem with making such statements which newspapers then follow them up by brandishing them as even more dire predictions. Someone might actually believe it. Next Congress will want to investigate these ‘blockbuster’ settlements or, perhaps, why after it was reported that they were coming, the Department of Justice (DOJ) did not have any ‘blockbuster’ settlements in 2014?
I thought about writing this blog post around the tale of the Boy Who Cried Wolf but I realized there is always another law firm or lawyer out there will to say the end of the world is coming “this year”. But perhaps the better analogy is the ESPN segment entitled “C’Mon Man!” during which each color commentator will describe a play or series of plays that made them scratch their heads and say “C’Mon Man!” So while I generally feel fine about the information disseminated by and from FCPA Inc., my suggestion is that everyone just take a deep breath and consider such information for what it is worth.
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© Thomas R. Fox, 2014