McFadden: DOJ seeks to prevent and resolve bribery cases, not break records for FCPA fines

18 April 2017. By Robert Thomason.

Leveling the playing field for companies trying to comply with the Foreign Corrupt Practices Act, rather than seeking record fines, will be the focus of the US Justice Department, said Trevor N. McFadden, acting principal deputy assistant attorney general, told an audience compliance officers on Tuesday.

But DOJ remains committed to enforcing the FCPA, he said at a conference* in Washington, DC, and to do so it intends to work with international counterparts and with private companies that are trying to comply or voluntarily disclose suspected corruption, he said.

McFadden was appointed as acting head of DOJ's fraud unit under Attorney General Jeff Sessions and is expected to continue in that role as top agency officials are confirmed by the US Senate Judiciary Committee.

A pilot program for FCPA enforcement that gives credit to companies that self-report and initiate remediation of corrupt practices is under review, but it will remain in full effect pending that review, McFadden said.

"We are certainly far from seeing an end to the global problem of corruption, but I think it is safe to say that we are headed in the right direction," McFadden said.

Compliance officers and anticorruption advocates are watching for signs of how the FCPA might fare under the new administration of US President Donald Trump. In televised comments in 2012, Trump called the FCPA a "horrible law" and said "it needs to be changed."

While McFadden indicated the DOJ plans to maintain a steady course of upholding the FCPA, he emphasized elements of enforcement that rely on voluntary compliance, individual accountability and international cooperation, echoing themes that were also important under the Obama administration.

"The department does not make the law, but it is responsible for enforcing the law, and we will continue to do so," he said. "As I have said before, and more importantly as Attorney General Jeff Sessions has stated in his confirmation process, the department remains committed to enforcing the FCPA and to prosecuting fraud and corruption more generally. This is all part of our effort to ensure that companies and individuals subject to the jurisdiction of the FCPA are not disadvantaged as compared to other companies."

More expeditious resolutions

"My intent is for our FCPA investigations to be measured in months, not years," McFadden said. Additional hires in DOJ's fraud section were intended to resolve cases more expeditiously, he said.

"We expect cooperating companies to work with us to prioritize internal investigations and to respond to fraud section requests promptly to ensure there are no unnecessary delays," he said.

McFadden said DOJ's goal is for companies and individuals to comply with the law voluntarily.

"The criminal division's aims are not to prosecute every company we can, nor to break our own records for the largest fines or longest prison sentences," he said.

If the facts warrant it, a criminal resolution will be pursued, McFadden said.

"When we do not have evidence of the requisite criminal intent, there is no justification for a criminal division resolution, and we will defer to our regulatory colleagues to handle the matter," he said. "As prosecutors, we have significant enforcement tools, but we also have heightened evidentiary and scienter standards, and we take those requirements seriously."

International cooperation

"There has been growing international recognition of the need to disrupt corrupt payments in order to create a level playing field in the global marketplace," McFadden said.

He said that many countries have strengthened their domestic anticorruption laws and enforcement authorities, and particulary noted international cooperation with the UK, Brazil and the Netherlands on corruption cases.

The cooperation extends to apportioning penalties for bribery among relevant jurisdictions, he said.

"As part of our cooperation with our international partners, where appropriate, we seek to reach global resolutions that apportion penalties between the relevant jurisdictions so that companies that want to accept responsibility for misconduct are not unfairly penalized by multiple agencies," McFadden said.

"I should note that our willingness to apportion or credit penalties based on resolutions with other regulators assumes that the company cooperated with our investigation and did not engage in forum shopping to avoid department involvement in the matter," he added.

McFadden said DOJ continues to request and provide assistance internationally, and that over the years Congress "has expanded the jurisdictional reach of the FCPA in order to maximize our ability to level the playing field for companies and individuals that refuse to engage in corrupt conduct."

*10th Annual Anti-Corruption, Export Controls & Sanctions Compliance Summit; Washington, DC; April 18, 2017.

	Eliot Gao