September 2, 2018
In pertinent part, McFadden stated:
Let me take this opportunity to address a few additional matters regarding our FCPA enforcement practices. The Criminal Divisions aims are not to prosecute every company we can, nor to break our own records for the largest fines or longest prison sentences. Our goal is for companies and individuals to voluntarily comply with the law. And it is by working with companies transparently and in partnership that we can achieve this goal. Indeed, working with cooperating businesses is a very important element in fighting corruption, whether by preventing violations before they occur or dealing with past violations. We recognize that businesses are our partners in the fight against corruption, because they are in the best position to detect risk, to take preventative measures, and to educate those who act on their behalf on appropriate best practices.
With that in mind, the Fraud Sections FCPA prosecutions are intended to level the playing field for honest businesses that are undercut by businesses that engage in corrupt behavior. Our responsibility as prosecutors is to follow the facts wherever they lead us. Sometimes the facts lead us to stop and close an investigation. Other times, the facts convince us that a criminal resolution is required. 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. As prosecutors, we have significant enforcement tools, but we also have heightened evidentiary and scienter standards, and we take those requirements seriously.
As you may know, in the last year as part of the FCPA Pilot Program, the Fraud Section has begun publishing information on cases we have declined to prosecute, where we would have brought criminal cases but for the companies voluntary self-disclosure, full cooperation, and comprehensive remediation. There have already been five such cases. Of course, this number does not include the many cases we routinely decline for various reasons including insufficient evidence of corporate criminal misconduct. This is part of our long-standing effort to lay out transparent and clear guidelines and benefits for those companies and individuals subject to the FCPA.
Transparency about our enforcement policies and practices is important. The Fraud Sections Pilot Program is one example of an effort to provide more transparency and consistency for our corporate resolutions. The program began a year ago, and we are now conducting a full assessment of it. In our review, we are examining whether there is more that we can do to promote voluntary compliance with the law and what more we can be doing to provide appropriate transparency regarding our expectations and prosecutorial priorities. In the meantime, the Program will continue in full force. (emphasis added).
Even though McFadden provided a sensible framework for analyzing DOJ declinations, it should be noted (as highlighted in prior posts here and here) that in three of the five DOJ self-declared declinations (all before McFadden assumed his position at the DOJ) the salient question needed to be asked: just what viable criminal charges did the DOJ actually decline. Based on the only information in the public domain about the enforcement actions, the answer appears to be none.
McFadden next spoke about the timing of FCPA investigations.
In terms of background, FCPA Professor (see here) and many others, including perhaps most prominently Paul Pelletier (former Principal Deputy Chief of the DOJs fraud section) (see here and here) have frequently written about the long time periods often associated with FCPA inquiries. (See here for the FCPA Flash podcast episode with Pelletier in which he discusses this issue).
On this issue, McFadden stated:
We are also making a concerted effort to move corporate investigations expeditiously, and we expect cooperating companies to do so as well. This will maximize our ability to bring cases against responsible individuals, before applicable statutes of limitations have run or evidence is lost. Of course, this should also be good for cooperating companies. No executive wants to deal with a lingering government investigation or the associated costs and distraction from the companys mission. Over the last few years, we have hired additional trial attorneys in the Criminal Divisions Fraud Sections FCPA Unit to help investigate cases more quickly, and the Fraud Section leadership and I are focused on wrapping up old investigations. 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. My intent is for our FCPA investigations to be measured in months, not years.