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Harry Cassin Publisher and Editor

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Richard L. Cassin Editor at Large

Elizabeth K. Spahn Editor Emeritus 

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Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

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FCPA Blog Daily News

« 'I Want To Thank . . . .' | Main | Mapping The FCPA »
Friday
Nov182011

Do DOJ Opinions Harm American Companies?

Earlier this month, the DOJ's Lanny Breuer said his agency expects to release detailed new guidance on FCPA enforcement sometime in 2012. Breuer said he hopes it will be 'a useful and transparent aid.'

So do many other people.

Former U.S. Attorney General Michael Mukasey, for example, told Congress in June that federal guidance and advisory opinions for the FCPA are inadequate and little used.

Right on both counts.

Since 1993, the DOJ has issued only 34 FCPA opinions (called Releases), an average of about 1.8 per year.

Why so few? The advisory opinion process, as we've said, is just too public. The DOJ can't or won't render private advice or opinions about FCPA enforcement. So merely asking for help can damage the requesting company.

The worst example was Release 08-02 from June 2008. Halliburton (by then no stranger to FCPA problems) wanted to buy British firm Expro through a hostile takeover. A competing group from the U.K. called Umbrellastream was also in the hunt.

Halliburton couldn't do any real due diligence during the hostile bid. To protect itself, it asked the DOJ for an advisory opinion. It wanted assurance that Halliburton itself wouldn't be prosecuted for buying a potentially bribe-tainted foreign company. In return, Halliburton promised to investigate Expro after the acquisition and blow the whistle on any corruption it found there. Halliburton also promised to help the DOJ prosecute anyone at Expro who might have been involved in potential FCPA offenses before the acquisition.

Those gory details were made public in Release 08-02. Predictably, when Expro saw  the Release, it ran from its American suitor into the arms of the local Umbrellastream.

The rest of the business world learned then that American companies with their FCPA baggage can be dangerous  suitors.

*     *     *

The Opinion Procedure Regulations appear in 28 CFR Part 80. They say, among other things, that a request must come from an issuer or domestic concern, must be in writing, and must contain all details of the transaction. A DOJ opinion, the law stipulates, creates "a rebuttable presumption" that the conduct in question complies with the FCPA and with the DOJ's current enforcement practices. 15 U.S.C. § 78dd-1(e) [Section 30A of the Securities & Exchange Act of 1934] and § 78dd-2(f).

All Opinion Procedure Releases from 1993 to 2008 in PDF are linked below. (Years that don't appear had no Releases.) Earlier Releases from 1980 to 1992, then known as Review Procedure Releases, can all be found here.

2011 11-01      
2010 10-01 10-02 10-03  
2009 09-01      
2008 08-01 08-02 08-03  
2007 07-01 07-02 07-03  
2006 06-01 06-02    
2004 04-01 04-02 04-03 04-04
2003 03-01      
2001 01-01 01-02 01-03  
2000 00-01      
1998 98-01 98-02    
1997 97-01 97-02    
1996 96-01 96-02    
1995 95-01 95-02 95-03  
1994 94-01      
1993 93-01 93-02    

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