Richard L. Cassin Publisher and Editor

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FCPA Blog Daily News

« 2011 Enforcement Index | Main | With Magyar In New Top Ten, It's 90% Non-U.S. »

Top Stories Of 2011

Some picks for the year's hottest FCPA headlines are these:

#1: Drop in corporate enforcement actions. In 2010, 23 companies settled FCPA cases for $1.8 billion; in 2011, just 15 companies settled for $508.6 million. Reason? The DOJ was distracted by an unprecedented number of FCPA-related trials. But there's no shortage of corporate investigations in the pipeline so look for enforcement to pick up next year. (We'll post our 2011 enforcement index right after the New Year holiday.)

#2: Mistrial in the first Africa sting case. A hung jury in July showed that the DOJ's FCPA unit isn't invincible after all. And in December, the judge dismissed the conspiracy counts against six other defendants in the case, resulting in one defendant's outright acquittal.

#3: Lindsey and Lee dismissals. Why would the government cheat in an FCPA prosecution when it usually wins without breaking a sweat? The judge found the DOJ's tactics so outrageous he dismissed the indictments after the jury heard the case and decided to convict the defendants on all counts. The DOJ is appealing the dismissals. If it loses, will it clean its own house?

#4: Putting the 'foreign' in Foreign Corrupt Practices Act. With the Magyar / Duetsche Telekom settlement this week, nine of the top ten FCPA cases involve non-U.S. companies. We think there's a message there from Washington to the rest of the world.

 #5: The DOJ - SFO partnership is in full bloom. The U.K.'s Serious Fraud Office is prosecuting three former Innospec execs. It charged Alcoa's super agent, Victor Dahdaleh, with corruption and proceeds-of-crimes offenses. And the SFO is leading the global investigation into Paris-based Alstom, a Siemens-sized scandal in the making.

#6: Enforcement actions are getting bigger. The top ten cases now account for criminal and civil penalties and disgorgement of $3.28 billion. Eight were settled in the past two years.

#7: An attitude adjustment at the DOJ? Associate AG Lanny Breuer promised to release detailed FCPA guidance next year, after a thirty-year wait. This month, the DOJ indicted eight former Siemens execs and agents, answering criticism that big companies plead and pay while their people walk.

#8: Fifteen-year prison term. Joel Esquenazi, one of the Haiti telco defendants, took his chances at trial and lost big. His sentence is the longest in FCPA history. Despite the DOJ's missteps in the Africa sting and Lindsey trials, Esquenazi's sentence shows how dangerous and devastating FCPA prosecutions can be.

#9: 'Foreign officials' galore. Motions by FCPA defendants to dismiss based on who's a foreign official failed in the Carson, Lindsey, and Esquenazi cases. The DOJ's view that foreign state-owned enterprises are 'instrumentalities' under the FCPA and their people are therefore 'foreign officials' is the law. Really.

#10: TSKJ keeps on giving. With a mega-settlement this year by JGC and a humongous forfeiture by Jeffrey Tesler, the feds' take on the case climbed to $1.65 billion. No wonder a dozen or so other countries want their own version of the FCPA. There's a fortune to be made in anti-corruption enforcement.

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