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DOJ: Don’t let FCPA enforcement fears stop M&A deals

Deputy Assistant Attorney General Matthew MinerThe prosecutor who oversees the criminal division's FCPA unit said the DOJ wants corporate acquisitions to happen and doesn't want the "specter of enforcement to be a risk factor that impedes such activity by good actors."

Deputy assistant attorney general Matthew Miner was speaking Wednesday in Washington at ACI's global forum on anti-corruption compliance in high risk markets.

He said good actors shouldn't "cede the [M&A] field to non-compliant companies."

"At bottom, it makes good economic sense and helps stamp out corruption when the [DOJ] adopts policies that foster greater corporate compliance."

To encourage M&A activity, the DOJ will apply the principles in the FCPA Corporate Enforcement Policy to successor companies where there's wrongdoing, Miner said.

That means acquiring companies and targets meeting the requirements of the policy -- "voluntary self disclosure, full cooperation, and timely and appropriate remediation" -- will be entitled to a presumption of declination.

Miner said the DOJ understands that acquiring companies sometimes have "limited access to a target company’s data and records, perhaps even more so when the target company is in a high risk jurisdiction."

"In those instances," he said, "if an acquiring company unearths wrongdoing subsequent to the acquisition, we want to encourage its leadership to take the steps outlined in the FCPA Policy, and when they do, we want to reward them, accordingly for stepping up, being transparent, and reporting and remediating the problems they inherited."

Before he returned to government service in February this year, Miner was a partner in Morgan Lewis' DC office for five years. Before that he served as chief counsel to the Senate Judiciary Committee and as an Assistant U.S. Attorney in Montgomery, Alabama.

Miner said Wednesday that when an acquiring company uncovers corruption issues during due diligence process, it should use the FCPA Opinion Procedure to obtain a ruling from the DOJ before going forward.

That can delay the deal, but sometimes "it makes sense to slow down to assess risks," he said.

(Editor's note: The FCPA Opinion Procedure hasn't been used since November 2014. Critics have said it's too slow and too public to help acquiring companies during an acquisition.)

Miner emphasized that the DOJ wants law-abiding companies "with robust compliance programs" to enter high-risk markets and sometimes take over "otherwise problematic companies."

That helps uncover corrupt practices and spreads compliance to more companies.

And it allows the DOJ to move enforcement resources away from the FCPA and devote them to other criminal activity, such as "opioid enforcement, human trafficking, and crimes impacting vulnerable victims, like children and the elderly."


On other FCPA-related topics, Miner said SocGen's $585 million enforcement action in June was a "perfect example" of the DOJ's new anti-piling on policy.

He also said the DOJ was "pleased" in April to reach this year's first corporate declination (pdf) under the new FCPA enforcement policy.

In that case, the DOJ didn't prosecute Dunn & Bradstreet for FCPA violations in China. The DOJ cited among other things DnB's prompt voluntary self-disclosure, its thorough investigation, and its full cooperation.

In a parallel SEC enforcement action, Dunn & Bradstreet paid $9 million in penalties and disgorgement for the FCPA violations. 


Deputy Assistant Attorney General Matthew Miner's full July 25, 2018 remarks are here.


Richard L. Cassin is the publisher and editor of the FCPA Blog.