December 5, 2019

DOJ Assistant AG Delivers Remarks on the FCPA

On December 4, 2019, Assistant Attorney General Brian Benczkowski delivered remarks at the American Conference Institute’s 36th International Conference on the Foreign Corrupt Practices Act.  Benczkowski’s remarks began with a focus on the “remarkable prosecution activity and case developments” by the US Department of Justice in FCPA matters over the past year.  In particular, he highlighted the following points:

  • The FCPA Unit has announced 34 charges against individuals, and 30 guilty pleas by individuals, both of which are more than in any prior year.  This is part of the DOJ’s focus on holding individual wrongdoers accountable, and builds on the DOJ’s success in 2018 and 2017.
  • The FCPA Unit will have resolved seven corporate cases with criminal resolutions in 2019, as well as two further cases that were resolved via declinations with disgorgement.  Together, these resolutions recovered $1.6 billion by the DOJ—the largest amount ever recovered in a single year—and $2.8 billion globally through coordinated resolutions.
  • The Criminal Division also pursues foreign corruption through its Money Laundering and Asset Recovery Section, which also has had a successful year, including reaching a “historic settlement” with Jho Low, a Malaysian citizen who allegedly laundered funds that had been misappropriated from 1MDB, Malaysia’s investment development fund.  The DOJ recovered or assisted in recovering over $1 billion in connection with this scheme.

Benczkowski also discussed the DOJ’s recent conviction of Lawrence Hoskins.  Hoskins, who formerly held a position in Paris, France, as a senior executive at a multinational company, was convicted of participating in a bribery scheme to obtain a $118 million contract from an Indonesian state-owned company for the benefit of a US subsidiary of that multinational company.  Hoskins was convicted despite never having taken any relevant action in the United States, under the theory that he acted as an agent of the US subsidiary and so qualified as an “agent” of a domestic concern under the FCPA’s anti-bribery provisions.  Benczkowski asserted that practitioners should not interpret Hoskins to mean that the DOJ would “stretch the bounds of agency principles beyond recognition,” or “tak[e] the position that every subsidiary, joint venture, or affiliate is an ‘agent’ of the parent company simply by virtue of ownership status.”  Instead, Benczkowski stated that each case would need to be evaluated on its facts to determine whether proof of an agency relationship exists.  Benczkowski also pointed out that the Hoskins court also limited the application of agency to situations where the actor was an agent in “connection with the specific events related to the project at issue.”  Finally, Benczkowski stated that in situations where the DOJ found that a company had used “corporate structures to shield a parent from criminal liability” the DOJ would “strongly favor prosecution.”

Benczkowski also discussed the DOJ’s position regarding corporate compliance programs.  He explained that the DOJ was cognizant that companies building up their compliance programs could flag misconduct that had previously gone unnoticed, and that this could provide a “sense of increased risk” that would then prevent the company from moving forward with its compliance enhancements.  Benczkowski explained that the DOJ wanted to avoid this outcome, and the DOJ has sought to publish guidance that “helps companies trust they are making the right investments” by enhancing their compliance programs.  In that regard, Benczkowski mentioned the Criminal Division’s compliance evaluation guidance, its monitorship selection policy, its improved voluntary self-disclosure guidance, and its policy against piling-on as guidance designed to increase trust between the DOJ and companies, and to encourage companies to build out their compliance programs.  Benczkowski closed by acknowledging that the DOJ’s policies could change as DOJ’s leadership and administrations changed, but explained that his focus the last few years has been to design good policies that would tend to survive such changes.

Speech | Evaluation of Compliance Programs | Monitorship