1. 1. The purpose of the booksand recordsisto provide transparencyforbookkeepingof records
and paymentsmade toensure legitimate businesspurposewithno questionastothe true
nature of the payments. While the FCPA isoftenaccusedtobe enforced beyonditsintended
basis,itis there toensure thatpaymentsare not hiddeninotherGL formsand that payments
are inline withthe SOXandGAP accountinglaws. The FCPA enforcesillicitpaymentshidden
withinotherGL codesor those whichare usedfor purposeswhichmaybe illicit.
2. The provisionslimited/quantifiedbystatute orotherlegal authorityandindeedenforcement
agencyguidance: the burdenof proof isvariable andheldtoa higherstandardforthe DOJ.
Frequentfishingexpeditionsare held inaccordance withthe SecuritiesandExchange Actsof
whichthe FCPA ispart of and enforcedbythe DOJand/or SEC. Voluntarydisclosuresare given
special treatmentandleniencyforreportingtheirshortcomingsandworkingwithregulatorsfor
problems reportedbycompaniesratherthanthose foundbyfishingexpeditionsof agencieslike
the SEC. While these carrotsencourage disclosure theydonotlimitthe liabilitywhichmay
come from an investigationnordotheynegate anycriminal prosecutionsthat maycome from
these actions. Inaddition,the criminal andcivil divisionsof the FCPA needtobe workedin
tandemas some legislationprohibitschargeswithoutinformingthe otherareaof law.
The alternativestoprosecutionvehiclesare usedinapproximately90% of FCAPenforcementactions
but fall short of resolution. NPA’s (non prosecutionagreement), made public between the DOJ and
he business. They include a statement of facts and legal conclusions and statement of charges
company takes responsibility for. The DOJ agrees not to prosecute NPA’s as a result of this public
statement. The problemhere isthatthere isnoactual burdenof proof presentforthe conductwhen
the agreement is made.
The DPA (deferredprosecutionagreement)isverysimilartoa pleadingandare privatelynegotiated
agreementsbetweenDOJandbusiness. These are filedwiththe courtsandwithcompany
compliance andadmittance of charges,the DOJagreesto deferthe prosecutionforaperiod(usually
2-3 years). The DOJ maymove to remove the criminal chargeswithcompliance andadherence of
the lawsafterthe periodexpires.
Declinationwithdisgorgementletterisa privatelynegotiatedagreement.,made publicbetween
DOJ and business. Theyconsistof bare – bonedstatementof factsand legal conclusionscompany
takesresponsibilityfor. The DOJdoesnotbring criminal chargesbutthe companyagreesto
disgorge profitsfromthe activitiesasa resultof thisagreement.
The problemswiththese three typesisthatthere isnoindependentreview orlegal review required
for these charges,leadingtoa total lack of burdenof proof or judicial scrutinybutgivesa“wild
west”versionof enforcementtothe agencyratherthan a judge,jury,orlegal bodyto determine
culpabilityandresponsibility.
3. In orderto reconcile existinglegal authorityastothe FCPA’sBooksandrecordsand internal
controlsprovisions: the accountinglawsof SOXandGAAPneedtobe followedtopreventslush
funds,companiesshouldbe doinginternalauditstoensure compliance withthe laws,they
shouldbe trainingandknowinghow the moneyisspentviathose controlsandaudits,andhave
2. substantial control overinternationalentitiesthroughassignedcompliance professionalswho
will assure adherence tothese regulationsasameansof standardbusinesspractice.
In termsof reconcilingof legal authority,until the DOJceasesthe DPA,DisgorgementorNPA actions(as
theyoftenallowinvestmentbanksto enterDPA toavoidjail sentences) andallowsthese entitiestobe
heldtothe standardsof the impliedlawswithinthe FCPA,asreviewedbyjudicial reviewedmanners
(suchas a judge,jury,etc.),the companieswill justassume theywill be able toenterintoone of the
aforementionedagreements,keeptheirnose cleanforafew monthsandthe issue will goaway. This
has beenthe case for nearlyeveryregulatoryissue which enteredDPA statusinrecentyearsandnearly
no one wentto jail fortheiractions. Eveninthe case of WellsFargoand the fake account scandal which
pumpeduptheirfinancials,the presidentof Wellswasbarredfromthe securitiesindustrybutnever
wentto jail. Itshouldbe knownthathe wasactuallyheldtojudicial scrutinybutmanyothers,like HSBC
whohave DPA agreementsinboth2012 and 2019, provingthat beinggoodfora little while won’tsolve
the problem,youneedtohave judicial review andconsequencesforyouractionsor nothingwill change.
