The Justice Department’s FCPA Pilot Program turns one year old this month. Celebrate if you feel the urge, but news of its extended lease on life—which a Justice Department official announced in March—should surprise nobody. The Pilot Program fits exactly with the Trump Administration’s emerging message on policing against corporate misconduct.
Yes, technically the Justice Department is extending the Pilot Program until further notice because the department doesn’t have enough senior officials in place to decide its fate. (The Senate will likely confirm a deputy attorney general and a few more key players in May.)
But look at what the FCPA Pilot Program does. Read what the early Trump Administration officials have said about enforcing the FCPA. (Take your pick: remarks from the deputy assistant attorney general overseeing FCPA prosecutions, or remarks from Attorney General Jeff Sessions himself.) Then try to draw a conclusion from those sources where the principles of the Pilot Program aren’t allowed to continue.
You can’t. If anything, the FCPA Pilot Program’s push for greater cooperation will only go more mainstream, across many other lines of Justice Department enforcement. Compliance officers should plan accordingly.
Remember the Basics
First, recall what the FCPA Pilot Program offers. If a company has an anti-bribery violation somewhere in its enterprise, it should: (1) voluntarily report the violation to the Justice Department; (2) hand over all evidence to help prosecutors pursue individual offenders; and (3) implement steps to remediate the internal control weakness that allowed the bribery to happen in the first place.
If your company does those things, it can qualify for steep discounts in monetary penalties the Justice Department might impose. It might even secure a non-prosecution agreement or a declination to prosecute, rather than the deferred-prosecution agreements we’ve seen so often in the last decade of FCPA enforcement.
All that is meant to entice a company with FCPA trouble to cooperate and hold individuals accountable. That’s a good thing. The company pays less in fines (which, really, inflict pain on shareholders more than anyone else) and guilty parties face the consequences of their actions.
Compliance officers need to consider how your compliance programs should operate, and what those programs should do, to take full advantage of the leniency principles behind the FCPA Pilot Program.
For example, if the company wants to self-disclose potential FCPA violations, it needs a compliance program that can identify those violations in the first place. Partly that can be a speak-up culture encouraging people to report suspicious payments. Equally important are strong processes to govern payments, that you can flag questionable payments directly.
Second, the company will need a strong investigations function, to find evidence about individual wrongdoers. (One recent study found that about half of large companies aren’t prepared to meet the e-discovery and legal compliance demands bearing down on them these days.)
The point is that regardless of how the Justice Department handles the FCPA Pilot Program formally, its fundamental message of leniency in exchange for cooperation and improvement will endure—and compliance officers should be prepared to take advantage of that philosophy. Perhaps the Obama Administration threatened with a larger stick, where the Trump Administration rewards with a larger carrot.
It doesn’t matter. The program still has to move forward.
Matt Kelly is editor and CEO at Radical Compliance and a globally recognized expert on anti-corruption compliance. He’s a guest contributor to the GAN Compliance Connection Blog.