In a cover article for its May 24 issue, Forbes Magazine takes issue with the Justice Department’s increase enforcement of the Foreign Corrupt Practices Act.
According to the article, published online Thursday, the Justice Department has upped the number of FCPA cases from three in 2004 to more than 150 cases this year. But are the cases leading to less bribery? Not really, according to Forbes.
What are these prosecutors accomplishing? Maybe they are fighting for truth and justice. Maybe, that is, it makes sense for the U.S. to hold its corporations to a higher standard of integrity than the French or Chinese outfits they compete against when trying to win business abroad. The prosecutors, though, are doing something else at the same time. They are creating a lucrative industry–FCPA defense work–in which they will someday be prime candidates for the cushy assignments.
Their case in point — Weatherford International. In 2007, the oil services firm uncovered evidence that employees had paid bribes to European officials. They notified the Justice Department of the potential FCPA violation and hired law firm Fulbright & Jaworski LLP to represent them and help with an internal investigation. Not long after, William Jacobson, the Assistant Deputy Chief of the DOJ’s FCPA unit, left the Justice Department for Fulbright & Jaworski. In 2009, Jacobson moved to Weatherford International as general counsel, with a salary to the tune of $4 million.
Forbes also noted that although 38 countries have signed onto an international bribery agreement, only a handful — the U.S., Germany, Norway and Switzerland — aggressively enforce anti-corruption laws, while many others, including China, India and Russia tend to look the other way.
“Until there is equally vigorous prosecution elsewhere, U.S. companies may be disadvantaged,” Nancy Boswell, president of Transparency International USA, conceded to Forbes.
But the DOJ’s enforcement does have some supporters. Mark Mendelsohn, the former Deputy Chief of the FCPA unit who left the DOJ last month, defended the increase in prosecutions, saying corruption undermines economic development.
“There are business benefits from operating in a compliant and ethical fashion,” Mendelsohn told Forbes. “The work we are doing in this area is changing the way business is done.”
Boswell agreed: “For now, U.S. prosecution of U.S. and foreign companies is a necessary step.”
Read the full Forbes article here.
Reached by phone Thursday, Jacobson told Main Justice that he received an independent ethics opinion from an outside law firm approving of his employment with Weatherford. The opinion was reviewed and approved by the Justice Department’s Professional Responsibility Advisory Office.