James J. McGrath begs to differ.
McGrath, a former prosecutor and now a partner at McGrath & Grace Ltd., revisits what Lanny Breuer, Assistant Attorney General in charge of the Department of Justice’s Criminal Division, said last spring about the supposed advantages that a company can enjoy when its executives fess up early to possible violations of the Foreign Corrupt Practices Act.
Breuer, recalling Attorney General Eric Holder’s description of foreign bribes as a “scourge on civil society,” acknowledged that it must be tough for executives to decide what to do. But he promised that companies would receive “meaningful credit” if they come forward.
But McGrath, whose firm specializes in internal corporate investigations, is anything but reassured.
“From an internal investigations perspective, this ‘call first’ demand constitutes a seismic shift in the government’s perception of its role in the process and should present tremendous business and legal concerns for a company in its cross hairs,” McGrath writes, in an essay posted on Dick Cassin’s FCPA Blog. “What the DOJ is asking for is access to the inner workings of private-sector companies and how they conduct themselves in a way that has heretofore not been seen.”
McGrath much prefers the timeline that is generally followed now: the company perceives possible wrongdoing, does its own internal investigation and then decides whether to turn itself in and cooperate with the government. “Because these internal investigations are usually conducted by outside counsel, if no wrong is found by that independent investigation, its results are protected from disclosure to third parties by operation of the attorney-client privilege,” McGrath notes.
McGrath heartily endorses the U.S. Chamber of Commerce’s recommended revisions to the FCPA and, given Breuer’s remarks, he’d like to see a couple more, like some kind of immunity for companies that cooperate at the outset, or some curbs on the penalties and sanctions it may face, or both.
Meanwhile, for those who can’t get enough of the huge FCPA case involving the Swiss freight forwarder Panalpina World Transport Holding Ltd. (see Just Anti-Corruption’s coverage), Mike Koehler continues his dissection of the various settlements involving Panalpina and its customers. On his latest FCPA Professor posting, he zeroes in on Tidewater Marine International Inc.
