The Justice Department is extending an Obama-era program that encourages companies to admit to foreign bribery, with a twist: Coming clean could result not only in a reduced penalty but in some cases none at all.
The new guidelines were rolled out Wednesday by Deputy Attorney General Rod Rosenstein at a Maryland conference on the Foreign Corrupt Practices Act. The FCPA prohibits payments to foreign officials to obtain or retain business.
In his speech, Rosenstein said that corporate America should view law enforcement as an ally. He said more voluntary disclosures by corporations could free up Justice Department investigators to look at other financial crimes and violent crimes.
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Although self-reporting companies could avoid penalty, their names will be made public and they'll have to give up any profits made from corrupt schemes, according to senior officials.
The policy springs from an Obama administration pilot program that offered reduced penalties for self-reporting. It will now be made permanent, Rosenstein said.
To win full protection from prosecution, companies must cooperate with prosecutors, fix the problem and help investigators find those responsible for the misconduct, he said. Companies whose executives are found to be culpable or whose evidence points to rampant corruption won't be eligible for full leniency, the officials said.
Even if the conduct warrants criminal enforcement, those companies could still receive a 50% reduction in the financial penalty, they said. They could also avoid the imposition of a corporate monitor. Companies that choose not to report misconduct may still receive some credit if they later cooperate with investigators, the officials said.
The purpose of the policy, Rosenstein said, is to give the business community greater certainty about what to expect from prosecutors when coming across potential foreign bribery within their companies.
"We expect the new policy to reassure corporations that want to do the right thing," Rosenstein said. "It will increase the volume of voluntary disclosures, and enhance our ability to identify and punish culpable individuals."
Sessions Order
The new policy, which will be added to the manual that guides federal prosecutors nationwide, comes six months after Attorney General Jeff Sessions ordered prosecutors to bring the most serious charges and seek the harshest sentences against violent criminals and drug offenders. Sessions' order also applies to white collar fraud cases, including FCPA violators, according to the officials.
Since the pilot program was implemented, the Justice Department's FCPA unit received 30 voluntary disclosures, they said. During that time, prosecutors declined to bring criminal actions in seven FCPA matters, according to the Justice Department's website.
The U.S. uses the FCPA to police bribe-paying around the world, in what officials have said is an effort to even the playing field globally. The government, which often relies on self-reporting, has won heavy penalties from some companies under the FCPA: Since 2005, it has collected billions in fines from foreign companies and U.S. firms found to be in violation of that law.
The FCPA pilot program was implemented in April 2016 by Leslie Caldwell, who headed the Justice Department's criminal division. While the U.S. has had mixed success with prosecuting individuals for FCPA violations, the department is on target to win more convictions in 2017 than in prior years, according to Sandra Moser, the head of the fraud section.
"More than ever before, we are prosecuting and convicting employees and officials involved in transnational corruption, including in high-risk markets," Moser said during a July 25 speech where she said guilty pleas will "far exceed" totals in past years.
At least 19 people have been convicted this year of charges related to violations of the FCPA, Rosenstein said, including three who were found guilty at trial.
This month, two former executives of oi -services company SBM Offshore, including former CEO Anthony Mace, pleaded guilty to charges related to the Petrobras corruption scandal in Brazil.
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