The DOJ Continues Its Unrelenting Pursuit of FCPA ViolatorsMay 16, 2014 – Articles White Collar Defense & Compliance Blog
It has been nearly four decades since the Foreign Corrupt Practices Act (FCPA) was enacted and just over fifteen years since it was amended to apply to foreign companies, and its sharp teeth still have plenty of bite. Marubeni Corp., a Japanese trading firm, recently reached an agreement with the DOJ to plead guilty to one count of conspiracy to defraud the U.S. and seven counts of violating the FCPA. United States v. Marubeni Corp., D. Conn., No. 3:14-cr-00052 (March 19, 2014).
As part of its guilty plea, Marubeni agreed to pay a hefty $88 million fine for participating in a scheme to bribe high-ranking Indonesian government officials to secure a lucrative power project. However, this was not Marubeni’s first brush with the DOJ related to FCPA violations. In 2012, as part of a deferred prosecution agreement, Marubeni paid a $54.6 million fine for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement, and construction contracts in violation of the FCPA.
Typically, as part of an FCPA settlement of plea agreement, the DOJ requires FCPA violators to take remedial measures to prevent future FCPA violations. As part of its 2012 deferred prosecution agreement with the DOJ, Marubeni agreed to hire a consultant to help design, implement, and enhance its FCPA compliance program to ensure that it satisfied the DOJ’s standards. Clearly, however, Marubeni’s compliance program did not do enough to prevent FCPA violations and failed to keep Marubeni compliant within just two years.
In its recent guilty plea, Marubeni agreed to increase its FCPA compliance efforts. Marubeni promised to implement and maintain an enhanced global anti-corruption compliance program and to cooperate with the DOJ’s ongoing investigation into Marubeni’s bribery schemes, which it previously failed to do.
The takeaway from Marubeni’s second run-in with the DOJ over FCPA violations is that compliance and cooperation are key to preventing the dramatic effects of FCPA prosecutions. Within just the past six years, the DOJ has forced numerous companies to pay hundreds of millions of dollars to settle FCPA violations. Thus, companies that face potential FCPA exposure—of which there are many, considering the broad reach of the FCPA—should not undertake compliance efforts lightly. Just two years ago, Marubeni promised to increase their compliance efforts, yet now they are paying an even larger penalty for their failure to comply with the FCPA. It is increasingly important for companies that deal with foreign governments to have an FCPA compliance program. Hopefully Marubeni’s example will cause many of these companies to take an even closer look at their compliance programs to prevent a similar situation for themselves.