Assistant Attorney General Leslie R. Caldwell recently delivered a speech to The George Washington University Law School that touted her achievements as head of the Department of Justice Criminal Division and provided her perspectives on recent FCPA enforcment actions.
Caldwell also revisited her top priorities from the beginning of her term, which included sharpening the focus of the fight against corruption, the need for increased transparency with respect to corporate prosecutions, and her desire to “encourage and foster meaningful corporate compliance and cooperation.”
We’ve extracted the following highlights from her wide-ranging November speech:
Challenges to Corporate Compliance
The lack of an effective corporate compliance program is a consistent theme in the fraud, corruption, money laundering, and sanctions cases the DOJ has pursued. Caldwell acknowledges a “marked improvement in compliance programs over the years,” yet her division continues to encounter companies with compliance programs that appear “strong on paper but are much weaker in practice.”
- To target corruption, compliance programs and training must be communicated repeatedly and enforced properly throughout the entire organization.
- The Criminal Division Fraud Section plans to hire a compliance consultant to assist the government in evaluating corporate compliance and remediation programs. The consultative insights harnessed in this role would help prosecutors improve the way they approach investigations, including assistance in conducting “more exacting interviews of compliance personnel and other witnesses.”
FCPA Enforcement Activity in the Criminal Division’s Fraud Section
In the last seven years, the Criminal Division’s Fraud Section has convicted more than 65 individuals in FCPA and other related cases. It has also resolved criminal cases against more than 65 companies, with penalties and forfeiture of approximately $4.5 billion.
- Roughly $772 million in criminal penalties were paid by Alstom in connection with a scheme to bribe officials in more than ten foreign countries.
- The 2016 investigation of VimpelCom led to the company’s agreement to pay a $230 million criminal penalty to the department—part of a nearly $800 million resolution that also included charges by the Securities and Exchange Commission (SEC) and Dutch authorities.
- In 2016, the Criminal Division had its first-ever prosecution of a hedge fund, Och-Ziff Capital Management, after the company admitted its involvement in a series of schemes to bribe officials in Africa to secure investment opportunities.
- During Caldwell’s tenure, the Division pursued over a dozen individuals, including corporate executives, third parties, and corrupt officials, for violating anti-corruption laws.
Kleptocracy Asset Recovery Initiative
Caldwell also discussed the importance of the Kleptocracy Asset Recovery Initiative, a program that primarily focuses on the seizure of assets belonging to corrupt officials. The initiative helps ensure that officials and money launderers do not use the American financial system to funnel the proceeds of corruption.
- Per Caldwell, the FCPA and the Kleptocracy Initiative (established in 2010 as part of the Asset Forfeiture and Money Laundering Section) “are two sides of the same anti-corruption coin.”
- To date, the Kleptocracy Initiative has “sought to seize or restrain” approximately $3 billion in assets, including real estate, planes, cars, and art.
Although Caldwell used much of her speech to establish her legacy, in doing so, she clearly demonstrated that that the US government has continued to evolve and strengthen its FCPA Enforcement efforts to combat international corruption throughout her tenure. Whether the next political appointee will enforce the FCPA with the same vigor remains an open question. However, if her successor chooses to do so, he or she will have plenty of tools available thanks to advancements made under Caldwell’s direction.