Despite the Financial Crisis, the Foreign Corrupt Practices Act Remains an Enforcement Focus
May 8, 2009
George J. Terwilliger III, Daniel Levin
Recent developments reaffirm that, despite the ongoing financial crisis, the Foreign Corrupt Practices Act ("FCPA") remains a focus of enforcement activity. In the past few weeks, we have seen: (1) a US$2 million settlement from a subsidiary of an international VoIP provider for bribing the President of Yemen's son, among others; (2) six former executives of a California valve company indicted for their involvement in making 236 bribes to foreign officials in 30 countries; and (3) a US rocket scientist sentenced to four years imprisonment for violating the FCPA and other laws. To drive home the point, on April 7, lead US Department of Justice ("DOJ") FCPA prosecutor Mark Mendelsohn appeared on PBS's "Frontline" to emphasize that the DOJ does not consider the financial crisis to be an excuse for any decrease in FCPA compliance efforts. These recent cases also highlight two important enforcement trends: (i) the increased focus of enforcement efforts on prosecuting individuals in addition to companies; and (ii) the increased scrutiny of—and imposition of FCPA liability for—acquisitions, highlighting the importance of FCPA-related due diligence in advance of acquisitions.
Subsidiary Pleads Guilty Following Parent Company's Post-Acquisition Discovery of Improper Payments
DOJ Charges Six Former Executives of Orange County Valve Company for FCPA Violations
Rocket Scientist Sentenced to Four Years in Prison for Bribing Chinese Officials
DOJ's Lead FCPA Prosecutor Tells "Frontline" the Economic Crisis Is No Excuse for Lackluster Compliance
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