November 12, 2012
We just completed our annual Ohio State Journal on Dispute Resolution Annual Symposium, which this year also served as the AALS Sixth Annual Works-in-Progress Conference. I thought the conference was a great success! As Art mentioned, we had many wonderful presentations (some of which – our “new voices,” highlighting young scholars working in the dispute resolution field — will be published in the symposium issue of the Journal on Dispute Resolution). In the next week or so, we will try to bring you descriptions/abstracts of the speakers’ presentations. I am helped in this effort by the students in my Dispute Resolution Practices class, who attended the symposium. Our first presenter, from Texas Wesleyan, was Peter Reilly, whose topic was “Negotiating Chargers of Bribery Toward Increased Transparency, consistency, and Fairness in Pre-Trial Deal Making Under the Foreign Corrupt Practices Act.”
Peter began the discussion with a brief history of how the Foreign Corrupt Practices Act (FCPA) was enacted and the Congressional intent underlying its enactment. After explaining how it was born out of the post-Watergate flurry of increased regulation, Peter discussed how the FCPA was largely symbolic for its first 25 years of its existence, with very little enforcement by the Department of Justice or the Securities and Exchanges Commission. After the terrorist attacks of September 11, 2001, however, the Act became a priority to ensure that American companies were not involved in corrupt practices of any sort, preventing any possibility of American corporate involvement with terrorist cells.
Peter then focused on how the Department of Justice began the process of bringing charges against major U.S. companies for FCPA violations, which typically end either in a determination not to prosecute agreement or a settlement agreement for these violations. These agreements have become the norm, with trials over whether a company violated the FCPA becoming the rare exception. These agreements are typically very short and do not provide much guidance on why or why not the Department of Justice is prosecuting a certain company. Because of this lack of information, companies are left to guess what exactly the FCPA’s boundaries are and what conduct will result in a Department of Justice prosecution.
Peter discussed how these determinations of whether to prosecute are often made after negotiations between the company and the Department of Justice. He explained that companies are starting to implement different training and compliance programs for their employees, allowing the companies to claim innocence while shifting the blame to individual employees when FCPA violations occur. These employees earn top salaries, and after the company pays a fine to the Department of Justice for the FCPA violation, these employees are fired, but not without multi-million dollar severance packages. Peter questioned whether companies considered this process of bribery, followed by FCPA issues, and large employee severance payments and Department of Justice fines as simply a cost of doing business when companies enter new foreign markets.
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