• In 2004, the DOJ collected about $11 million in criminal fines. In 2009 and 2010 combined, the DOJ collected nearly $2 billion in criminal fines.

  • The FBI has trained a special investigative unit for FCPA violations.

  • FCPA enforcement officials currently have more than 150 criminal and 80 civil investigations underway.

  • New FCPA whistleblower provisions increase risks.

  • In 2010, 52 individual businesspeople were indicted, sentenced, or convicted and are awaiting sentencing for FCPA violations.

  • Enforcement officials resolved 6 FCPA enforcement actions in 2002. In 2010, they resolved 71.

  • In 2010 alone, five FCPA settlements exceeded $100 million.

  • The amount of FCPA penalties tripled between 2009 and 2010.

  • Individuals are facing significant FCPA fines and jail time for authorizing improper payments.

  • FCPA actions are increasingly brought against small and medium-sized companies as well as high-profile multinational corporations.

FCPA

How do the whistleblower provisions apply?

The FCPA whistleblower provisions increase pressure to implement strict compliance programs. Under the new rules, individual employees may recover millions of dollars by coming forward with information about bribes. Whistleblowers are protected from retaliation by their employers.

Significant Incentives:

As part of the 2010 Dodd-Frank Act, citizen and corporate whistleblowers who provide “original information” to enforcement authorities in an investigation resulting in monetary sanctions over $1 million may recover between 10 and 30 percent of funds collected. Enforcement officials hope that significant financial incentives will inspire whistleblowers to come forward. Given the multi-million dollar nature of many recent FCPA settlements, the whistleblower provisions give employees at all levels an enormous incentive to disclose improper payments. For example, Johnson and Johnson settled with the SEC and DOJ for a total of $70 million for making payments to officials in Europe and Iraq. This settlement would have provided a whistleblower between $7 million and $21 million.

Examples of Reports:

Whistleblowers are often positioned to expose significant wrongdoing at a company. For example, they may disclose accounting procedures designed to hide off-the-book commissions to local agents, lax recordkeeping that allows payments to customs officials for entry of goods, or falsely labeled accounts used to make illicit payments. They may also disclose the hiding of gifts and entertainment expenses for foreign officials or the overbilling of customers to free up funds for bribery. Whistleblowers are further empowered because they are not required to report an event to a company’s internal compliance program. Whistleblowers are also not required to disclose their identity to enforcement officials; instead, they can remain anonymous and their attorneys can represent their claims before the government until the matter is resolved. As a result, the whistleblower provisions are expected to generate tremendous pressure on companies to implement strict compliance programs that mitigate risk.


Cairo, Egypt