The Department of Justice’s (DOJ) renewed vigor in pursuing violations of the Foreign Corrupt Practices Act (FCPA) over the past five years, in what it has professed to be a “new era” of FCPA enforcement, has shown no signs of relenting. In 2011, 11 companies collectively paid more than $360 million to silence FCPA allegations, and through June 2012, six companies and related subsidiaries have already agreed to collectively pay over $109 million to do the same. At least 10 of those 17 companies self-reported also phrased as “voluntarily disclosed” all or some of the conduct under investigation. But those companies that self-reported in 2011, and thus far in 2012, still collectively incurred roughly $133 million in penalties.
Although the DOJ continues to promise “meaningful credit” for timely voluntary disclosures of conduct that could potentially violate the FCPA, there are no guarantees, and the department has no formal policy on this front that allows companies to quantify the benefits of self-reporting. Companies face palpable uncertainty on this issue; self-reporting in the FCPA arena presents a paradigmatic lesser-of-two-evils decision. It therefore comes as no surprise that companies continue to question the value of voluntarily disclosing potential FCPA violations that, in the absence of self-reporting and in certain situations, could very well remain under wraps indefinitely.
