On 4 December 2019, Assistant Attorney General Brian A. Benczkowski provided a synopsis of Foreign Corrupt Practices Act (FCPA) enforcement in 2019 generally and emphasized two key points—an increased focus on charging individuals, and the Department of Justice's (DOJ) interpretation of agency theory under the FCPA.
Benczkowski noted that the DOJ had a record year in terms of FCPA enforcement, particularly in the number of individuals charged and criminal resolutions reached. According to Benczkowski, there was an unprecedented number of FCPA convictions in 2019—with juries returning guilty verdicts in four trials. He added that the increased number of indictments and trials in 2019 resulted from the DOJ's "continued dedication to holding individual wrongdoers accountable across the board." From 2010 to 2015, the DOJ charged an average of ten individuals per year, whereas from 2016 to 2019, the average increased to nearly twenty-five individuals. It is worth noting that the DOJ's FCPA Corporate Enforcement Policy (formally incorporating some of the policies in the 2015 Yates Memorandum on Individual Accountability for Corporate Wrongdoing) incentivizes corporations to provide the DOJ with "all relevant facts about all individuals substantially involved in or responsible for the violation of law," which may be a contributing factor to these increased numbers.
Benczkowski also discussed the agency theory of liability that DOJ relied upon in its recent case against Lawrence Hoskins, who was convicted after a trial of FCPA violations in 2019. Benczkowski emphasized that Hoskins, a U.K. citizen, never took any action in furtherance of the bribery scheme in the U.S. Instead, his conviction was based upon "his actions as an agent of Alstom Power, Inc., a U.S. domestic concern." Benczkowski stated that he "wholeheartedly" agrees that the FCPA explicitly provides for agency theories of liability, but acknowledged concerns about the "bounds of agency principles" in the FCPA context. Benczkowski clarified that "the Criminal Division will not suddenly be taking the position that every subsidiary, joint venture or affiliate is an 'agent' of the parent company simply by virtue of ownership status. Conversely, we will also not be taking the position that every parent company should automatically be held liable for the acts of its subsidiaries, joint ventures or affiliates based on an agency theory. Simply put, the law requires more."
The exact contours of what "more" the law requires to establish agency liability remains somewhat unclear in the FCPA context, given the dearth of case law on this topic. However, the DOJ has expressed its view that it can rely upon this theory and appears emboldened by the verdict in the Hoskins case. This will be an area that we will continue to survey going forward.
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