At the end of July, the U.S. Securities and Exchange Commission announced a $29.2 million settlement against Halliburton for payments made to a local Angola company in the course of winning lucrative oilfield services contracts. The corporate settlement was the first under the Foreign Corrupt Practices Act (FCPA) since President Trump’s inauguration, although there have been two declinations with disgorgement reached by the DOJ.
There was much speculation around the vigor which the new administration would pursue violations of the FCPA at the start of the year due to Trump’s comments a few years back that it is a horrible law which stifles American business. Attorney General Jeff Sessions sought to dispel such suggestions earlier this year with public remarks that the law would continue to be enforced by the Justice Department.
The SEC settlement was not the only action taken recently. At the end of July, the DOJ secured a jury verdict of guilty against a Chinese billionaire for FCPA violations and money laundering. The defendant is expected to appeal to the Second Circuit.
It is too early to say whether the first six months of the administration will be typical of the rest of the term. The Obama Administration announced quite a few settlements of large government investigations before leaving office. The gap in enforcement actions could also be attributed in part to a transition period for new leadership. A quarterly report prepared by The Foreign Corrupt Practices Act Clearinghouse and published in the Wall Street Journal online indicates that this has not been the longest gap between enforcement actions in the history of the law.
There may be other factors at play as well. The Supreme Court decision in Kokesh to limit disgorgement to five years will obviously reign in some of the larger settlements under the law. FCPA investigations typically take years as the government typically relies on a mix of government resources and internal corporate cooperation. They will no doubt be impacted by the Supreme Court interpretation.
Because the FCPA presents fertile ground for whistleblowers, we will continue to follow developments in this area of the law closely. If you wish to discuss reporting evidence of corruption through a whistleblower tip to the SEC, please call 1-800-590-4116 for a free, confidential initial consultation.