Extortion by Peter Schweizer

Author:Peter Schweizer
Language: eng
Format: epub
Publisher: Houghton Mifflin Harcourt

USING THE LEGAL SYSTEM TO EXTORT35Source: www.sec.gov/spotlight/fcpa/fcpa-cases.shtml and http://www.justice.gov/criminal/fraud/fcpa/cases/2013.html.

brags on its website that “Covington lawyers have a unique command of anti-corruption laws, in part due to our role in helping draft the Foreign Corrupt Practices Act of 1977.”36) While at Covington & Burling, Holder and Breuer were both listed as “senior FCPA lawyers” (in a May 9, 2008, email alert sent out by Covington—entitled “FCPA-2007 Enforcement Trends”—that noted that Holder and Breuer “represent corporations before the DOJ, SEC and other government agencies, conducting internal investigations and developing corporate anti-corruption compliance programs”). At that time, anticorruption services were hardly a big business for Covington. FCPA enforcement cases were on the rise, but still relatively rare. Holder, Breuer, and their fellow attorneys at Covington were about to change that, radically expanding the scope of the law while aggressively using it as a tool to increase the demand for their own services and very possibly as a tool of political intimidation.

In 2009, according to the DOJ’s Criminal Division, there were at least 120 companies subject to FCPA investigations.37 A special unit was set up in the FBI to investigate FCPA cases. The SEC also set up a specialized unit, and it became a top priority for the Obama Department of Justice.38 Breuer bragged in November 2010 that the law’s “enforcement is stronger than it’s ever been—and getting stronger.”39

Legal scholars and professionals who tracked the law were befuddled. Why the sudden explosion of antibribery investigations coming out of Washington? One professor wrote about the SEC’s “unexplained aggressive enforcement” that was taking place.40 Another noted that “FCPA enforcement in recent years has expanded across almost every conceivable dimension.”41

One law professor expressed concern about the “recent radicalization of [FCPA] enforcement. . . . In short, the way the Act has been enforced lately has transformed the substantive law and shaken the business world.”42

The sort of cases that were being pursued and prosecuted bore little relationship to the bribery of foreign government officials to procure government contracts. Holder and Breuer were now charging companies and individuals “not alleged to have engaged in or even known about the wrongdoing.”43

The Justice Department cast a remarkably wide net that included expansive definitions of what a “government official” was and what constituted a “bribe.” How wide? Lanny Breuer admitted that essentially no company was immune from charges of misconduct, given the new standard. “There will always be rogue employees who decide to take matters into their own hands,” he said. “They are a fact of life.”44 Ignorance of what a midlevel employee or overseas consultant might be doing was no defense. Large corporations were charged because they “directly or indirectly” gave gifts to overseas individuals. These gifts didn’t need to be cash bribes. Offering “sightseeing trips” could get you into legal trouble.45 A large pharmaceutical company made a contribution to a legitimate charity in Poland, but was charged with wrongdoing because it had not accurately reflected the contribution in its financial statements.46 Royal Dutch Shell was charged with conspiracy to violate

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