Jul. 10, 2019

Walmart Finally Settles for $282M and a Monitor

After more than seven years and $900 million in investigation costs, Walmart has finally struck a deal with the DOJ and SEC to resolve charges that it violated the FCPA’s accounting provisions in Mexico, China, India and Brazil. The world’s largest retailer will pay $282 million and retain a monitor. Although the high-profile settlement features familiar schemes, such as third parties paying bribes to obtain building licenses, it contains novel compliance and enforcement takeaways, such as a precedent-setting monitor agreement. We analyze this monumental case and share insight from top practitioners, including former senior DOJ officials Mark Mendelsohn and Fry Wernick, on what it signals about the government’s FCPA enforcement priorities and approach. A companion article will look at the notable compliance features of the case, including the self-reporting, cooperation and monitor agreement. See “Wal-Mart CECO Discusses the Retailer’s Decision to Seek ISO 37001 Certification” (Mar. 21, 2018).

$296M TechnipFMC Settlement Shows Petrobras Fallout Is Far From Over

The latest chapter in the Petrobras scandal, TechnipFMC’s $296‑million bilateral settlement with Brazilian authorities and the DOJ, is unlikely to be the last. To the contrary, at least in Brazil, many cases are still in the pipeline. Technip’s leniency agreement represents the ninth settlement that the Brazilian Comptroller’s Office has executed since the Car Wash probe began. The Brazilian agency recently announced that there are still currently 20 other cases under negotiation, Eloy Rizzo, a partner at KLA – Koury Lopes Advogados in São Paulo, told the Anti-Corruption Report. In this article we examine the implications of the settlement. See “Petrobras Finally Inks Deal With SEC and DOJ to Resolve Allegations of Systemic Bribery” (Oct. 17, 2018).

Revisiting the China Initiative: Will the Focus on FCPA Prosecutions of Chinese Companies Produce Results?

On November 1, 2018, then Attorney General Jeff Sessions announced in broad strokes the goals of a new “China Initiative,” a strategic priority to counter Chinese national security threats and economic aggression. Among the ten objectives of the China Initiative was a goal to “[i]dentify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.” This particular goal was met with surprise and interest both by Chinese companies and the international anti-corruption community more broadly. In a guest article, Michael DeBernardis, counsel at Hughes Hubbard, and associate Jonathan Zygielbaum explore whether the inclusion of this goal will ultimately impact FCPA prosecutions. See “The Developing Anti-Corruption Battle Between the United States and China” (Mar. 20, 2019).

A Side-by-Side Look at How Walmart’s Monitor Agreement Compares to Previous Monitor Agreements

In late 2018, the Department of Justice announced that it was updating its policies relating to corporate monitors. The DOJ’s memo mandated that monitorships be more narrowly tailored to the conduct at issue and also emphasized that a company’s remedial measures and testing will be weighed heavily when the government is determining whether a monitor is necessary. Although both MTS and Fresenius have been assigned monitors in FCPA matters since the DOJ’s announcement, Walmart is the first company to receive a substantially different monitor agreement as part of its FCPA settlement. Most notably, Walmart’s agreement limits the scope of the monitorship, requiring that the monitor only review issues relating to “Key Risk Areas” in the countries at issue in the settlement. To show exactly how the Walmart agreement differs from a more typical monitor agreement, we compare the language included in the monitor agreement entered into by Fresenius in April with the language included in Walmart’s agreement. Further analysis of the Walmart settlement can be found here. See our two-part series on the DOJ’s “new” monitor policy: “An Announcement of the Obvious” (Dec. 12, 2018), and “Carefully Selected Monitors, Thoughtfully Scoped Monitorships” (Jan. 9, 2019).

Behavioral Ethics and Economics, Compliance Culture and Meeting DOJ’s Compliance Expectations (Part Two of Two)

Developing and maintaining a strong culture of compliance is not easy. While behavioral studies and compliance surveys identify managerial modeling and procedural fairness as two key drivers, and DOJ emphasizes both issues, they take work and a considered approach. Measuring comfort levels in reporting can provide insights into the compliance culture, but that also poses challenges, as establishing reliable data gathering processes and pursuing a granular analysis requires substantial attention. Nonetheless, the relevance of these activities to compliance programs, and to DOJ, makes the effort worthwhile. In a two-part guest article series, Paul Hastings partners Jon Drimmer, Matt Herrington and Tom Best examine the latest behavioral ethics research and provide practical steps a company can take to ensure that its program is hitting the right marks. See the Anti-Corruption Report’s three-part series on behavioral-science lessons from the Wells Fargo scandal: “Culture Eats Compliance for Lunch” (Nov. 28, 2018); “Devil in the Decentralization” (Dec. 12, 2018); and “Focusing on the ‘Regular Apples” (Feb. 6, 2019).

Miner Discusses International Cooperation and Compliance Expectations

The DOJ has been “working diligently over the past few years to revise and clarify many of the Department’s and Criminal Division’s policies that impact corporate enforcement, and [] will continue to do so for the foreseeable future,” Deputy Assistant Attorney General Matthew Miner said in an address to the recent Third Global White Collar Crime Institute sponsored by the Criminal Justice Section of the American Bar Association. Miner discussed the DOJ’s efforts to foster international cooperation on anti-corruption and other DOJ matters, as well as recent revisions to DOJ policies pertaining to piling on, evaluation of corporate compliance programs, evidence gathering, individual cooperation and transparency. This article summarizes the key takeaways from his speech. See “Quick Look at Recent DOJ Policy Changes” (Feb. 20, 2019). For more from Miner, see “Miner’s First Speech As a Criminal Division Leader Focuses on M&A” (Aug. 8, 2018).

Brown Rudnick Expands D.C. Investigations Group

G. Derek Andreson joins as a partner with a practice focused on white collar matters, including fraud and corruption, DOJ and SEC investigations, FCPA compliance and enforcement matters, and internal investigations. For more from Andreson, see “DOJ’s New FCPA Compliance Counsel: A Fairer Assessment for Companies” (Aug. 5, 2015).

Winston & Strawn Welcomes Anti-Corruption Expert As Partner in D.C.

Christopher Monahan’s practice focuses on internal investigations on matters relating to risk assessments, compliance reviews and government inquiries. For more from Winston & Strawn see our three-part series on managing corruption risk in portfolio companies: “Understanding Liability” (Apr. 3, 2019); “Assessment, Diligence and Walking Away” (Apr. 17, 2019); “Monitoring and Oversight” (May 1, 2019).

Anti-Corruption Experts Launch D.C. Firm

Warren Allen and Ray D. McKenzie have launched WTAII, a new firm based in Washington, D.C. The firm’s practice areas include government enforcement and internal investigations, anti-corruption diligence, compliance programs, litigation and general strategic legal advice. For more insight from Allen, see “The DOJ’s FCPA Corporate Enforcement Policy One Year Later” (Dec. 12, 2018).