Category Archives: Bribery and Corruption

Leading Companies Collaborate to Fight Global Corruption

How MIT’s data-sharing consortium known as Integrity Distributed can help companies meet the DOJ’s recently updated corporate enforcement guidelines, while also identifying potentially improper payments.

by Vincent M. Walden and Eduardo Lemos

From left to right: Vincent M. Walden and Eduardo Lemos. (photos courtesy of the authors)

A new data-sharing consortium led by a nonprofit at MIT is allowing the collaboration between companies to improve their improper payments detection capabilities by up to 25% than when each company’s model is performed in isolation. By increasing their fraud detection capabilities, companies will be in a better position to align with the DOJ updated expectations for corporations to achieve the identification of misconduct and to voluntarily self-disclose.

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Justice Department Revises Cyber Crime Charging Policy to Shield Good-Faith Security Research

by Alex Iftimie, William Frentzen, Brian Kidd, and Reiley Porter

On May 19, 2022, the Department of Justice (DOJ) updated its policy guiding charges under the Computer Fraud and Abuse Act (CFAA), the main law used by prosecutors to charge cyber‑based crimes. The policy changes answer longstanding questions about the language of the CFAA and its potential for broad application. The new policy further refines DOJ’s goals for enforcing the CFAA and establishes as policy DOJ’s longstanding informal position that it will not charge “good-faith security research” as a violation of the CFAA. The new policy also directs that DOJ will not bring CFAA charges in a number of other situations that implicate the Supreme Court’s 2021 decision in Van Buren v. United States[1] and have long concerned courts and legal commentators, such as violations of access restrictions contained in a contractual agreement or terms of service or violations of an employer’s policy against checking sports scores or paying bills at work.

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Priorities, Trends and Developments in Enforcement and Compliance

by Joon H. Kim, Matthew C. Solomon, Victor L. Hou, Lisa Vicens, and Samuel Levander

2021 was a year of transition for white-collar criminal and regulatory enforcement. As courthouses reopened and trials resumed, newly-installed heads of law enforcement authorities looked to reset priorities and ramp up enforcement in the first year of the Biden administration. Policy priorities shifted toward enforcement against sophisticated financial institutions, corporates and their executives, in contrast to the previous administration’s focus on retail investors and schemes with identifiable victims. While the shift at the SEC was more immediately visible with major new enforcement priorities, investigations and resolutions, the DOJ adopted policies and announced new initiatives that will likely only find expression in 2022.

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The Behavioral Code: Four Behavioral Science Insights for Compliance and Enforcement

by Benjamin van Rooij and Adam Fine

With each new corporate scandal and case of major illegal corporate behavior or wrongdoing, regulators and prosecutors will face tougher questions about why they have not been able to prevent damages. Increasingly, this will mean that compliance and regulatory enforcement become an ex-ante affair, where corporate managers and government officials seek to influence behavior before damage happens, rather than the ex-post model of assigning liability after the fact or defending the corporation against such liability.

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AMLA 2020: New Penalties for Concealing Transactions Involving Senior Foreign Political Figures

by Barak Cohen, David B. Massey, Jamie A. Schafer, David Sewell, and Paul M. Korol

On New Year’s Day 2021, Congress passed the Anti-Money Laundering Act of 2020 (AMLA 2020). The AMLA 2020 included sweeping reforms aimed at strengthening protections against money laundering, terrorism financing, and other illegal activities.

In this article, we examine two new criminal penalties established by the AMLA 2020. In a nutshell, these penalties prohibit concealing or falsifying information related to ownership or control of funds in transactions involving senior foreign political figures and entities designated to be of primary money laundering concern. This is a potentially significant new tool providing for criminal prosecution targeting a broad swath of intermediaries who may be involved in facilitating transactions involving senior foreign political officials, including brokers, nominees, lawyers and any other person or entity that may communicate with a financial institution in the course of a transaction falling under these provisions.

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Recommendations for Combating Bribery of Foreign Officials

by Kara Brockmeyer, Andrew M. Levine, Bruce E. Yannett, Ada Fernandez Johnson, and Katelyn McNelis

On November 26, 2021, the Organization for Economic Cooperation and Development (the “OECD”) published revised anti-corruption guidelines, the Recommendation for Further Combating Bribery of Foreign Officials (the “2021 Recommendation”). These guidelines update the original recommendation from 2009 and significantly expand the expectations of member countries regarding anti-corruption enforcement.

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What’s Old Is New Again: DOJ’s New Corporate Criminal Enforcement Policies Equip Prosecutors with More Tools and Information

by Alicyn Cooley and Matthew Levine

The approach of the Biden Justice Department to corporate and financial crime continues to emerge—or re-emerge. Corporations with federal criminal exposure must now, again (PDF: 463 KB), provide information on all individuals responsible for misconduct in order to receive cooperation credit from the Department of Justice. And corporations which resolve that exposure pursuant to Deferred Prosecution Agreements (DPAs) or Nonprosecution Agreements (NPAs) with DOJ will also now face the increased likelihood of independent monitorships—the use of which waned considerably in recent years, even before the Trump administration explicitly discouraged imposing them in 2018 (PDF: 4.9 MB).

In keynote remarks delivered yesterday at the American Bar Association’s National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco announced these and other new DOJ policies and initiatives, all of which are reminiscent of the Obama Administration’s approach to corporate criminal enforcement. In particular, companies and practitioners should take note of DOJ’s stated commitments to: (1) equipping prosecutors with more information and tools—including monitors—to root out corporate crime and ensure corporations comply with the law and the requirements of their agreements with DOJ; (2) proactively using data accumulated about past corporate resolutions, including taking into account corporations’ full criminal and regulatory histories; and (3) standardizing approaches to corporate enforcement across DOJ and the U.S. Attorneys’ Offices.

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Will They Finally Test Compliance?

by Brandon L. Garrett

Compliance continues to be an important aspect of settlements in corporate prosecutions. In a recent article, “Testing Compliance,” Greg Mitchell and I argue that neither companies, but particularly not government regulators and enforcers, should treat compliance as “hope-based,” where they ask whether it seems well-intentioned or likely to comply with best practices. Instead, they should empirically test compliance to find out whether it in fact works. It is understandable that companies do not generate self-critical testing data, when government does not require it. But it is most troubling of all that governments have not incentivized generation of information about what actually works.

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France Moves to Boost Its White Collar Enforcement

by Antoine F. Kirry, Alexandre Bisch, Aymeric D. Duoulin, Fanny Gauthier, and Karolos Seeger

On July 7, 2021, a French National Assembly Committee led by MPs Raphaël Gauvain and Olivier Marleix, published a long-awaited 180-page evaluation report about France’s anti-corruption law of December 9, 2016 (the so-called “Sapin II Law”)[1]. While recognizing the significant progress made by France in its fight against corruption and tax fraud over the last five years, MPs suggest further strengthening the existing legal framework. Their 50 recommendations cover various topics, including the French-style deferred prosecution agreement; the self-reporting of corporate crimes; corporate criminal liability criteria; the introduction of a new pre-trial guilty plea; French extra-territorial enforcement of corruption crimes; and the role of the French anti-corruption agency. We provide below the main highlights of the report.

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Biden: The Fight Against Foreign and Transnational Corruption Is a National Security Interest

by Kimberly A. Parker, Jay Holtmeier, Christopher Cestaro, John F. Walsh, Edward C. O’Callaghan, Ronald C. Machen, Lillian Howard Potter, Chavi Kenney Nana, Zachary Goldman, Mandy Fatemi, and Gemma Bateman

On June 3, 2021, President Biden issued a National Security Memorandum establishing the fight against corruption both at home and abroad as a core United States national security interest and directing the development of a 200-day interagency review designed to culminate in a report and recommendations on how the United States government and its partners can better combat corruption, enhance transparency in the global financial system and promote good governance. When combined with the anti-money laundering (AML) legislation that entered into force with the January 2021 bipartisan passage of the National Defense Authorization Act for Fiscal Year 2021 (NDAA)[1]—the most significant reforms to US AML laws since the 2001 adoption of the USA PATRIOT Act—and a review of sanctions policy conducted by the Treasury Department, the Memorandum may lead to a heightened focus on illicit financial activity and corruption and may ultimately result in additional resources being allocated to anti-corruption and AML enforcement. Continue reading →