FCPA Enforcement: Why Corporations Support DPAs and NPAs

At the recent Dow Jones Global Compliance Symposium, there was a debate royal between Mark Mendelsohn and the FCPA Professor, Mike Koehler, regarding enforcement of the Foreign Corrupt Practices Act (FCPA). One of the points the Professor raised was regarding the proliferation of Deferred Prosecution Agreements (DPAs) and Non-Prosecution Agreements (NPAs) during the tenure of Mendelsohn at the Department of Justice (DOJ). The Professor argued that DPAs and NPAs, which did not come into wide spread use until the last decade, were tools which should not be employed for FCPA enforcement. One of the reasons he articulated this was that by use of these agreements the DOJ is not required to put proof in front of a judge or jury, hence the DOJ can expand its interpretation of the FCPA without appropriate judicial oversight. Mendelsohn countered that such agreements are within prosecutorial discretion and given a finite amount of personnel and monetary resources within the DOJ, an appropriate mechanism to assist the overall goal of compliance with the FCPA.

However, I would like to review the use of DPAs and NPAs from another angle and the perspective from another player in FCPA enforcement. That is the perspective of the corporation ensnared in an enforcement action. I will leave aside a discussion of the alleged expansive DOJ interpretation of the FCPA for another day and simply focus on why it is in the interest of a corporate defendant to enter into a DPA or NPA as opposed to being indicted and defending itself at trial.

Arthur Andersen

For those of you who do not recall, Arthur Andersen was the auditor for Enron and was caught up in the Enron scandal. In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants (CPAs) in the United States after being found guilty of criminal charges relating to the firm’s handling of the auditing of Enron ...

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