The FCPA exists to prevent corruption between US entities and overseas officials. To crack into this highly competitive practice, “a natural curiosity for different cultures and languages and an interest in different government systems” could take you far.
Chambers Associate: In layman’s terms, what is the FCPA and what does it entail?
Ernesto Alvarado, associate: FCPA stands for the Foreign Corrupt Practices Act, an American law that prohibits US entities from bribing foreign officials in exchange for business interests. The law was introduced following the Watergate scandal where a congressional investigation found that a lot of US companies were maintaining secret slush funds to pay bribes to public officials throughout the world in exchange for political influence or government contracts.
Billy Jacobson, partner: It's aimed at the bribery of non-US government officials by US companies or US exposed companies, including foreign companies that are issuers on US exchanges like the New York Stock Exchange or NASDAQ, or have other connections to the US that bring them within the ambit of the statute and within the US jurisdiction.
Jonathan Lopez, partner: What's interesting about the FCPA, to me at least, is the dormancy period it had from 1977 of its passing until the mid-2000s. Then, the leadership at DOJ brought it to the forefront. A great example of that was in a 1990s case against GE. It was a multi-count indictment and FCPA was the last count – typically when DOJ charges, the most important charge is number one, and the least is at the end. It really has blossomed as an enforcement mechanism, and one that wasn't necessarily predictable when I was in law school from ‘97 to 2000. When I joined DOJ, I was part of the interview committee and some folks coming into the fraud section said ‘Put me anywhere but FCPA’ as they didn’t do a lot of trials. But now there are a lot more trials in the unit and a lot of people really strive to get in.
“FCPA cases are enforced all over the world.”
BJ: In terms of the growth of FCPA, I don't think we can overstate the importance of Sarbanes-Oxley. It came into effect 2002/2003 and caused companies to do a lot more mandatory navel gazing about their own books and records and their own accounting controls. When they were doing that, they found these problems and they didn’t know what to do with them. A tradition grew up around disclosing them to the Department of Justice for a host of complicated reasons. These disclosures to the DOJ and the SEC, combined with the enhanced enforcement priority which came around at about the same time, led to this explosion in settled cases starting circa 2006-2007.
EA: With the increased interest on regulation of the finance industry during the financial crisis of 2008, the FCPA became an increasingly important law enforced by US regulators and that gave rise to a generation of attorneys that focused on anti-corruption, anti-bribery, and internal investigations into the activities of corporations and their managers, directors, and personnel abroad. Generally, FCPA cases are enforced all over the world, with some of the most significant ones being enforced against foreign companies with US contacts.
CA: Tell us a bit about the FCPA work at Allen & Overy.
Erin Sisson, associate: Within our litigation group we have a variety of informal sub-practices, encompassing both civil litigation and investigations. Much of the FCPA work we do is related to investigations, although the broader investigations practice can include not only FCPA and anti-bribery, but also things like sanctions and financial crimes. I should also note that it's not just on the investigation side where you have FCPA work, but also in terms of assisting with diligence internally before any sort of investigation is pursued.
Andre Gurayah, associate: In addition to focusing on the FCPA and investigations that the DOJ or SEC brings, we also deal a lot with the UK Serious Fraud Office and the UK Bribery Act, which is essentially the UK equivalent to the FCPA.
Melinda Bothe, associate: FCPA work at Allen & Overy is both proactive and reactive. We assist our clients through FCPA enforcement actions brought by the DOJ or SEC, which is often what you see in the news, but we are frequently engaged to help clients minimize FCPA risk internally. This latter work may involve advising a client to improve their FCPA compliance program, or assisting them through an internal investigation when red flags for corruption are identified. Some matters involve a mix: we advise the client through a government investigation and resolution, and then we help improve the compliance breakdown that got them in trouble in the first place.
CA: What kind of work can associates expect in this area?
ES: Associates can experience work on the full spectrum from very proactive to reactive. In terms of your more day-to-day, one of the nice things about A&O is the teams are a little bit leaner so you get experience very early on. So, even if you're starting on a big investigation where the government has already come to a company thinking there might be an issue, you'll still get to take part in not just the obvious document review but also in helping prep for witness interviews and government presentations.
MB: A&O associates can expect to work on nearly every stage of an FCPA investigation, which can be long-running and involve a multitude of jurisdictions and fact patterns. Associates are expected to be knowledgeable about the facts of a case, which we typically learn through document review, witness interviews, or working with external forensic consultants. Depending on the nature of the investigation, they may also assist in preparing advocacy and assisting in the resolution negotiations with the government. FCPA cases, in particular, present unique challenges for associates because a matter might involve several languages, or the conduct may have taken place in a country with complex legal or political systems.
“We usually have the opportunity to interview employees at the company that might have knowledge about the alleged wrongdoing.”
AG: In addition, with both the government investigations and internal investigations that we do, we usually have the opportunity to interview employees at the company that might have knowledge about the alleged wrongdoing. From these interviews, we can really start to get more of the context for the documents and the email communications that we're seeing and really fill in the gaps by talking to these people. With every matter that I've worked on, I feel that I get a good understanding for the politics of certain nations and who the key players are.
EA: Just bouncing off Andre’s point, sometimes extensive travel is also involved, which could definitely interest people who want a more international practice and to learn about the FCPA and different anti-corruption mechanisms in other countries.
CA: How does your experience working with the DOJ compare to your role as partner at A&O?
BJ: Well, after having been at DOJ, it helps to be in private practice as it helps you understand how the DOJ prosecutors are thinking, how they're going to look at a fact pattern, and within FCPA, if you've done FCPA cases in the government, you've got more of a sense than someone who has not. There's only one part of DOJ that is responsible chiefly for investigating and prosecuting cases, and that's the section that Jonathan and I were in: the fraud section of the criminal division. Having been an FCPA prosecutor at the fraud section does give you a unique view on the statute and how prosecutors are going to view this statute, which is not necessarily intuitive.
JL: I can't underscore enough the distinction Billy is making there with understanding how DOJ is structured. DOJ is often thought of as just one big entity with very little distinctions within it. The reality is that the main justice and fraud section have different roles than other parts of DOJ. The fraud section has, per US guidelines, the final say on FCPA matters. Thus, knowing how that section works and how their decisions are made is really helpful to clients and being able to help those clients appropriately.
CA: What are the highs and lows of the practice?
JL: My highs are more on the government facing side as a result of my background and in particular when you're able to show the government that their case is not what they think it is, that’s a high. With the lows, when I began doing FCPA trials, I thought the statute was simply, ‘don’t bribe,’ but the elements of the statute that you have to prove are actually pretty complicated. Having to explain it to a jury and being worried that the jury wouldn’t care about some bribery that happened overseas, that was my biggest fear. They would then come back with a guilty verdict within a couple of hours, so clearly they did care and that was a high for me.
BJ: One challenge is that there are still plenty of companies for whom the lightbulb is just going on with regard to the need to have an anti-corruption program. It is a challenge to explain to them why they need a program. It can sound like you're selling them your services when you're really selling them on what they truly need. It's definitely not a low and it’s enjoyable meeting new clients as well, but it can be challenging.
“FCPA matters have very interesting documents and you tend to come across some very scandalous points, so it keeps you entertained and engaged.”
ES: There are a lot of highs, but sometimes they can have a double-edged sword of being a low. For example, when you're going to Mumbai for two days, you know the flights there and back take longer than that, so then you turn around and it’s time to go somewhere else. It can be a lot, but it's really interesting and it’s part of the fun experience. The highs are going different places, doing different things and learning so much about different sectors.
AG: I could tell you everything about the Kazakhstan oil and gas industry or how the tobacco sector works in a certain country, and what the regulations are that relate to that. That in-depth knowledge on arcane subjects is great. Another high is the document review which I know juniors at other places complain about, but the FCPA matters have very interesting documents and you tend to come across some very scandalous points, so it keeps you entertained and engaged.
CA: How has Covid-19 impacted FCPA matters?
EA: Despite the world shutting down, FCPA investigations kept on rolling. Early on in the pandemic, government authorities were sympathetic to the situation, but reinforced the idea that companies still had to maintain internal controls required by various anti-corruption laws, including the FCPA. For us that included reviewing and assessing corporate activities, such as various business transactions and donations companies were being asked to make, so our work never really ended during the pandemic.
BJ: The quarantine period has woken us up to efficiencies we can bring to the practice going forward. On the compliance side, we've been able to do compliance audits, compliance reviews, compliance assessments, and diligence exercises pretty seamlessly over video. Perhaps they would be 10% better if they were in person, but when you factor in the cost of traveling around the world to do that, 10% may not be worth it.
“The idea of subjecting that person to a government interrogation when you're not by his or her side is very nerve-wracking.”
On the investigation and government facing side, I think that's where the work slowed because it's very hard to interview a witness, particularly someone who might be a target of an investigation, over video and be able to size them up and judge their body language. The idea of subjecting that person to a government interrogation when you're not by his or her side is very nerve-wracking. You can't put your hand on their arm and say, ‘OK, let's take a break,’ or, ‘Is that really what you meant to say?’ This has slowed a lot of the government work because defense counsel is not letting clients be interviewed over video.
AG: The biggest difference is the travel. A lot of the relevant players that we work for are typically based in other countries and we'd like to be there in person when we're interviewing them just to be able to pick up on any particular cues. Since the pandemic, travel has been incredibly limited and we’ve been having a lot of these conversations over MS Teams or WebEx. Unfortunately, I think longer term that may ultimately mean less travel for the associates on these matters.
CA: What are the latest trends and developments in FCPA?
EA: One has to do with all of the various governments around the world that are now in drafting and enforcing anti-corruption laws. Rather than giving rise to competition, it has increased cooperation between regulatory agencies. I assisted clients on several matters where there were multiple government regulators collaborating on very extensive reviews of our clients. This type of cooperation will likely continue to grow, which means that the scope of investigations or reviews are going to become increasingly expansive.
CA: Would you agree that, as international anti-bribery enforcement evolves, there’s a chance of the US losing its place as the leader in anti-bribery enforcement and investigations?
JL: It's an interesting question. There are other countries obviously trying to build out a regime of anti-corruption enforcement. What the US really does need to contend with is, regardless of what stage of development they're in, how much of that pie do you take? The DOJ is trying to say, ‘We're not going to pile on and we recognize the importance of other countries developing their own regimes.’ The Airbus case is a prime example of this where the US took a smaller portion of the settlement amount compared to others or what it might normally take, but it was still a multi-billion dollar settlement. If the pie is that big, does it matter that you're only taking a couple hundred million versus two billion?
“The Biden administration appears to have a keen desire to continue a high level of enforcement and investigations.”
BJ: These other countries are getting their enforcement mechanism under way, which the US government is very happy about because for years the US government has talked about trying to level the playing field for US businesses, to make sure US exposed companies weren’t playing by different rules compared to the rest of the world, which now they aren’t. Nations such as France, Germany, Switzerland, UK and Brazil are getting into the game and they're enforcing anti-corruption laws too, and DOJ and SEC welcomes it. This is not an area where, as a matter of government policy, we want to be alone.
EA: The US will not lose its place as it has really continued to emphasize the importance of the FCPA and I think the Biden administration appears to have a keen desire to continue a high level of enforcement and investigations. With that being said, the US also defers and regularly cooperates with other regulators in their investigations into allegations of corruption.
CA: Are there any specific skills or background knowledge required to excel as a lawyer in this field?
JL: I think all of it requires some raw skillsets such as common sense, judgment and the ability to adapt to changing circumstances. If you have those three raw skillsets, you’ll excel. You should also keep your mind open to working in different areas of the law since it’s so vast.
“You've got to have a natural curiosity and appreciation for different cultures and languages, and an interest in different government systems.”
BJ: I agree. To be successful in the anti-corruption work, you've got to have a natural curiosity and appreciation for different cultures and languages, and an interest in different government systems. Naturally, the field attracts people who have that interest, because otherwise they’d just be domestic focused. So if a law student is considering white-collar work and they have this interest, then FCPA could be a good fit.
The other place that it's a little bit different than most other white-collar fields is the blend of compliance with investigations and enforcement. There are plenty of practitioners who only do compliance and many who only do the enforcement investigation side, but there are also those of us who do both, and that enables you to use different parts of your brain at different times for different clients.
EA: Language skills are a premium in this sector, but I would not say it is a requirement. It has helped us obtain a better cultural understanding of the different countries we operate in. For example, there are so many different terms in different languages for “bribe” that we would miss if we only translated the literal word. Knowing the local language during a review provides key contextual information and allows us to better communicate with the client and its personnel, resulting in more accurate and effective reviews. Another important skill is an attention to detail. In many of these cases, the devil is in the details so you have to find information that is important to an investigation or review, whether in emails, text messages, or other data collected.
AG: I would just add that having organizational skills really comes in handy when you’re working on an ongoing matter for which you’re able to connect the dots even a year later.
CA: What opportunities in the area are unique to Allen & Overy?
BJ: Our global footprint is number one. We’re the opposite of many big US firms because for the last ten years, they’ve been expanding overseas, but we’ve been expanding into the US and we’ve had a major global presence for decades. That brings a lot of opportunity for FCPA because if you look at the companies who are the subject of FCPA enforcement matters, a majority of them happen to be non-US companies who are US exposed. Another point is the expertise. We've got anti-corruption and criminal law experts across Europe, Asia, and even in Africa, and most firms cannot say that.
ES: You get the opportunity to work on extremely broad matters that can touch on so many different jurisdictions in so many different places. You'll have clients coming in from all over the world and will be working with colleagues across the globe. I love the cross-border aspects of the cases.
AG: I've gotten the opportunity to work with a lot more people in different offices across the world. There have been questions that have come up on certain matters where we can’t pull a court document unless we have someone in that specific country do so. A very specific example happened today actually – Billy reached out to a partner in Italy because there was a recent decision that impacts our work, and our Italian colleagues were able to provide us with a lot of information that we wouldn't be able to get ourselves. I've worked on investigations with associates in Moscow and Paris, and I believe this experience is fairly unique to A&O as it truly is a global law firm.
