CORPORATE CRIME REPORTER
Piper’s Sharie Brown on the FCPA, UK Hype, and the Dark Empire
25 Corporate Crime Reporter 5, January 31, 2011
Some people believe that the UK will be the new anti-bribery cop in the world.
Don’t believe the hype, says Sharie Brown.
Brown is a partner at DLA Piper.
“It is interesting that you are focusing on the new UK anti bribery act,” Brown told Corporate Crime Reporter in an interview last week.
“I am not impressed at all that this law will have the impact that many practitioners are saying it will have.”
“I remember being surprised about a year and a half ago when then FCPA enforcement chief Mark Mendelsohn was quite critical of the UK’s anti-corruption enforcement office and how lacking they were in pursuing anti-corruption actions against companies in the UK suspected of bribery and corruption.”
“He was very vocal and critical.”
“And yet look at what has happened since. The UK Bribery Act was passed last spring. And then almost immediately, officials at the Serious Fraud Office announced that implementation would be deferred until April 1.”
“What immediately struck me was they had this law, they passed it, and they immediately delayed implementation of it to give time to companies to figure out what they need to do to set up their compliance programs.”
“Most recently I read this week that a number of the investigators and prosecutors who work at the Serious Fraud Office had left that office and are joining large law firms so that they can make a lot of money when the law is ultimately implemented.”
“And then I also read recently that some components of the law may be softened in response to business concerns and pressures.”
“So, even though there has been a lot written about this law and how much more extensive it is and the fact that it also includes an offense for the official who receives the bribe, not just the parties who pay the bribe, and it deals with commercial and foreign bribery, there remains in my mind the question about whether there is the will and the resources and the tenacity to enforce this law in all of its elements to the same extent that we aggressively enforce the FCPA.”
“What I hope does not happen is that a tough new law is passed, implementation is deferred, and then the Serious Fraud Office does not actively pursue enforcement.”
“There are anti-corruption laws in every country in the world – some of which are more rigorous and comprehensive than the FCPA.”
“And those laws mean nothing if they are not actively enforced.”
“And I have not seen a lot to convince me that the UK will be enforcing this law in as vigorous a way as practitioners are expressing.”
“Some lawyers are engaging in fear mongering – you have to do this, because if you don’t this will happen.”
“But I’m not convinced there will be a whole lot of enforcement activity in the UK as a result of this law.”
“So far, they haven’t shown a great appetite in pursuing UK companies on corruption issues.”
“And it takes a very large staff and will to pursue companies around the world as their law allows them to.”
“So, we’ll see.”
“At this point, companies should be mindful of the UK law and put in place appropriate procedures.”
“But for the foreseeable future, the law that remains to be feared most will be the FCPA.”
“There is no country in the world that enforces more aggressively than the United States on anti-bribery matters.”
There are areas of law enforcement that impact Americans to a far greater degree – health care fraud, securities fraud.
So why is it that FCPA practice is so hot right now?
“I’ve been involved with FCPA practice since the mid-1990s,” Brown says.
“I’m not new to this. But there are many lawyers who have been attracted to this practice in the last three years.”
“Some of it is pure economics,” Brown says. “There has been a recession. Law firms have had huge layoffs.”
“Some practitioners are simply not generating the income they have in the past.”
“And when you look at some of the public filings from FCPA disclosures and you see the legal fees generated from an FCPA enforcement action, you see why law firms are gravitating to the moneyed practices.”
“There are many lawyers today practicing in the FCPA area who have come to it in the last year or two.”
What about former FCPA prosecutors who jump ship and begin defending big companies after prosecuting them for years?
“There is real value to having a former prosecutor” defend a company in a FCPA case, Brown says.
“So, that I understand,” she says. “What I don’t understand is this – FCPA prosecutors consider companies to be the dark empire.”
“Why then are they so attracted to represent the dark empire just a few years later – other than the money?”
[For a complete transcript of the Interview with Sharie Brown, see 25 Corporate Crime Reporter 5(12), January 31, 2011, print edition only.]
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