Record-Breaking FCPA Sentence Highlights the Benefits of Cooperation
Since the turn of the Century, it seems that every new year brings yet another watershed moment in the Foreign Corrupt Practices Act (FCPA) enforcement. In 2008, it was Siemens record-breaking $800 million fine. In 2009, it was the most FCPA actions ever brought by the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) in a single year. And in 2010, it’s yesterday’s news that a Virginia businessman has received the longest prison sentence ever handed down in an FCPA prosecution.
Charles Jumet, who pleaded guilty to charges that he bribed Panamanian officials to win maritime contracts for Ports Engineering Consultants Corporation between 1997 and 2003 and made false statements to federal investigators, received an 87-month prison sentence and a $15,000 fine from U.S. District Court Judge Henry Hudson yesterday. Assistant U.S. Attorney General Lanny Breuer hailed the decision as “a milestone in our efforts to deter foreign bribery” and confirmation that “foreign corruption carries with it very serious penalties, which can include substantial prison time for individuals who violate the law.”
That’s a powerful statement from the DOJ’s leading man on FCPA matters. But even more telling were the words of Judge Hudson, who told Mr. Jumet that had he not lied to U.S. officials about an $18,000 check written to a high-ranking Panamanian official, “my view of this case would be totally different.” While it’s important to note that the 87-month sentence was the minimum allowable under federal sentencing guidelines, it’s also important to remember that such a harsh sentence has never been handed down before. What all of this tells us is that being upfront and as cooperative as possible when FCPA violations come to light is a significant step toward the lighter side of prosecutorial and judicial discretion.
As was evidenced by the $185 million penalty levied on Daimler earlier this month (a relatively modest sum, given what we saw in the Siemens case mentioned above), judges and federal prosecutors have historically been far more lenient with companies that cooperate fully or that actually blow the whistle on themselves before an alleged FCPA violation is disclosed.
With recent comments by Assistant Attorney General Breuer echoing that sentiment, companies doing business overseas should now have all the evidence they need that honesty is truly the best policy when it comes to FCPA investigations.
Richard S. Levick, Esq. is President and CEO of Levick Strategic Communications, the nation's top crisis communications firm, and a contributing author to Bulletproof Blog. Connect with him @richardlevick.