By: James W. Kraus
Speaking at IBC Legal’s World Bribery & Corruption Forum in London on October 23, 2012, Lanny A. Breuer, Assistant Attorney General for the Criminal Division, reviewed DOJ’s anti-corruption efforts during his nearly 3½ year tenure in the Criminal Division. He brought to light the Kleptocracy Asset Recovery Initiative wherein DOJ has brought civil actions against the proceeds of foreign officials who engage in corruption. According to Breuer, “Our theory is simple: even if we cannot pursue you criminally in the United States – because we lack criminal jurisdiction, for example – corrupt leaders should not be permitted to use the United States as a safe haven for the proceeds of their corrupt activities.”
As examples, he cited DOJ’s success in obtaining a restraining order against more than $3 million in corruption proceeds related to James Onanefe Ibori, the former governor of the oil producing Delta State in Nigeria, as well as restraints against an additional $4 million in Ibori assets, including the proceeds from the sale of a penthouse unit at the Ritz-Carlton in Washington, DC. He took the opportunity to review both FCPA-related and non-FCPA-related enforcement efforts, discussing resolution of a case against Credit Suisse, which included a forfeiture of $536 million in connection with violations relating to transactions conducted by the bank on behalf of customers from Iran, Sudan and other sanctioned countries.
Breuer also revisited a theme that he has emphasized in prior speeches, outlining the benefits of non-prosecution agreements (“NPAs”) and deferred prosecution agreements (“DPAs”) as important components of criminal law enforcement. He indicated that these enforcement options allow prosecutors to move beyond what 20 years ago may have been a stark choice; “either indict or walk away.” Breuer explained that over the past 20 years, the government has moved beyond that stark choice by “agreeing to deferred prosecution against a corporation in exchange for an admission of wrongdoing; cooperation with the government’s investigation, including against individual employees; payment of monetary penalties; and concrete steps to improve the company’s behavior.”
As part of his discussion of NPAs, Breuer cited the recent example of the resolution of allegations of criminal wrongdoing against Barclays Bank over the bank’s role in manipulation of the London Interbank Offered Rate (LIBOR). DOJ entered into an NPA with Barclays, which, in addition to a large payment, ended up including the replacement of top management at the bank. He stated that Barclays’ cooperation with the investigation was “extraordinary,” something that undoubtedly allowed Barclays to avoid prosecution.
Breuer also cited an example of a company avoiding criminal enforcement entirely by citing the example of Garth Peterson, a former managing director with Morgan Stanley, who entered a plea of guilty to conspiring to evade the bank’s internal FCPA controls. Breuer explained that because Morgan Stanley had disclosed Peterson’s misconduct, fully cooperated with DOJ’s investigation and demonstrated maintenance of a rigorous compliance program, DOJ declined to bring any enforcement action the institution.
Breuer indicated that DOJ will continue to attempt to strike an appropriate balance between vigorous and responsible enforcement.