Podcast

Today’s episode of All Things Investigations is a deep dive into the 2023 FCPA Alert with Tom Fox, Laura Perkins, and Kevin Abikoff from Hughes Hubbard and Reed. They unravel the complexities of the latest updates in anti-corruption laws, focusing on the impact these changes have on companies in the U.S. and abroad. They share a detailed analysis of the current anti-corruption enforcement landscape practical advice for navigating these legal waters, and how we can draw inspiration from a rock and roll great.

Laura Perkins and Kevin Abikoff, from Hughes Hubbard’s Anti-Corruption and Internal Investigations Practice Group, join Tom Fox in this episode. Laura Perkins is the former Assistant Chief for FCPA enforcement at the DOJ, and Kevin Abikoff is a prominent attorney specializing in compliance, anti-corruption law, and internal investigations. Their combined insights provide a unique perspective on the challenges and strategies in compliance and anti-corruption, crucial for businesses operating globally.

In this episode, you’ll hear Tom, Laura, and Kevin discuss:

• Why the FCPA Alerts from Hughes, Hubbard, and Reed always start with a quote from a popular artist – this year’s from Jimmy Buffet: “Go fast enough to get there but slow enough to see.”
• The guidance that was originally issued in 2021 has evolved as the Department of Justice gains experience with the policies and how they want companies to follow them.
• Empowering compliance officers who are on the front lines of protecting companies and shareholders, and how doing so is ultimately good for business.
• What it can mean for companies to self-report to the DOJ and whether or not all of the implications have been considered.
• For years, the DOJ has been talking about compliance incentives, repercussions, and compensation, and this year, they have taken it a step further by allowing companies to benefit via reductions in fines based on their efforts to bring repercussions to individuals involved in misconduct.
• Company boards are obliged to exercise business judgment, which includes taking into account financial repercussions or pursuing bad actors. The new guidance may open the floodgates for private plaintiffs to sue boards that do not.
• Lessons learned from specific enforcement actions from DPA’s, NPA’s, and Declinations, specifically the Ericsson and ABB resolution.
• The scope of anti-bribery and anti-corruption enforcement outside of the US, looking at France, Brazil, and China.
• A growing number of countries are entering the sphere of FCPA enforcement actions in the US and elsewhere.

Key Quotes:

“In the world of sanctions enforcement, obviously there’s a need for speed. We’ll talk about the M&A release that’s come out and the rapid speed at which the DOJ expects you to do everything. Buffett’s quote for us is a reminder that you have to go fast, but you better be looking at what you’re doing as you go.” – Kevin Abikoff 

“At what point is a company meant to chase a million dollars, or two million dollars by commencing litigation?” – Kevin Abikoff

“The corporate enforcement policy is an evolution from the original FCPA pilot program. As the department gains experience with these policies and they see some change in the way companies operate and the way their investigations are proceeding, they’re able to fine-tune the policies.” – Laura Perkins

“By and large, prosecutors understand the issues that companies face from labor laws in other countries.” – Laura Perkins

Resources:

Hughes Hubbard & Reed website 

Laura Perkins on LinkedIn 

Kevin Abikoff on LinkedIn

Tom Fox

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This episode of All Things Investigations explores the recent EU Corporate Sustainability Due Diligence Directive that could transform compliance programs and corporate governance globally. Tom Fox and Nicolas Tollet analyze the Directive’s provisions mandating human rights and environmental risk management across company value chains. Nicolas explains how the law builds on France’s pioneering 2017 Duty of Care legislation and its impact on corporate accountability for both EU and non-EU multinationals.

Nicolas Tollet is a Partner at Hughes Hubbard. He previously served as Vice President for Compliance at Technip, an oil and gas service firm. With over 20 years of experience in compliance and internal investigations, he has worked on significant cases like Alcatel, TSKJ, and Lava Jato. Nicolas has expertise in monitorships, having been involved in the first one imposed on a French company by the DOJ and the SEC. He helps companies worldwide with compliance programs, audits, and M&A due diligence.

You’ll hear Tom and Nicolas discuss:

• The new EU Directive on Corporate Sustainability Due Diligence will require companies above certain revenue thresholds to implement human rights and environmental compliance programs, not just for their operations but across their entire value chain.
• France has been at the forefront of such legislation with its 2017 Duty of Care law. The EU directive builds on this, with more expansive requirements and penalties of up to 5% of worldwide turnover for non-compliance.
• The directive explicitly links human rights risks to corruption risks, recognizing their interconnection. It has the potential to drive even broader risk coverage than typical anti-bribery programs.
• By mandating due diligence across the value chain, the directive will necessitate contract terms like audit rights as standard procedure. Financial institutions may also need to evaluate the human rights impacts of clients they fund.
• The directive allows each EU country to determine how to specifically transpose and enforce the law’s obligations. This could lead to a complex web of overlapping inspection regimes applied to multinationals.
• Even companies not based in the EU will fall under the law if they meet certain revenue thresholds in Europe. Non-EU companies should tap French expertise since France is about 6 years ahead in implementing similar mandates.
• Required public sustainability reporting adds another layer reinforcing the need for concrete compliance actions. 
• While the US led historically on anti-corruption compliance, the EU is now at the vanguard of expanding into human rights, environment, and sustainability. France in particular has established itself as a leader in advancing corporate compliance expectations.

KEY QUOTES

“There is a direct link within the directive between human rights compliance and anti-corruption compliance, which the compliance community in the world has been seeing for years now.” – Nicolas Tollet

“So we shouldn’t expect one member state to be reluctant to enforce the legislation. The EU will make sure that every member state issue and then enforce the legislation in each country.” – Nicolas Tollet

“Fortunately, we are still linked in how we work in the business field, and we have to take both into account. So there is a certain pride indeed, because there is real expertise in France now on compliance, but it’s mixed between the French and the American compliance community, I would say. So it’s working together that we’ve managed to improve compliance.” – Nicolas Tollet

Resources:

Hughes Hubbard & Reed website 

Nicolas Tollet on LinkedIn

EU Directive on Corporate Sustainability Due Diligence: Navigating the New Landscape of Corporate Accountability

How can companies effectively remediate after uncovering misconduct? In this episode of All Things Investigations, Tom Fox discusses with Mike DeBernardis the lessons learned from the recent Albemarle FCPA enforcement action and settlement. They analyze the company’s self-disclosure timeline, the credit received for holdbacks, and the overall cooperation and remediation efforts that led to a favorable NPA.

Mike DeBernardis is a partner in Hughes Hubbard’s Washington office and a member of the firm’s Anti-Corruption and Internal Investigations and White Collar & Regulatory Defense practice groups. He assists clients with internal investigations relating to high-stakes matters, including corruption under the Foreign Corrupt Practices Act, procurement fraud, financial and accounting fraud, money laundering, and other ethics issues and violations of company policy. 

You’ll hear Tom and Mike discuss:

• The DOJ deemed Albemarle’s self-disclosure untimely, even though it was voluntary and unknown to the government. The 16-month delay from learning of allegations to disclosing crossed the line per updated standards.
• Companies should carefully evaluate timing when self-disclosing misconduct if they want to maximize credit. Even voluntary disclosures can be considered untimely under an evolving reasonableness standard.
• Albemarle discovered allegations in Vietnam in 2016, confirmed misconduct in early 2017, and then disclosed in January 2018 when FCPA Corporate Enforcement Policy permanence was still uncertain. 
• $780,000 in total bonuses were held back from employees directly involved, those with supervisory responsibility, and other relevant staff. Albemarle received a full 1:1 penalty offset.
• Contractual ability to withhold bonus payments is easier to execute than clawbacks of compensation already disbursed, especially across regions.
• Settlement dynamics were shifting during Albemarle’s decision timeline, but current standards still applied for judging timeliness. Pandemic delays also won’t change future judgments.  
• The egregiousness and duration of Albemarle’s schemes across multiple countries involving high-level executives would typically warrant a DPA or plea deal. Their cooperation and remediation directly led to the NPA result.
• Albemarle thoroughly investigated, cooperated, remediated, and self-disclosed even though the misconduct was not yet government-known. This approach clearly benefited them.  
• Implementing data analytics was called out in the settlement documents specifically. Even basic initial steps were still recognized and rewarded by the DOJ.

KEY QUOTES:

“And I think the lesson from this is doing something is better than doing nothing. Start to find ways. Work with your very smart people to find ways to incorporate some of the compliance data you have and find ways to use that to your benefit.” – Mike DeBernardis

“One of the things that companies don’t think about enough in these situations in the journey of Remediation is what business changes can we make? Because I think that could be really impactful, a really impactful, persuasive position is to say this company is different than the one who engaged in the conduct for various reasons.” – Mike DeBernardis

“And then the fact they self-disclosed, they really did everything right except in the DOJ’s mind, waited just a little bit too long before they self-disclosed.” – Mike DeBernardis

Resources:

Hughes Hubbard & Reed website 

Mike DeBernardis on LinkedIn