Thank you, Joe, for that kind introduction. This is the fourth year in a row that I have been privileged to address this conference.
I am told that I have been the longest serving Assistant Attorney General of the Criminal Division in nearly 50 years. And during my time as head of the division, I have spoken about our ambitious efforts in the United States to fight foreign bribery, perhaps more than on any other subject, and all over the world. I have traveled around the globe – from Russia and Romania, to Liberia and Ghana, from Sweden and France, to the Ukraine and the U.K. – to discuss our anti-corruption enforcement work. And just as I have done here, I have told those countries that combating corruption around the world is, and will remain, a priority of the United States.
This message resonates in every country, because everyone – from the fruit stand owner in Tunisia, to the oil rig worker in Nigeria, to the punk rock musician in Russia – knows how pernicious corruption can be; and we in the United States are in a unique position to spread the gospel of anti-corruption, because there is no country that enforces its anti-bribery laws more vigorously than we do. The Justice Department’s record of accomplishment in this area is a signature achievement of ours, and I’m delighted to have this occasion to address you once again.
Three years ago, I came here and told you that, building on the work of my predecessors, I was going to make fighting corruption, and expanding our enforcement of the Foreign Corrupt Practices Act, a critical piece of the Criminal Division’s mission. I think I’ve kept that promise. Since 2009, the number of prosecutors we have devoted to working on FCPA cases has approximately doubled; we launched a new initiative – the Kleptocracy Asset Recovery Initiative – through which we seize and forfeit the assets of corrupt leaders around the world; and we have also rebuilt the Public Integrity Section – which is one of the Department’s crown jewels.
As a result of our efforts over the past three-and-a-half years, robust FCPA enforcement has become part of the fabric of the Justice Department: Our global anti-corruption mission has seeped into the Criminal Division’s core. And there is no turning back. The FCPA is now a reality that companies know they must live with and adjust to; and this nation is better off for it.
The dramatic change in the way the corporate world thinks about the FCPA didn’t happen overnight. It is the product of years of work, by a talented corps of dedicated and tenacious prosecutors. This audience, perhaps more than any other I’ve addressed, knows our record. I’ve heard that there are even several blogs that keep track of each one of our cases, which I think is terrific.
I will point out just two statistics: First, since 2009, our FCPA Unit has entered into over 40 corporate resolutions, including nine of the top ten resolutions ever, as measured by the size of the penalty, resulting in over $2 billion in fines. Second, since 2009, we have secured convictions against over three dozen individuals. One corporate executive, the former president of Terra Telecommunications, was sentenced to 15 years in prison – the longest sentence ever imposed in an FCPA case.
Looking back at these cases, and thinking about the ones in the pipeline, I see a Criminal Division that is focused on the cases and investigations that matter. We are focused on bribes of consequence – ones that have a fundamentally corrosive effect on the way companies do business abroad. And our record of success has meant that corporate executives now actually believe – for good reason – that if they participate in a scheme to improperly influence a foreign official, they face the very real prospect of going to prison. That may be our single most important achievement.
Because the prosecutors handling FCPA cases for the Criminal Division are experienced, sophisticated lawyers, companies also know that we are always attempting to strike an appropriate balance between vigorous and responsible enforcement.
The most vivid, recent illustration is our prosecution of Garth Peterson. As a managing director of Morgan Stanley, Peterson conspired to circumvent Morgan Stanley’s internal FCPA controls in order to transfer a multi-million-dollar ownership interest in a Shanghai building to himself and a Chinese public official with whom he had a personal friendship. Morgan Stanley voluntarily disclosed Peterson’s conduct, cooperated with our investigation, and showed us that it maintained a rigorous compliance program, involving extensive training of bank employees – including Peterson – on the FCPA and other anti-corruption measures. So we decided not to bring any enforcement action against the bank. But Peterson had to face the music. He pleaded guilty to conspiring to evade Morgan Stanley’s internal FCPA controls, and is currently serving time in federal prison, in Edgefield, S.C.
When we announced earlier this year that Garth Peterson had pleaded guilty, we took the unusual step of publicizing the fact that we were declining to bring a case against Morgan Stanley. Three days ago, I would have told you that our decision to make that declination public best illustrates our commitment to transparency. But, this past Wednesday marked an even more vivid example of that commitment.
Last year, I told you, in this room, that in 2012 we would release detailed guidance on the FCPA’s criminal and civil enforcement provisions. On Wednesday, keeping that promise, S.E.C. Director of the Division of Enforcement, Robert Khuzami, and I announced the release of A Resource Guide to the U.S. Foreign Corrupt Practices Act.
At roughly 120 pages, the Guide may be the most comprehensive effort ever undertaken by either the Justice Department or the SEC to explain our approach to enforcing a particular statute. I am extraordinarily proud of the lawyers and staff in the Criminal Division and at the SEC who worked on the Guide over the past year. In it, we analyze the central provisions of the Act and provide commentary and analysis for enterprises big and small – from small businesses doing their first transactions abroad to multi-national corporations with subsidiaries around the world.
Transparency is, of course, a worthwhile goal all by itself. We want U.S. businesses, foreign officials, non-governmental organizations and others to understand why we prosecute FCPA cases as vigorously as we do, and also how and why we make our charging decisions. But there are additional reasons why we strive to be so open in this area. The vast majority of companies doing business internationally want to get it right. They want to comply with the FCPA – and they know they may face Justice Department prosecutors and S.E.C. enforcement lawyers if they don’t. The Guide, which is perhaps the boldest manifestation of our transparent approach to enforcement, will help businesses that are unsure of their obligations, and should therefore improve compliance. Compliance officers and others have, over the years, worried out loud to me that their employees live in doubt. Does the cup of coffee they bought for a contracting official violate the FCPA? Will paying for a taxi for someone who might be a foreign official land them in prison? As you will see, the Guide addresses those questions and many others.
The Guide is the product of a remarkably close collaboration between the Criminal Division and the SEC’s Division of Enforcement. It could not have happened without the close partnership our two agencies have developed. And, as a non-neutral party, let me say that the Guide is simply an extraordinary piece of work. No guide will satisfy every constituency, and I would be surprised if the people in this room thought the Guide answered all of their questions. But, I think it’s fair to say that the Guide is one of the most comprehensive efforts ever by law enforcement to explain how and why we do what we do.
Thirty-five years after Congress passed the FCPA, we are in an important, and developing, era of foreign bribery enforcement. Countries across the globe are passing new anti-bribery legislation, or revising outdated laws. Russia, China, India, Sweden, the U.K. – the list goes on and on. More countries are also joining international bodies such as the OECD Working Group on Bribery. And we are cooperating with foreign law enforcement on FCPA cases more closely than ever before. In addition to our well publicized FCPA prosecutions, we have recently had our first Kleptocracy Initiative successes. In June, we successfully forfeited over $400,000 belonging to a corrupt former governor of a Nigerian oil-producing state; and since July we have secured restraining orders against more than $7 million in proceeds related to a different governor of another oil-producing state in Nigeria, including the proceeds from the sale of a penthouse unit in the Ritz-Carlton in Washington, D.C. Also, just this week, we announced the forfeiture of $2.1 million worth of property purchased with alleged bribes paid to the family of the former president of Taiwan. These are challenging, and extremely meaningful, cases. Our theory is simple: Corrupt leaders should not be allowed to use the United States as a safe haven for their ill-gotten gains; so, even if we cannot pursue you criminally in the United States – because we lack criminal jurisdiction, for example – we will pursue your assets.
As Assistant Attorney General, I am acutely aware that we have many urgent law enforcement priorities – fighting child exploitation, stemming the flow of narcotics from South America and elsewhere, stopping gang violence. I am here to tell you that fighting global corruption is just as urgent, and with the momentum of many countries behind us, now is the time to redouble our anti-corruption efforts. Because corruption – at home and abroad – has such corrosive effects, I have pledged to use every tool at our disposal to fight it. Not only does corruption undermine the public trust and weaken democratic institutions; it also creates gaps in government structures that organized criminal groups and terrorist networks can exploit. In short, corruption is a “gateway crime” that we must do everything we can, working with others around the globe, to stamp out.
Some practitioners and commentators see FCPA enforcement as no more than an esoteric area of the criminal law. But, for me, the global anti-corruption fight is so much more than that. During my tenure as Assistant Attorney General, I have seen people agitate for the rule of law during the Arab Spring. I have seen, first hand, how nations in upheaval are struggling to cope with corrupt leaders. I have spent time with our Justice Department prosecutors stationed abroad, who are fighting to establish rule-of-law programs in emerging democracies and contending with governments that are ill-equipped to resist corruption. And I have seen, first hand, people across the globe demanding more from their leaders. For me, our enforcement of the FCPA – as well as our Kleptocracy and capacity building work – is our way of ensuring not only that the Justice Department is on the right side of history, but also that it has a hand in advancing that history.
The idea that a company could get away with bribing foreign officials for the sake of corporate profits didn’t make sense 35 years ago. It doesn’t make sense today. As I have tried to convey to you in the four speeches I’ve delivered here, nothing is more important than curbing corruption around the world – and we must, and we will, continue to do everything we can to ensure that young people across the globe can dream big dreams without having to worry that a corrupt leader will extinguish them. It’s a critical mission, and one I’m very proud to be part of.
It has been my privilege to speak with you once again. Thank you.