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Fort Lauderdale Federal Crime Attorney > Blog > FCPA > Cos. Urged To Seek DOJ’s Opinion On M&A Bribery Risks

Cos. Urged To Seek DOJ’s Opinion On M&A Bribery Risks

Law360 (July 26, 2018, 8:40 PM EDT) — A U.S. Department of Justice official has urged corporations looking to acquire a company with possible Foreign Corrupt Practices Act risks to take advantage of the DOJ’s FCPA opinion procedure — but attorneys working in the space say that’s not always an option.

On Wednesday, Matthew Miner, the deputy assistant attorney general who oversees the DOJ’s fraud section, gave his first speech since joining the DOJ from Morgan Lewis & Bockius LLP. In the speech, Miner sought to encourage companies to report potential foreign bribery that comes to light before or after a merger or acquisition. If the issue comes up before the sale, Miner said companies can avail themselves of a little-used procedure for seeking the DOJ’s opinion on whether a particular transaction would trigger FCPA enforcement.

Miner called the process, which last produced an opinion in 2014, a “tremendous resource” that the DOJ wants to “encourage greater use” of, while still acknowledging that such a request for an opinion could take time.

“Although it may take a little more time — and we can, to a degree, expedite our analysis based on timing needs — it sometimes makes sense to slow down to assess risks,” Miner said.

Peter S. Spivack, a partner at Hogan Lovells, told Law360 on Thursday that it’s often not feasible to use the opinion procedure in a time-sensitive, competitive M&A environment.

“It’s cumbersome and has not been very company-friendly. Most companies in an acquisition situation simply can’t wait,” Spivack said.

The regulation governing the procedure allows companies to bring the DOJ facts about a planned transaction and seek advice as to whether it would trigger enforcement. Under the rule, the DOJ can ask for more information within 30 days and is supposed to give an opinion within 30 days of getting all relevant information.

William Steinman of boutique anti-corruption and FCPA firm Steinman & Rodgers LLP said that a month is not the time frame he associates with the FCPA opinion procedure.

“Let’s be candid, 30 days is a pipe dream. It can be months,” Steinman said.

Steinman added that FCPA or white collar counsel are not in the driver’s seat as deals take place, and that pleas to corporate attorneys to slow down to get an enforcement authority to weigh in “often fall on less-than-hospitable ears.”

Miner himself grappled with related issues in private practice. While he was a partner at White & Case LLP, Miner co-authored an article that proposed FCPA reforms in order to stimulate the economy. Miner noted then — as he did in his speech on Wednesday — that the information available to a buyer before a deal doesn’t exactly give the full picture.

“The quantum and quality of information available to an acquiring company during this phase can most often only point to potential problems and is simply not adequate to peel back the layers of a corrupt onion,” Miner wrote in the 2012 article.

Companies are more likely to get the right information after closing a deal and getting full access to the target company’s books, Miner wrote. In the article, Miner and his co-author, George J. Terwilliger III, proposed a grace period after a sale during which the new parent company could report any possible bribery at the acquired company and begin remediation efforts without fear of enforcement.

In his speech on Wednesday, Miner also sought to harmonize a guidance document from 2012 and the corporate enforcement policy regarding how the DOJ treats companies with FCPA risk stemming from an acquisition.

The corporate enforcement policy allows companies to presume that the DOJ will publicly decline to bring otherwise viable FCPA charges if the company self-discloses, cleans up its act, cooperates fully in the DOJ’s investigation and disgorges the profits that came from bribing foreign officials — as long as there aren’t aggravating factors like the involvement of high-level executives.

The DOJ’s 2012 FCPA resource guide told companies that they “may” see the DOJ decline to bring charges when they do adequate due diligence on another company before buying it but later find a corrupt practice, fix it and tell authorities.

Miner reassured companies in the speech that the DOJ will apply the enforcement policy with companies that find potential foreign bribery after a deal has closed. He said the government does not want to deter good corporate actors, who are perhaps in the best position to clean up problematic companies they buy, from doing those deals.

By Jody Godoy


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