This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.
The difference between the almost right word and the right word is really a large matter–it’s the difference between the lightning bug and the lightning — Mark Twain (1888).
It is hard to understand why there are still advocates for an FCPA compliance defense. The issue is dead and gone, and is unlikely to come back in any form. I guess these are people who enjoy “zombie” movies – for the life of me, I cannot understand the fascination with “zombies,” aside from the classic, Night of the Living Dead.
The advocates of the FCPA compliance defense, including my good friend and colleague, the FCPA Professor, cite each other and law firm articles to support their claims. They trumpet the latest FCPA enforcement transgression, and then renew their call for a compliance defense. Unfortunately, they continue to use the obvious, but unsubstantiated, claim that an FCPA compliance defense would necessarily increase the amount and quality of company compliance programs.
I am not writing this post to challenge that assumption. There is a bigger issue that the advocates, including my good friend and colleague, the FCPA Professor, continue to ignore.
How would the compliance defense work in practice?
No one has answered this basic question. The Justice Department and Congressional legislators need to know the answer to this question. Until an explanation is provided, there is no chance – and I mean no chance – that an FCPA compliance defense will ever be enacted, nor will DOJ adopt such a policy in its enforcement decisions.
Let’s examine the issue. First and most significantly, companies cannot afford (rightly or wrongly) to go to trial and require the government to satisfy its burden of proof. As a result, companies almost uniformly resolve their cases pre-indictment. A compliance defense, if authorized, would allow a company to argue against a proposed settlement by citing evidence of its compliance program. That already occurs in the context of settlement negotiations and remediation requirements in any settlement. The existence of a compliance defense will have little impact (if any) on these negotiations, because companies do not plan to go to trial and will not go to trial even with the availability of a compliance defense.
Second, advocates for a compliance defense suggest that the defense should be added to the FCPA statute or, even more dangerously, have argued that the compliance defense should be added as an element of the FCPA offense, thereby requiring the government to prove a negative – that the company did not have an adequate compliance program. Talk about convoluted. There is not one criminal offense that requires proof beyond a reasonable doubt of a negative (aside from a regulatory crime where a defendant does not have requisite license).
Do companies really want the DOJ to conduct grand jury investigations of their entire anti-corruption compliance program?
Can you imagine the practical issues that would arise when compliance programs are subject to DOJ investigations and protecting the company from other enforcement actions?
Companies will rue the day they bought on to this silly idea – and re-examine their priorities. They will long for the old days, when a compliance program was designed to detect and prevent an FCPA violation, and the company can argue and cite its program as a reason to decline prosecution of an FCPA violation.
Good ideas gain support through education and dialogue. The FCPA compliance defense has been the exact opposite – the more it is discussed, the more light that is shed on the issue, the less traction and support for the idea.
Michael Volkov is the CEO of The Volkov Law Group LLC, where he provides compliance, internal investigation and white collar defense services. He can be reached at 
