Regulatory: Understanding the “carbon copy prosecution”

Compliance challenges multiply as the world contracts

At the risk of stating the obvious, no company or individual wants to find itself under investigation by U.S. or foreign authorities. A mindset of “getting it wrapped up” naturally assumes top priority status for in-house counsel overseeing any such official inquiry and charged with cabining the inquiry’s business-disrupting impact. In-house and outside counsel, therefore, understandably breathe a sigh of relief when the end appears to be in sight, that is, when (best case scenario) the authorities opt to drop the investigation or when (more likely) the parties ink a non-prosecution agreement (NPA), deferred prosecution agreement (DPA) or old fashioned plea agreement. After all, when the costly ordeal is finally over, isn’t it time to celebrate?

Time to bid adieu to the days of one-dimensional government investigations?

A carbon copy case study

A tangible and arguably the most well-known example of this phenomenon comes courtesy of oilfield services giant the Halliburton Company. In 2009, Halliburton paid U.S. authorities $579 million to settle an international bribery investigation into its Nigerian contracts. But not long afterwards, in 2010, Nigerian anti-corruption authorities filed criminal charges against Halliburton, other companies and many of their executives for the same conduct that had been part of the U.S. criminal and administrative resolutions. Halliburton swiftly settled the Nigerian case (after Nigerian authorities sought extradition of Vice President Richard Cheney), but this example clearly demonstrates the potential risk a company and its executives face in multi-border investigations: that another country will initiate prosecutions based on the facts and admissions from the U.S. matter.

Contributing Author

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T. Markus Funk

T. Markus Funk is a White Collar Defense and Internal Investigations partner at Perkins Coie, where he co-heads the firm’s Corporate Social Responsibility...

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Contributing Author

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Elizabeth Banzhoff

Elizabeth M. Banzhoff is an associate at Perkins Coie in Denver. She previously served as a law clerk to Judge Richard Smoak, U.S. District Court...

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