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In 1977, President Carter signed the Foreign Corrupt Practices Act (FCPA) into law to outlaw the bribery of foreign government officials by the private sector. And then ... nothing happened. Not for a while, anyway. The government brought cases here and there, but the statute effectively lay dormant for years. After three-and-a-half decades and several expansions, that of course has changed.
Self-Reporting and the SEC
When a company uncovers a potential FCPA violation, the decision of whether to self-report can be fraught. Many decide that self-reporting is the best way to mitigate any damage, but in recent years, the pendulum has swung the other way. Many companies are unsure of whether they would get credit sufficient enough to report a potential violation that authorities might never discover on their own. And then there is the issue of the SEC.
A Debated Definition
Joel Esquenazi is the former president of Terra Telecommunications Corp. He was convicted along with another former Terra executive of FCPA violations stemming from payments from Terra to Haiti Teleco, which Haiti’s national bank owned shares in and for which the Haitian government appointed board members and directors. In October 2011, Esquenazi received a 15-year sentence, the longest a court has ever given an individual in a case involving FCPA violations. The other executive, Carlos Rodriguez, received a seven-year sentence, and seven other individuals charged in the case pleaded guilty. Esquenazi and Rodriguez are challenging the way the government defined a foreign official in their cases in appeals currently pending before the 11th Circuit, which recently delayed oral arguments in the appeals until this summer.