On May 10, 2011, a jury verdict in the U.S. District Court for the Central District of California made California-based Lindsey Manufacturing Company the first company ever to be criminally convicted of violating the U.S. Foreign Corrupt Practices Act (FCPA).1 In a press statement, the Assistant Attorney General Lanny Breuer of the U.S. Department of Justice's (DOJ's) Criminal Division stated that ''Lindsey Manufacturing is the first company to be tried and convicted on FCPA violations, but it will not be the last.''
Understanding what led to the first ever criminal conviction of a corporation in the history of a law that is over thirty years old may add to attorneys' understanding of the current and evolving risks their clients face under the FCPA and how best to mitigate those risks. Neither has there been any recent change to U.S. law nor have U.S. authorities announced any official changes to enforcement policy. However, enforcement of anti-bribery laws in the United States, as well as in other jurisdictions, has become more aggressive and widespread. Increasingly aggressive enforcement also has intensified doubts about the value to corporations of cooperation with the U.S. and other enforcement authorities during FCPA investigations.
This evolution of the enforcement landscape seems likely to have contributed to the Lindsey decision to defend against anti-bribery charges, and the conviction may in turn shift companies' calculation as to the benefits of cooperation. Companies worldwide have been watching the Lindsey trial closely and now await the sentence, as a gauge of what outcome may await other companies that choose to fight the U.S. Government in an FCPA case. However, the Lindsey conviction may not necessarily spur greater cooperation with enforcement authorities if current aggressive enforcement trends continue and the benefits of cooperation are sufficiently dubious. Regardless of the final outcome in Lindsey, now more than ever, clients should appreciate the value and importance of implementing an effective FCPA compliance program, as U.S. authorities have now amply demonstrated that they are willing and able to criminally prosecute uncooperative companies under the FCPA.Global Trade and Customs Journal