Whenever I write about the corporate crime issues, many of those whose interest is flamed by the David versus Goliath fight of constitutional rights and the weak talking truth to power hit the back button on their browser as quickly as possible. They’re conflicted by whether their hate of the government is stronger than their hate of corporations. If there was a button for “a pox on both your houses,” they would be pounding it hard.

Just chill out, as there are significant parallels and lessons to be learned from how the Foreign Corrupt Practices Act (FCPA) has compelled multinational corporations to behave like sniveling sycophants at the beck and call of the government, and how this has empowered the Department of Justice to dictate its will to everyone.  I know, stories about the FCPA never involve a CEO’s face assaulting the boot of a federal agent, and there is rarely anyone to cheer for, but what happens to the most powerful tells much about what happens to the least.

From Joe Palazzolo at the Wall Street Journal Law Blog, an interview with “Nathaniel Edmonds, who recently left the Justice Department’s FCPA unit for Paul Hastings LLP.”

Though we don’t know how often it happens, the Justice Department sometimes  drops Foreign Corrupt Practices Act cases without bringing charges, even when prosecutors find potential violations of the law. Such an occasion is known within the agency as a “declination.”

See what they did there? This is the carrot, the velvet glove, the gold ring. Sometimes, somebody gets a declination. What a declination means is they dodged an “oh crap” bullet, saved an additional $57 million over the $12.5 million they paid so the government wouldn’t have to. Nobody knows whether they will get the gold ring, as  Ralph Lauren found out when it did everything on the check list given them by their Biglaw advisors, but as long as it’s there even if just out of reach.

And what’s Edmonds’ advice?

Mr. Edmonds, who was a supervisor in the FCPA unit, told Law Blog in an interview that there has never been a public instance of a company receiving a declination when the conduct in question was found independently by the Justice Department. In other words, a  company increases its chances of a declination geometrically by telling on itself.

For starters, Mr. Edmonds says in a new client alert , a company has to have a strong and nimble compliance program in place — one that evolves with best practices. It’s the best proof of a company’s commitment to the law, which bars bribery overseas.

With that foundation, what happens when a company finds a potential problem on its own?

Mr. Edmonds’s client alert is instructive here: stop the bribes, preserve the evidence and make sure the internal investigation is properly “scoped” — meaning that a company must rummage through the appropriate  business lines and subsidiaries, without straying too far or stopping short.

The TL;dr version, do the government’s investigation for it, confess but don’t overdo it, and pray the government loves you enough. After all, as Edmonds makes clear, the government never gives a pass to a corporation that didn’t confess.

Notice one notion wholly missing from this advice? It’s a notion that seems intuitive to individuals, but utterly foreign (get it?) to corporations, and certainly to the Department of Justice. It’s the notion that no crime was committed. It’s the notion that a multinational corporation would have the cajones to tell the baby prosecutors across the DoJ table that they don’t know squat and they have a fight on their hands.

The fist within the velvet glove, of course, can hit hard.

Given the pace of FCPA prosecutions in recent years, and the billions with a B in penalties assessed by the Justice Department and the Securities and Exchange Commission, [how to get a declination] is a question worth asking.

But then, getting a declination is akin to getting the cop who stomped your head to apologize and offer to pay for your date with his daughter. The real win is getting those billions with a B reduced to mere millions with an M. And that comes after the millions with an M have already been blown on the investigation by former DoJ lawyers now working at Biglaw as FCPA experts. Even then, nobody talks about the shock on the CEO’s, the COOs, the CFO’s or the 27 top EVP’s faces when they find themselves staring at the bottom of the bus.

But how could they? I gave this company my life and made them a fortune, and they sacrifice me at the first chance they get?  I thought they loved me?

It’s just business, baby. The government needs a sacrifice, and you’re the one. Take this one last bullet for the good of the company, and see you in 60 months.

But contrast the advice of Nathaniel Edmonds on how to increase your chances of getting a declination from 0.0% to 1.2% with the advice of “Tim Peterson (a former SEC enforcement attorney) and Robertson Park (a former DOJ enforcement attorney) in this article in Inside Counsel regarding voluntary disclosures” which appears in Mike Koehler’s great FCPA Professor blog :

Not all potential [FCPA] problems, however, are appropriate for disclosure. After investigation, allegations of misconduct may not result in a determination that illicit activity has occurred. Problematic payments may not be sufficiently material to amount to an FCPA violation…

Prematurely attracting the government’s attention may, as a practical matter, shift the burden to the company to prove the absence of a corruption problem. Enforcement officials may feel the need as a matter of basic human nature to seek some type of resolution to a case where they have invested significant time and effort. Companies need to weigh the potential benefits of cooperation against the significant costs of initiating a potentially unwarranted government investigation.

Could it be?  Is there room for actual thought, maybe even a bit of defiance, rather than baring your neck and handing the government the sharp teeth with which to rip it to shreds? 

Just so you don’t happen to miss it, there is one thread that follows through each of the voices opining on how to deal with the government, and it has something to do with where they spent their summers before joining Biglaw.  And if you wonder why no government prosecutor is impressed by an individual defendant’s challenge to “prove it,” consider that when it comes to the wealthiest, most powerful multinational corporations in the world, baby lawyers dictate to titans of industry how much of our money (because it ultimately comes from the pockets of consumers, you realize) they must happily shell out.

As for the individual executives of these huge and wealthy corporations, who would never commit a crime, are dedicated family folk and contribute regularly to charity, the Republican Party and the NRA, they make great cellmates at Club Fed.  Sure, they complain a bit and  sometimes write insightful letters (this link is definitely worth a read) about experiences they never expected to have, but they were always good company men, even on the sacrificial alter.