FCPA Self-Reporting Program Makes Headway, Justice Official Says
By Mengqi Sun
A U.S. Justice Department program that incentivizes companies to self-report foreign corruption is making headway as prosecutors look for ways to hold individuals accountable for wrongdoing, according to an official in the department's Foreign Corrupt Practices Act unit.
"Individual prosecutions remain our chief goal," Ephraim Wernick, assistant chief of the Justice Department's FCPA unit, said Tuesday at a New York event hosted by The Wall Street Journal and Dow Jones Risk & Compliance. "We do recognize that is the primary deterrent of misconduct, and we want to ensure that those who are actually committing the crimes are going be held accountable."
The Justice Department in 2016 launched a pilot program offering lenient penalties and limited prosecution to companies that reported wrongdoing under the FCPA, cooperated with government investigators, strengthened compliance practices and disgorged profits.
The program, which became policy in 2017, was an effort to unearth bribery violations prosecutors said were going unreported.
The Justice Department has publicized at least 12 FCPA-related cases that have resulted in prosecutors declining to charge companies that self-reported. Prosecutors charged 31 individuals for FCPA-related offenses in 2018, up from the previous record of 24 in 2017.
"Cognizant is a fantastic example of this," Mr. Wernick said.
Last month, two former Cognizant Technology Solutions Corp. executives were charged for allegedly approving illicit payments to help build a corporate campus in India. Lawyers for the executives have said they would fight the charges.
The company itself avoided criminal charges because it voluntarily disclosed the matter within two weeks of learning about it. The Teaneck, N.J., company agreed to pay $25 million in disgorgement and civil penalties to settle its role in the case with the Justice Department and the U.S. Securities and Exchange Commission.
The company's internal investigation, its cooperation with investigators and remediation, and the presence and effectiveness of Cognizant's pre-existing compliance program also played a role, prosecutors said in a letter to Cognizant's lawyers.
Cognizant didn't immediately respond to a request for comment Tuesday. The company's vice chairman and chief executive, Francisco D'Souza, said in a Feb. 15 statement that the company was grateful that the Justice Department recognized the company's effort in self-reporting and its cooperation with investigators.
"That's a real message that we're trying to send to the business community," Mr. Wernick said of the Cognizant case, "which is certainly cooperate, mediate, self-report and you'll be rewarded if you're trying to clean up your business yourself."
Write to Mengqi Sun at email@example.com
Corrections & Amplifications
This item was corrected at 7:34 p.m. ET to reflect that Francisco D'Souza is vice chairman and chief executive of Cognizant. The original version incorrectly said he was chairman and chief executive in the second-to-last paragraph.