DOJ Focus on China: “Is This a Weaponizing of the FCPA?” – Kathleen Hamann Quoted in Global Investigations Review

As the Trump administration moves to counter economic threats from China, the Department of Justice has a new enforcement initiative to more aggressively use the Foreign Corrupt Practices Act (FCPA) against Chinese companies.

Some corporate defense lawyers see this new initiative as a “controversial step toward selective prosecution,” and are questioning this policy that seems to use the FCPA as a political tool to protect US trade and corporate interests abroad. DOJ prosecutors have dismissed the notion, saying they “only bring cases based on the evidence.”

Some lawyers are concerned about the DOJ “cherry-picking” its cases according to the location of the alleged perpetrator, and linking national security to decisions as to whether to prosecute financial crime.

Pierce Atwood litigation partner and former FCPA prosecutor Kathleen Hamann asked, “How is this not selective prosecution?” In her ten years working for the State Department, Kathleen noted that her unit could always assert that “nationality was not a factor” in the cases it brought. But now, she believes that the government could open itself up to “allegations that it is unfairly targeting Chinese individuals and companies.”

So why would the government bring financial crime cases against suspected foreign agents? Critics of this approach say that it looks more legitimate to use the FCPA as an opening to “bring a case against a national security concern.”

Kate Hamann added, “When you’re talking about a company or an individual that regularly interacts with senior government officials, then it’s almost hard for the bribery issue not to have a national security angle. From a purely foreign relations standpoint, a financial crime prosecution appears less political than an intelligence prosecution.”

The complete article by Clara Hudson appears in the December 20, 2018 issue of Global Investigations Review.