As a follow-on to our September 17, 2009 post – The Latest FCPA Forecast From U.S. Regulators – Anne Richardson of TRACE shares some of the comments of Edward Cooper, the Program Manager for the International Corruption Unit at the FBI and a retired Special Agent. Mr. Cooper appeared on a government enforcement panel with Mark Mendelsohn of the DOJ and Cheryl Scarboro of the SEC at a conference in Washington last month.

“Mr. Cooper began his comments with an allusion to the 1974 film “Chinatown,” citing the conversation between Noah Cross (played by John Huston) and J.J. “Jake” Gittes (played by Jack Nicholson) over a breakfast of broiled fish at the Albacore Club. Trying to size up the police officer investigating the murder of his daughter’s husband, Cross asks Gittes whether the officer is a capable man, to which Gittes responds: “Very.” Cross then asks if the officer is honest, to which Gittes replies: “Far as it goes – of course he has to swim in the same water we all do.“

While we can debate whether or not Jake Gittes is cinema’s greatest postmodern hero, Mr. Cooper’s allusion in an FCPA conference is apt. What is not open to debate is the fact that today bribery is high on the agendas of governments, financial institutions and companies around the world. U.S. and international enforcement of foreign bribery laws is on the rise, as is the focus on corruption as the pivotal obstacle to economic development and political stabilization across the globe, from Afghanistan to Zimbabwe. While we may all swim in the same water, that water is shifting.

Public corruption in general is the highest priority of the Criminal Investigative Division at the FBI, according to Mr. Cooper. He described public corruption cases as the most sensitive, the most political, the longest running, and the hardest to provide. One must, after all, start by proving whether a crime was even committed. These difficulties are only amplified when the conduct occurs abroad.

Unlike most FBI criminal investigations, which are coordinated at the field office level, all FCPA investigations are initiated in Washington, DC and FBI investigators work closely with DOJ prosecutors throughout an investigation. Mr. Cooper recalled that his special agent training in 1980 included not a single reference to the FCPA. The water is different today. Last year, the FBI established a dedicated team of special agents in its Washington Field Office to work exclusively on FCPA cases and these agents undergo a specialized FCPA training course. The FBI has also created an International Contract Corruption Task Force, based in Washington, to focus on contract corruption and procurement fraud (particularly in Iraq, Kuwait, and Afghanistan).

So will this dedication of FBI resources mean that more FCPA violations will come to light through the use of sophisticated FBI investigative techniques, rather than through voluntary disclosures? Not yet, it appears, though we may be moving in that direction. Mr. Cooper estimated that about one-third of open FCPA cases were the result of companies’ self-reporting. The remaining two-thirds come from a variety of sources, including (i) informants; (ii) whistleblowers; (iii) disgruntled former employees; (iv) competitors; (v) other investigations; (vi) news media; and (vii) referrals from other U.S. and international agencies. He emphasized that cooperators in existing investigations are a very important source of information, as they are usually extremely motivated.

With newly committed resources and an energized FBI, there is little doubt about which direction FCPA enforcement is heading. The water in which we all swim is becoming less hospitable to the bribe-payers.”