"Declinations with Disgorgement" in FCPA Enforcement

Authors

Karen Woody, Kelley School of Business, Indiana University

Abstract

This Article addresses the recent pretrial diversion scheme undertaken by the Department of Justice in conjunction with its Foreign Corrupt Practices Act Pilot Program—specifically, “declinations with disgorgement.” Pursuant to the Pilot Program, the Department of Justice declined to prosecute or even continue an investigation, provided the company disgorge its alleged ill-gotten gains. This Article dissects both the purpose of, and terminology used in, declinations with disgorgement and argues that this novel and creative pretrial diversion is a dangerous conflation of legal remedial theories and terms. A criminal disposition cannot be a declination with attendant penalties because either illegal activity occurred or it did not; prosecutorial discretion does not allow an “in-between” option of declination while simultaneously requiring disgorgement. Calling these dispositions “declinations” and the penalties associated therewith “disgorgement” is a wild misuse of the terms, which creates a crisis in the expressive function of the Foreign Corrupt Practices Act and in the legal lexicon itself.

Recommended Citation

Karen Woody, "Declinations with Disgorgement" in FCPA Enforcement, 51 U. Mich. J. L. Reform 269 (2018).
Available at: https://repository.law.umich.edu/mjlr/vol51/iss2/1