The recent Scoular Company FCPA enforcement action was a “garden variety” enforcement action.
A company doing business in a foreign country had a point of contact with a “foreign official” in connection with some regulatory aspect of its business and a bribe was allegedly paid.
FCPA enforcement actions in connection with licenses, permits, inspections, customs, or other regulatory issues are very common including prior enforcement actions involving Mexico.
For instance, in 2023 Lifecore resolved an FCPA enforcement action in connection with wastewater discharge permits in Mexico.
In 2019, Walmart resolved an FCPA enforcement action in connection with license and permit issues in connection with its stores in Mexico.
In 2011, Tyson resolved an FCPA enforcement action focused on payments to Mexican veterinarians responsible for certifying product for export.
Even so, some are likely to suggest that the Scoular enforcement action represents something new – an FCPA enforcement action focused on cartel activity pursuant to recent DOJ policy that the DOJ’s FCPA Unit should “prioritize investigations related to foreign bribery that facilitates the criminal operations of cartels and transnational criminal organizations.”
It is true that the DOJ press release in the Scoular Company enforcement action does mention the “c” word (cartel).
Specifically, the DOJ stated:
“unbeknownst to the company or its employees, a portion of the bribes paid in connection with Scoular’s shipments benefited persons associated with the criminal operations of a cartel operating at the U.S.-Mexico border.”
However, there is no allegation about cartels in the actual Scoular information nor is there any allegation about cartels in prior DOJ charging documents against Carlos Leopoldo Alvelais (the third-party used to facilitate the bribery scheme).
This is perhaps not surprising as what a “foreign official” does with the money or thing of value received in connection with a bribery scheme (unless perhaps given to another foreign official with knowledge of the payor) is not of any legal relevance in an FCPA enforcement action.
In short, the Scoular enforcement action, based on conduct 7-13 years ago was a garden variety FCPA enforcement action.
That the DOJ dropped the “c” word into the press release likely for policy reasons – even though the term does not appear in any charging documents – does not make the Scoular new or special.
More broadly, query in how FCPA enforcement actions over the years involving conduct in Mexico and other Latin America countries could the DOJ – if it wanted to – dropped the “c” word into a press release?
The answer is likely quite a few.
