Bruce Hinchey, an attorney completing an LLM in government contracts law at George Washington University Law School, analyzed 40 FCPA cases from 2002 through 2009. He looked at the mathematical relationship between the bribes and the fines, differentiating between the companies that voluntarily disclosed their violations and those that did not.
Hinchey’s study and the results are detailed in his paper “Punishing the Penitent: Disproportionate Fines in Recent FCPA Enforcements and Suggested Improvements.” His conclusion is that there was no apparent benefit to voluntary disclosure. He found that companies that disclosed an FCPA violation were given a fine of $4.53 for every dollar given as a bribe. Those that did not voluntarily disclose their violation got smaller fines of $3.22 for every dollar given as a bribe.
The companies in this study that did not disclose their FCPA violations paid lower fines than those that did participate in voluntary disclosure. The obvious conclusion is that companies may be better off not voluntarily disclosing their FCPA violations, even though government officials tout mitigation of punishment when companies self-report.
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