John Davis Quoted on Glencore Restitution Order in Anti-Corruption Report
"Lessons from Glencore's $29.6 Million Restitution Order"
In discussing the Glencore restitution order with Anti-Corruption Report, John Davis said the company had little maneuvering space in the 2023 restitution proceeding because its "arguments were hobbled in part by its own admissions in the FCPA plea." Davis provided some takeaways for defense counsel representing companies in similar situations. "While the evidence here did not favor Glencore, its legal and factual arguments as to causation, concreteness of measurable harm, and related issues are the types of arguments that defendants should consider in other cases, where the evidence may differ from this case," he said. "Defendants should also argue, as Glencore did here successfully, against the granting of certain types of monies that are not covered by restitution, such as attorneys' fees related to the contract claim." Davis said that defendants should also consider arguments against claimants' double recovery of damages, as Glencore was able to do in this case to some success. "Such arguments should consider other U.S. claims as well as international claims that could cover the same activities."
Davis said there were some specific factors that helped the claimant in this case. "First, the Glencore FCPA disposition was through a guilty plea, under which Glencore admitted to the commission of a crime. Most corporate FCPA matters are resolved through frameworks under which companies are not required to make definitive statements as to their guilt. SEC matters are routinely resolved via orders under which companies neither affirm nor deny the alleged facts." He noted that corporate DPAs and NPAs, the most commonly used form of FCPA corporate settlements, do not definitively state that crimes were committed or admitted by the company. "Guilty pleas, or convictions at trial, are a necessary element for MVRA/CVRA claims to advance, but such pleas or convictions are still rare in the FCPA area – certainly for corporate entities," he said.
In the end, deterring restitution claims is one of many reasons that companies will want to continue to argue against a case disposition that results in a criminal plea, Davis said.