Investigations to watch in a second term

Nov 09 2012, 01:35 IST
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SummaryThe push against overseas bribery has now been extended into industries that traditionally were not involved in US corruption investigations, like pharma companies.


In any election, new politics and policies are often debated in much detail. The impact of the presidential election on law enforcement will be more subtle, however, especially after there was little discussion about policing the markets during the campaign. The re-election of President Obama will result in less drastic changes than if Mitt Romney had won, but there will be turnover at several agencies. In addition, there is an inevitable reshuffling of positions as some senior law enforcement officials switch to lucrative posts in the private sector. This comes as law firms will happily pay top dollar for the access and credibility that a former official can bring.

A change in leadership at any given agency often has little effect, at least in the short term, on the day-to-day work in investigations and prosecutions. For example, the wide-ranging investigation of hedge funds that led to the conviction of Raj Rajaratnam, Rajat Gupta and a host of others for insider trading began under the Bush administration and came to fruition in October 2009. The change in the Justice Department leadership had no appreciable impact on the investigation.

I doubt there will be any new, sweeping investigations or legislation involving white-collar crime in the Presidents second term, barring another economic cataclysm or a hidden corporate fraud. Nevertheless, there are three topics I expect that the administration may address, or be forced to address, in the coming four years:

Foreign bribery

In a speech the day before the election, Lanny A Breuer, the head of the Justice Departments criminal division, said that the vigorous enforcement of the Foreign Corrupt Practices Act has been a signature achievement of the Obama administration. The government has aggressively pursued a number of cases, particularly against foreign companies, over paying bribes to government officials to obtain business in their countries.

Much like the insider trading investigations, the push against overseas bribery began under President George W Bush, but the Justice Department has made this a featured player in its corporate law enforcement efforts. More investigations are being pursued in industries that traditionally were not involved in corruption investigations, like pharmaceutical companies.

That aggressive approach seems to have ensnared a global bank. Barclays recently disclosed that the Justice Department and the Securities and Exchange Commission are looking at payments made in connection with securing a large capital infusion from Qatars investment fund in 2008. A number of government funds made investments during

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