OFAC and Corporate America
For years, the Treasury Department’s Office of Foreign Assets Control (OFAC) has run a very active enforcement program against major American corporations accused of trading with statutory enemies of the United States.
For years, OFAC would call corporate lawyers into their offices, demand that the companies pay to the Treasury Department thousands of dollars to settle allegations of doing business with countries like Iran, Iraq, Libya or Cuba.
In exchange, OFAC did little to publicize the cases. One thing big corporations don’t want is adverse publicity – especially when it comes to doing business with statutory enemies of the United States. A white collar crime defense lawyer told Corporate Crime Reporter (a newsletter based in Washington, D.C.) that: “It is not a badge that any financial institution or others who are tagged by OFAC wear proudly. These are very serious statutes. No bank or other financial institution likes to have any publicity or press on an enforcement action. So the defense bar is generally very pleased when our clients don’t get press in this area.”
Last year, OFAC’s perverse protection racket came undone when Corporate Crime Reporter, (www.corporatecrimereporter.com) and Public Citizen filed a Freedom of Information Act lawsuit and demanded that Treasury release information concerning the enforcement cases. The litigation resulted in the release of a slew of enforcement memos detailing big named American companies like Goodyear Tire & Rubber, IKEA, CNA Insurance, Tyson Foods, and Boeing settling these cases. (The memos are posted at (http://www.treas.gov/foia/reading-room/docs/ofac-index.html) As a result of the litigation, OFAC also agreed to begin to release information about the cases as they were released, on a weekly basis. On February 4 and February 11, 2003, OFAC released information on 59 such cases, including ChevronTexaco in Iraq, the New York Yankees, Wal-Mart, ESPN, and Caterpillar trading with Cuba, and ExxonMobil and Wells Fargo trading with Sudan.
But the lists were buried in the bowels of Treasury’s web site. And there was only one antiseptic line for each case – no information on dates, skimpy information on allegations of wrongdoing – and no enforcement memos.
While there is an ongoing public policy debate about who exactly is an “enemy of the United States” and whether the sanctions that support the law actually work in achieving their desired ends, there is little debate that when the government enforces the law against major American corporations, the results should be given widespread publicity. Adverse publicity is one of the greatest deterrents against corporate crime and wrongdoing.
When the Justice Department brings criminal prosecutions against major American corporations, press releases are distributed widely.
And yet, for years, OFAC would enforce the laws against major American corporations for trading with statutory enemies of the United States and not make the results public.
OFAC should follow the example set by its sister agency, The Commerce Department’s Bureau of Industry and Security (BIS). BIS was formerly known as the Bureau of Export Administration.
BIS is in charge of administering export controls on goods and technology exported from the United States and that are controlled for the reason that they could be used in either commercial or military applications.
The former enforcement chief for BIS, explained her agency’s decision to publicize their settlements this way: “We posted our enforcement actions on our web site because there is a strong policy of letting the public know what you as enforcers are doing. We felt it was certainly in the public interest to release this information. And we also felt that it provided strong deterrence for the wrongdoers. And it provided guidelines for companies trying to comply, to understand what they could do to keep out of trouble.”
To deter future corporate wrongdoing, OFAC must stop protecting major American companies from adverse publicity. After all, sunlight is the best disinfectant.