In early August, the New York Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating JPMorgan Chase related to alleged violations of the Foreign Corrupt Practices Act (FCPA) in China.  According to the article, the press had not previously reported on the investigation, and the Times knowledge of it was based on a “confidential United States government document.”  The article generated a number of similar news reports.

This is not the first time the media has hopped on the FCPA bandwagon following a juicy story about alleged bribery.  For example, in 2012 and again this year, the New Yorker ran feature articles on alleged corruption in the Macau gambling industry and the Guinean mining industry.  And reports by the Wall Street Journal and other sources, both inside and outside the United States, brought into focus the alleged bribery payments arising from the News Corp phone hacking scandal in the United Kingdom.

The increase in feature reporting on the FCPA makes some sense: stories typically involve racy factual underpinnings, exotic locations, multi-national companies and crooked governments.   Nonetheless, the FCPA may have been underreported in the mainstream press, even as it was being vigorously enforced by the SEC and Department of Justice.

As the press catches up to enforcement, it appears that the stories themselves may in turn have ramifications for the enforcement environment.  One result of more prominent news coverage may be increased pressure on the U.S. government to prosecute alleged FCPA violations.  While it is possible that a news story could trigger a new investigation, coverage of an ongoing investigation would seem to increase scrutiny on it, thereby inciting the government to investigate more thoroughly than might otherwise be the case, or to push harder against potential procedural hurdles like jurisdiction or the statute of limitations.  Given the high cost that has come to be associated with defending against enforcement actions, this type of pressure could lead to major expenditures by companies.  Indeed, some FCPA investigations have reportedly led to $100 million or more in attorneys’ fees.

The FCPA’s heightened visibility in the mainstream press thus brings into relief an issue with which companies need to be particularly aware: bad press.  In fact, the more negative press that accumulates with respect to a particular company and/or allegation, the worse the ramifications for the company.  Investors may start to abandon the company, management changes or other dramatic action may be taken to demonstrate the company’s commitment to addressing perceived problems, and the company may ultimately be more willing to settle the matter on the government’s terms to make the issue go away.

Companies can help protect against violations – and the adverse PR that may come with violations or even allegations of violations – by implementing comprehensive anti-corruption programs.  In addition, companies must foster a “tone from the top” that stresses compliance with anti-corruption laws and open communication about suspected violations.  Potential whistleblowers must feel secure and appreciated for coming forward to report allegations internally, so they are less inclined to report the allegations externally.  In other words, companies that do not want to air their dirty laundry had better keep a clean house.