The Department of Justice (DOJ) is no longer requiring independent monitoring of the global mining and energy trading behemoth Glencore, suddenly ending the monitorship terms of two different attorneys. This is a requirement included in a billion-dollar Foreign Corrupt Practices Act (FCPA) and market manipulation settlement.

DOJ attorneys stated in court documents last month that they were using their “sole discretion” under a plea agreement with Glencore to “terminate the monitorship early, effective today,” after “having assessed the facts and circumstances.”

The original DOJ settlement with the Switzerland-headquartered and UK-incorporated natural resources company came in May 2022. The company also settled similar allegations with the Commodity Futures Trading Commission and reached deals with respective authorities in the UK and Brazil.

Criminal and civil penalties

At that time, Glencore had to pay over $1.1 billion in criminal and civil penalties enforcement action to resolve the charges which revolved around misconduct occurring in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea, Brazil, Venezuela, and the Democratic Republic of Congo.

As a condition of settlement, Glencore agreed to retain a compliance monitor for a three year period. The monitorships, overseen by Alex Rene, a partner at the law firm Ropes & Gray, and Katya Jestin, co-managing partner at Jenner & Block, were originally set for three years.

Glencore had agreed to pay the penalties in 2022 for violating foreign corruption laws and manipulating oil prices. The plea agreement said the monitors must evaluate the effectiveness of Glencore’s compliance efforts as well as its internal accounting controls, recordkeeping practices, and financial reporting policies and procedures, among other things.

Charles Watenphul, Glencore’s head of corporate communications, said in a statement about the abrupt end of the monitorships: “The company has engaged constructively with the monitors and made significant progress over the last two years in enhancing our compliance program. The company is pleased that the US Department of Justice has recognized these efforts and terminated the monitorships earlier than scheduled.”

Context

Last month, President Trump issued a directive pausing enforcement of the FCPA for at least 180 days. In the wake of that order, filing deadlines and trial dates have been pushed back in a handful of pending FCPA prosecutions while the DOJ reviews those cases.

Neither President Trump or the acting chair of the SEC, Mark Uyeda, have said anything about suspending the SEC’s civil enforcement of the FCPA.

And in February, Attorney General Pam Bondi issued a memo to note the agency’s streamlining of its focus for DOJ prosecutors’ handling FCPA cases to those involving organized crime networks, such as those that involve bribery of foreign officials to facilitate human smuggling and the trafficking of narcotics and firearms.

The law firms that employ the two monitors are the subjects of some news coverage right now, along with several others.

Law firms targeted

Last month, Trump issued an executive order targeting Jenner & Block, based in Chicago. The order instructs officials to review and revoke firm members’ security clearance, terminate any government contracts that may exist with the law firm, and not hire any employees of the firm for any future federal government jobs, among other things.

That firm has sued his administration to block the executive order, claiming it is causing “escalating and irreparable harm” to its business and threatening First Amendment rights nationwide.

Trump’s executive order against Jenner & Block also singles out attorney Andrew Weissman, who worked on Robert Mueller’s investigation into Russian interference in the 2016 election. The executive order says he was re-hired at Jenner & Block, but the firm has since clarified that Weissman hasn’t worked there since 2021. 

And the law firm Ropes & Gray, where Rene works, has received a letter (along with several other prominent law firms) from the US Equal Employment Opportunity Commission that said Trump was concerned that some of the firms’ employment practices might violate civil rights laws.

Serious allegations

In the 2022 foreign bribery case, Glencore International and its subsidiaries were charged with bribing corrupt intermediaries and foreign officials from seven countries (at two of the busiest commercial shipping ports in the US – Los Angeles and Houston) for over a decade.

In the commodity price manipulation scheme, charged alongside the foreign bribery one, the DOJ and CFTC alleged that subsidiary Glencore Ltd undermined public confidence by creating the false appearance of supply and demand to manipulate oil prices. The DOJ noted that the alleged violations involved both high-level employees and agents of the company.

The penalty was steep and the charges involved noteworthy lapses of compliance program effectiveness.

In its settlement announcement, DOJ said Glencore did not receive full credit for cooperation and remediation, because it did not consistently demonstrate a commitment to full cooperation, was delayed in producing relevant evidence, and did not timely and appropriately remediate with respect to disciplining certain employees involved in the misconduct.

Independent monitor

“Although Glencore has taken remedial measures, some of the compliance enhancements are new and have not been fully implemented or tested to demonstrate that they would prevent and detect similar misconduct in the future, necessitating the imposition of an independent compliance monitor for a term of three years,” the agency stated at the time.

In the CFTC action, the regulator noted that Glencore employees submitted a significant number of false bids during a pricing window under a contract, noting there was significant time to spot and unwind the illegal activity by any number of firm traders and other employees.

DOJ further stated that its investigation showed that Glencore paid bribes to avoid government audits and bribed judges to make lawsuits disappear.

This is all to say that the imposition of two monitors was not a settlement term just tossed into the mix for no good reason; the DOJ and CFTC had many reasons to believe the compliance program; the company’s surveillance over its processes, money and employees; and members of its leadership were not fully up to the task of creating an effective anti-corruption/anti-bribery program.

In sum, the reason behind the settlement tool was there, the two monitors had likely made significant progress in their remediation work already, and there is nothing (yet) to suggest the Trump administration is fully tossing the idea of imposing compliance monitors aside.

And as noted on GRIP, the Trump executive order pausing enforcement of the FCPA certainly does not repeal the decades-old law, since it’s an act of Congress and thereby remains binding law until that branch of government acts, and there is a five-year statute of limitations in which to bring actions under it.