Big news in the world of Foreign Corrupt Practices Act Enforcement! According to a report earlier this month in Bloomberg, the U.S. government’s investigation into allegations that Walmart’s subsidiaries abroad (particularly in Mexico, India, Brazil, and China) engaged in extensive bribery of public officials, is about to wrap up! “People familiar with the matter” report that the settlement is nearing finalization, and that Walmart will end up paying penalties that are much smaller than the U.S. government originally sought. All of us FCPA nerds should be on pins and needles awaiting the imminent announcement of the settlement, which should come out any day now…

… or maybe not. Maybe this time the news is for real, and we’re about to see a settlement announcement, in which case there will certainly be something important to write about. But at the moment, what I find more interesting is the succession of stories, spread out over a nearly two-year period, that suggested that a Walmart settlement was just around the corner. To recap:

• In October 2015, the Wall Street Journal reported that, according to unnamed “people familiar with the probe,” the Walmart matter was about to be wrapped up–and the fine was going to be much smaller than originally predicted, because it turned out (according to the WSJ’s sources) that the FCPA violations were not as serious or widespread as had been previously reported.
• Almost exactly one year later, in October 2016, Bloomberg reported (on the basis of conversations with “three people familiar with the matter”) that, contrary to the previous WSJ report, although the US government encountered difficulties making out the FCPA violations in Mexico (not so much because of lack of evidence of misconduct, but rather because the most egregious conduct was outside of the statute of limitations), the government had evidence of misconduct elsewhere, and was seeking a penalty of around $600 million. According to that report, Walmart was still resisting, but the report nonetheless indicated that the administration was “working to wrap up an agreement before a new administration takes over in January [2017].”
• Approximately nine months later, Bloomberg’s latest report states that, “according to people familiar with the matter,” Walmart is preparing to settle the case for $300 million – about half of what the government sought.

Now, though my initial reaction, given this history, is to take reports of imminent settlement with a grain of salt, I hasten to add that none of these reports are inconsistent with each other, or with the claim in the most recent report that a settlement announcement is imminent. Indeed, one could reconstruct roughly the following timeline of events, which I think is probably the best way to understand what’s going on:

• After the initial disclosures – including the high-profile New York Times pieces in 2012 about extensive bribery by Walmart’s Mexican subsidiary – the DOJ hoped to come down really hard on Walmart, partly because the FCPA violations seemed so egregious, and partly because, although Walmart did eventually self-disclose possible violations in 2011 (before the NYT stories broke), Walmart’s senior management allegedly found out about the problems as early as 2005 and didn’t really do anything to address them, let alone report to the government.
• However, after a few years of investigation, it became clear that much of the seemingly egregious conduct could not be charged because it occurred before the expiration of the statute of limitations, and unlike in other cases, there wasn’t enough evidence of an ongoing conspiracy or some other legal hook that the government could use to charge Walmart for the pre-2005 conduct. This led some people to jump to the conclusion that the investigation was about to wrap up, and a few of those people talked to WSJ reporters, leading to the 2015 story.
• But, those reports were premature: Although the government had trouble making out FCPA violations in Mexico based on the evidence it had, it did get evidence of FCPA violations elsewhere (especially in Brazil and India), and insisted on a $600 million penalty. Walmart balked, and the government indicated that it was therefore going to dig deeper – interviewing additional people in Mexico, for example. The government was hoping that this would additional pressure on Walmart, sufficient to induce a settlement closer to the government’s preferred number before January 2017. These were the events reported by Bloomberg in its 2016 story.
• But it didn’t work: Whatever investigation the government did, it must not have turned up enough evidence to compel Walmart to accept a penalty anywhere near the $600 million the government was asking for back in October 2016. Instead, in light of the evidence the DOJ turned up (or failed to turn up), the parties’ negotiations were converging on a substantially smaller figure, around $300 million. And that’s the most recent news reported by Bloomberg.

That’s my best guess about how we can account for the series of reports that all suggest that settlement negotiations are nearing completion, without actually yet seeing a settlement. But let me throw out a few other possibilities – entirely speculative, and probably less likely than the scenario sketched above, but nonetheless worth considering:

• First, the change in presidential administration may be having an impact on both the pace and the substance of the settlement negotiations. Although we haven’t yet seen any evidence that the Trump Administration as trying to squelch aggressive FCPA enforcement – and indeed his appointees have been making all the standard statements about the importance of the FCPA – it’s nonetheless possible that the new administration might be slowing things down, for one or both of two reasons: First, the Trump Administration has yet to fill numerous important positions at DOJ and SEC, and has generally been characterized by a great deal of chaos and confusion. The career staff who are handling Walmart might be understandably be reluctant to forge ahead with a major case like this when there’s such a leadership vacuum. Second, rightly or wrongly, Walmart might believe it will get more favorable treatment from the Trump Administration, and so is more willing to push back against a large settlement demand than would have been the case if someone else (like Barack Obama or Hillary Clinton) were president. That is, it’s possible that both the delay and the lower settlement figure is due less to the evidence that the DOJ uncovered and more to Walmart’s sense that its negotiation leverage has improved (and a corresponding sense among the DOJ career staff that their superiors might not back them up if they insist on dragging the case out longer in the hopes of compelling a higher settlement).
• Second, it’s possible (though I admit unlikely) that the DOJ decided to cut Walmart some slack on the penalty partly in recognition of the enormous sums that Walmart has already spent on the investigation (upwards of $800 million and counting, according to some reports). I say this is unlikely because, to the best of my knowledge, the DOJ doesn’t ordinarily do this. But it’s possible that this may be an unusual case, especially if Walmart, despite its earlier reported bad behavior, has been fully cooperative with the government’s investigation. Here it will be interesting to see how the settlement document, once it comes out, characterizes Walmart’s degree of cooperation and remediation. (It’s plausible that Walmart will get an F for its conduct in 2005-2006, and an A for its conduct post-2012.)
• Third, we should always keep in mind the possibility that “sources familiar with the matter” are not as familiar is they think they are, and that what may seem to some observers like the last stages of an FCPA settlement negotiation can last much longer than one might think. That’s one of the reasons I’m not holding my breath for an announcement of a final Walmart settlement. Sure, it might appear tomorrow, or in the next few days or weeks. But I won’t exactly be shocked if six more months pass and the matter is still not concluded.