U.S. Anti-Corruption Statute at Risk
In an effort to protect a landmark U.S. anti-bribery law from industry attack, EarthRights International and over 30 civil society organizations and socially responsible investors sent letters to all U.S. House and Senate members yesterday, urging them to reject proposals to amend and weaken the Foreign Corrupt Practices Act (FCPA). This letter was drafted in response to intense lobbying by the U.S. Chamber of Commerce, who reportedly spent $700,000 in 2011 in efforts to cut back on anti-bribery protections found in the law. Based on this intense lobbying effort, legislators on both sides of the aisle and in both Houses of Congress are considering introducing legislation that would restrict U.S. federal prosecutors’ ability to investigate and punish foreign bribery.
The legislators’ proposals range from the wholesale adoption of the Chamber’s proposals – which would shield companies from liability for the acts of their subsidiaries, allow the bribery of certain types of government agents, and reward willful ignorance of the law – to more modest amendments that would seek sharper, narrower definition of important terms and provide a minimum threshold under which bribery would not be prosecutable. Even these less extreme efforts, however, would open the FCPA to the unpredictable horse-trading of congressional politics and turn a sterling record of U.S. leadership in the global fight against corruption on its head. Most glaringly, none of the proposed amendments would, as their proponents suggest, provide greater legal certainty or cost savings to U.S. businesses. Instead, they would allow powerful corporate interests to hide behind legalistic distinctions and prevent the prosecution of egregious acts of foreign corruption.
Profs. David Kennedy and Dan Danielsen, the authors of a new report entitled Busting Bribery: Sustaining the Global Momentum of the Foreign Corrupt Practices Act, explain that the FCPA has played an important role in combatting bribery on a global scale and provided a level playing field for U.S. businesses. The authors show that Department of Justice exercises appropriate discretion according to a well-elaborated and clear set of guidelines when it decides how to handle a case and what kinds of penalties to seek. Its headline enforcement actions involve unambiguous, egregious instances of widespread bribery and are more often against foreign companies than domestic defendants. The Chamber's proposed amendments, far from being "modest" or aimed at "restoring the balance," would badly undercut anti-corruption enforcement efforts and provide what Prof. Danielsen called a "license to commit intentional acts of bribery."
Moreover, the proposed amendments provide standards that are no clearer than those currently in use. And they would not in any event help to streamline companies’ compliance programs, as stricter standards than the FCPA are already in place in other countries, like the United Kingdom, and compliance programs are generally geared toward the most exacting standards to which a company is subject.
Perhaps the greatest hope to avert these amendments is the announcement that the Department of Justice will issue further guidance on the FCPA later this year. It is not yet clear how this guidance is being compiled or what its contents will be, but this decision by the government may satisfy demands to clarify the statute and provide assistance on compliance, without taking the dangerous step of undermining the law through the legislative process.