A Record Of Reform

In September 1977, the U.S. House of Representatives finished debating a bill designated as H.R. 3815. Its working title was the Unlawful Corporate Payments Act of 1977, or UCPA. The bill was a response to a huge scandal. As the record of the House debate explained:

“More than 400 corporations have admitted making questionable or illegal payments. The companies, most of them voluntarily, have reported paying out well in excess of $300 million in corporate funds to foreign government officials, politicians, and political parties. These corporations have included some of the largest and most widely held public companies in the United States; over 117 of them rank in the top Fortune 500 industries. The abuses disclosed run the gamut from bribery of high foreign officials in order to secure some type of favorable action by a foreign government to so-called facilitating payments that allegedly were made to ensure that government functionaries discharge certain ministrial [sic] or clerical duties. Sectors of industry typically involved are: drugs and health care; oil and gas production and services; food products; aerospace, airlines and air services; and chemicals.”

But did the scandal really matter? Should Americans have cared about bribery abroad? The House of Representatives thought so. It listed about a dozen reasons in this little statement of purpose that’s also part of the legislative record:

The payment of bribes to influence the acts or decisions of foreign officials, foreign political parties or candidates for foreign political office is unethical. It is counter to the moral expectations and values of the American public. But not only is it unethical, it is bad business as well. It erodes public confidence in the integrity of the free market system. It short-circuits the marketplace by directing business to those companies too inefficient to compete in terms of price, quality or service, or too lazy to engage in honest salesmanship, or too intent upon unloading marginal products. In short, it rewards corruption instead of efficiency and puts pressure on ethical enterprises to lower their standards or risk losing business. Bribery of foreign officials by some American companies casts a shadow on all U.S. companies. The exposure of such activity can damage a company’s image, lead to costly lawsuits, cause the cancellation of contracts, and result in the appropriation of valuable assets overseas.

After 32 years, there’s nothing there that’s out of date. Bribery is still — and always has been — the wrong way around. It spreads weakness everywhere. Like cheating in sports, it produces no winners and lots of losers — the players involved, their teams, the team owners, the league, the sponsors and fans. It’s all bad. That’s why the bill to enact the UCPA was important in September 1977. And why the law it became — the Foreign Corrupt Practices Act — is important today.

Download a copy of House Report No. 95-640 (September 28, 1977) here.
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