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Harry Cassin
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Andy Spalding
Senior Editor

Jessica Tillipman
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Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Shruti J. Shah
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

Let’s Keep Talking

On Tuesday, Assistant Attorney General Lanny Breuer, left, acknowledged the growing debate about the FCPA. Although he said the DOJ is listening, his message was loud and clear: When it comes to enforcement, damn the torpedoes, full speed ahead.

That’s his right and perhaps his proper role. After all, Congress created the FCPA, the courts are supposed to interpret it, and it’s up to the DOJ to enforce it.

But no one should be surprised the FCPA is on the radar. In 2004, Mr. Breuer said, two individuals were charged under the FCPA and criminal fines collected that year were around $11 million. In 2009 and 2010, over 50 individuals have been charged, 35 await trial, and nearly $2 billion in fines have been collected.

So the debate about the FCPA is natural and healthy, and it isn’t going away any time soon. It’s also guaranteed to trigger a lot of emotion. A look at a small sample of the arguments shows why:

First, some will equate criticism of the FCPA with support for bribery. That’s hogwash. Bribery is always bad (which is why the U.S. government shouldn’t be doing it) and enforcement is a good thing. But where the rule of law prevails, people subject to the law have the privilege and obligation to test it, and to try to make it better.

Second, uncertainty about the FCPA — what it means and how it’s enforced — really is bad for business. Sure, bribery is bad for business too. But uncertainty about the meaning of “foreign official” or how the promotional expenses defense is supposed to work doesn’t help anyone. Nor does hyper-compliant behavior induced by fear of arbitrary enforcement.

Third, unless our courts start reviewing corporate FCPA cases, questions about interpretation and enforcement decisions will multiple. Over time, the uncertainty will increase, and respect for the law and those who enforce it will ultimately be harmed.

Fourth, respondeat superior is the primary reason why problems with the FCPA can’t be fixed, at least not easily. Imputing an employee’s guilt to his or her employer removes the courts from the enforcement process. Without judicial review, the DOJ becomes prosecutor, judge, and jury. That’s not the way our criminal justice system is supposed to work.

And fifth, the debate about FCPA enforcement ultimately leads to questions about American exceptionalism. That’s a complicated, emotional topic. Is this country automatically entitled to lead the world’s battle against international graft? Or has our own behavior rendered us unfit? Our role in triggering the Great Recession, the Madoff scandal, the CIA’s black money ops — does all the lawlessness disqualify us from the global anti-corruption pulpit?

There’s no doubt graft cripples and kills it victims. It’s one of the great evils we inflict on each other. That’s why we need to fight against it with the best weapons we can fashion.

Ignoring criticism of the FCPA now, however — not fixing what may be broken — will eventually weaken the law and those who oppose public bribery. That’s why this debate is so important.

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2 Comments

  1. From over here in Europe, weakening FCPA would weaken many international efforts to get to grips with graft. I am not subservient in any way to the US, but you ought to be aware that the US often, especially in legal matters, sets a good example, especially in regard to corporations and powerful individuals. The UK's Anti-Bribery Act may not have come to be without the example of FCPA. There are many corrupt Africa leaders and businesmen who are in terror of FCPA. Refine it, by all means, but please do not weaken it. If you care about the US' image in the world, and its capacity for moral leadership, do not weaken this law.

  2. Here in Italy, where the shame is becoming an optional, classified at the level of Croatia for the level of corruption in last Transparency International, the US Corporations are doing a huge amount of business, abusing of weaken legislations, encouraging the lobby, mainly in defense and energy sector. Refining FCPA would be really effective, adopting also the new technologies, but weakening would spread the window dressed scheme.


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