A powerful, detailed rebuttal to the U.S. Chamber of Commerce’s proposals to amend the U.S. FCPA launched this month. Professorial powerhouses David Kennedy (Harvard Law School) and Dan Danielsen (Northeastern School of Law) issued their 84 page analysis, Busting Bribery: Sustaining the Global Momentum of the Foreign Corrupt Practices Act.
“At no time since the passage of the FCPA has global [anti-bribery] support …been as strong. This is not the time to turn back.” (p. 5. Also see table of global laws p. 21.) Their primary thesis is that the Chamber’s proposals would create massive loopholes, setting back decades of global anti-bribery progress, signaling that the U.S. commitment to bribery reform is wavering just as the rest of the world is beginning to take effective measures against corruption. (p. 27 – 28)
The Chamber’s 6 proposals are analyzed in depth, complete with detailed rebuttals and ample citations. Allegations of prosecutorial overreach are deemed speculative (p. 28), chimerical (p. 29) and supported by no actual evidence (p. 28). Busting Bribery rebuts allegations of excessive fines, showing that average fines have remained stable over the last decade with the exceptions of the Siemens and Halliburton cases (p. 15). Claims that U.S. corporations are victims of excessive prosecutorial zeal are rebutted by evidence that 8 out of the top 10 FCPA settlements were against foreign corporations (Table, p. 12) accounting for 80% of the penalties. (p. 25)
Claims by the Chamber that the FCPA is overly strict as compared to other anti-bribery laws, particularly the new U.K. Bribery Act, are also very thoroughly examined. “..our FCPA is no longer the most restrictive national statute. Indeed, the only point on which the FCPA is broader that the OECD Convention is its inclusion of corrupt payments made to candidates for office or to political parties.” (p. 23)
In fact, the U.K. law is substantially more rigorous as well as broader in coverage than the FCPA. The U.K. law criminalizes receiving bribes (as well as paying bribes), criminalizes bribery to private parties (as well as public officials), and has no exception for facilitation payments, promotional or hospitality expenses. (p. 23 – 24).
The much ballyhooed compliance defense under the U.K. law should not be incorporated in the FCPA, according to the Busting Bribery report. Under the U.K. act, “…the affirmative defense of ‘adequate’ compliance procedures is only available with respect to a new and very broad strict criminal liability offense…” (p. 31). The FCPA does not currently have strict liability for bribery offenses, instead requiring proof of mens rea. Busting Bribery has a thorough discussion of the various mens rea requirements under current FCPA law at pages 38 – 42. “Any compliance program that knowingly permitted…or turned a blind eye to corrupt, intentional violations of the FCPA must be either per se inadequate or not undertaken in good faith.” (p. 30). The U.K. act does not provide a compliance affirmative defense for those offenses which include a mens rea requirement equivalent to the FCPA. (p. 31). Furthermore the U.S. FCPA already factors in good compliance programs at every stage, from investigations through the Sentencing Guidelines. (p. 29 – 33)
Busting Bribery takes on the Chamber’s proposal at every level from parsing the most technical legal analysis to challenging the Chamber’s hyperbole based on exaggerated evidence. Kennedy and Danielsen are both very serious long established legal scholars with impressive analytical horsepower. This is going to be quite a show. Game On.
Elizabeth K. Spahn is a professor at New England Law Boston, where she’s been on the faculty since 1978. She spent eighteen months as a Fulbright professor at Peking University Law School and the Beijing Foreign Studies University in China during 1999–2000. In 2005, she received a Fulbright senior specialist grant to lecture in Chongqing, China. She has written on international bribery, corruption, and money laundering, international women’s issues, and the development of Chinese law. She attended the United Nations Population Conference in Cairo, Egypt, in 1994 and represented the Feminist Majority Foundation at the United Nations Fourth World Conference on Women in Beijing, China, in 1995. Professor Spahn can be contacted here.