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Harry Cassin
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9/11 And The FCPA

What happened that day a decade ago changed the way the world looks at corruption.

The tracks of the 9/11 perpetrators and those who helped them led back to corrupt third-world countries — Afghanistan, Sudan, Somalia, Yemen, and others. Those regimes had leaky borders, weak passport control, unreliable law enforcement agencies, poor anti-money laundering programs — just what the bad guys needed.

That led then President George W. Bush to ramp up enforcement. He signed into law Presidential Proclamation 7750. It protects democratic institutions and national security by banning from the U.S. foreign kleptocrats and their family members and friends involved with corruption or benefitting from it.

The policy review had taken a few years — it was August 2004 when Proclamation 7750 became law.

Around the same time, FCPA enforcement went into high gear. As the Wall Street Journal said a week ago, the DOJ brought 24 enforcement actions in 2010, up from five in 2004. Penalties increased from about $11 million in 2004 to nearly $2 billion in fiscal 2009 and 2010 combined.

What now? There’s no turning back.

The Obama Administration’s emphasis on enforcement in its May 2010 National Security Strategy can be traced straight back to 9/11. Other parts of the government — the State Department, the IRS, Homeland Security, Immigration and Customs Enforcement — have responded with their own anti-graft initiatives, either alone or with inter-agency task forces headed by the DOJ.

The Western democracies and developed economies now understand the risks. That’s partly why Britain adopted the Bribery Act, why Canada is now enforcing its anti-corruption law, and why the OECD is pushing everyone else to get on board.

What happened on 9/11 taught that public corruption isn’t a local problem but a global threat. In the years since, countries have finally started working together to fight cross-border graft. The DOJ has mentioned cooperative agencies in the U.K., Germany, France, Haiti, and Costa Rica, among others.

Welcome to the post-9/11 world.

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