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Lord Acton And The FCPA

Lord Acton (1834 – 1902)A New York Times story about the collapse of the Africa sting prosecution quoted me as saying “that in settlements without a trial, ‘the power of Justice is unchecked.’ Even more, . . . this lack of oversight ‘gives rise to evidence of corruption in our anticorruption laws, and that is the height of irony.'”

The reporter asked me for a “30,000 ft view” of the African sting dismissal; about ten minutes into my answer, she asked me to summarize in one sentence. I could not, so she subsequently did it for me. Lesson learned; there’s a reason why politicians speak in soundbites. I’m grateful to the FCPA Blog for this chance to more fully explain what I meant.

I do not believe, and never suggested, that anyone in the DOJ’s FCPA unit is morally corrupted. Rather, the irony I was describing in the interview is as follows.

Lord Acton famously taught that “power tends to corrupt, and absolute power corrupts absolutely.” As the FCPA Blog and many other commentators have suggested, the DOJ’s FCPA unit operates with relatively light checks from the judiciary or Congress. Starting from Lord Acton’s premise, we would expect such conditions to precipitate the extension of governmental power beyond its legitimate bounds. And this is what Lord Acton, and I, meant by “corruption.”

I would suggest that we now see several illegitimate extensions of power in FCPA enforcement: 1) legal theories, such as pre-acquisition criminal liability or the correspondent account theory, that I suspect would not withstand judicial scrutiny; 2) improper methods for the gathering and admission of evidence, as recently seen in the Lindsey, O’Shea, and Africa sting prosecutions; and 3) most baffling to me, the DOJ insisting that it should, and now does, reward corporations for compliance, but strenuously resisting congressional efforts to take away its discretion not to do so.  

All this suggests that the relative absence of checks on FCPA enforcement have, predictably, given rise to an expansion of executive power that constitutes, in one sense of the word, corruption. But again, I do not mean personal moral depravity. I mean what Lord Acton meant — the extension of governmental authority beyond its legitimate bounds. And this is indeed the height of irony: our anti-corruption unit has enjoyed, and arduously defends, the very political conditions that inevitably produce corruption.

Fortunately, the three principal checks on executive authority, formal and informal, are all now being brought to bear on FCPA matters. The judiciary is exposing bad prosecutions. Congress is contemplating statutory amendments. And the media continues to inform public opinion. So kudos to the New York Times, not to mention this blog, for doing their part.


Andy Spalding teaches international business law at the Chicago-Kent College of Law; effective June 1, he’ll be an Assistant Professor at the University of Richmond School of Law. A former Fulbright Senior Research Scholar and lawyer at a major international firm, he has lectured and conducted research on anti-corruption law throughout the developing world. He can be contacted here.

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1 Comment

  1. Sit through 4 months of trial with the crack "FCPA unit" and you may rethink distancing yourself from the conclusion that it is morally bankrupt.

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