Humble American Pie

Following the human stories of FCPA enforcement can be humbling for otherwise proud Americans.

This week, Albert “Jack” Stanley reported to federal prison for, inter alia, his role in paying $182 million in bribes to Nigerian officials. This man was formerly the CEO of one of the world’s great engineering firms, Kellogg Brown & Root; indeed, the CEO of its parent company went on to become the Vice-President of the United States.

But make no mistake, corruption cuts across the proverbial political aisle. Also this week, another party’s former candidate for Vice-President of the United States began his criminal trial in North Carolina for allegedly misusing campaign funds. When it rains, it pours.

In conversations about the FCPA overseas, I often hear people ask, “who is the U.S. to be the world’s corruption police, when it has so much corruption at home?” Some would even charge the U.S. with hypocrisy, reading into FCPA enforcement a kind of “holier than though” attitude. But that’s not quite right.

Think back to the circumstances that gave rise to enactment of the FCPA in the 1970s. We had Watergate, and an SEC investigation that uncovered a fairly systematic U.S. corporate culture of bribe-paying. And we had specific revelations of a major U.S. defense contractor bribing government officials in Italy, the Netherlands, and Japan. Our primary motivation in enacting the FCPA was not to clean up other countries’ corruption. We enacted it to clean up our own.  

FCPA enforcement is not a denial of U.S. corruption; rather, it’s an admission. The commitment is not born of a finger-pointing moral self-righteousness; we just don’t want to be the world’s principal exporters of corruption. Yes, it is critically important that U.S. companies exemplify best practices in their overseas conduct. But we should remember that the FCPA is exclusively a “supply-side” prohibition. When the DOJ hammer comes down, it’s U.S. companies, and foreign companies who have consented to U.S. jurisdiction, that feel it the most. This is quite by design, and just as it should be. 

__________________

Andy Spalding is a contributing editor of the FCPA Blog. He 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.