The FCPA is a white-collar crime solution to a foreign policy problem.
If that sounds awkward, well, it should. Though the statute targets conduct that occurs primarily overseas, we have entrusted enforcement to two government agencies — the DOJ and SEC — that by their own admission do not possess much foreign policy expertise at all.
If you go back and look at the legislative history, you’ll see that the statute was principally motivated by foreign policy considerations. Democrats and Republicans alike, from the Ford and Carter Administrations and both side of the congressional aisle, spoke emphatically of the damage that overseas corporate bribery has on our economic and political relations with foreign countries. But the ultimate statute granted enforcement authority to two agencies that are otherwise domestic in focus.
So we enforce the statute in just about the same way that we enforce section 10-b of the Exchange Act (the principal U.S. securities fraud provision). That’s not entirely crazy — they both concern business fraud — but the FCPA plainly raises a big bunch of policy issues that are completely different. And very important.
But here may be the starting point for rethinking enforcement. The Obama Administration has embraced the principle — long debated by academics — that corruption violates a human right. If this is so, then anti-corruption enforcement does not just have a foreign policy component; it is fundamentally and essentially a foreign policy issue. And the FCPA is probably the principal plank of our international anti-corruption effort.
So if we started from the premise that the FCPA is about protecting human rights, would the enforcement scheme look different? In this paper I explore that idea; in a current project, I’m pursuing it much further.
These adventures will continue well past autumn.
Andy Spalding is senior editor of the FCPA Blog.