We’re in the home stretch now on this series, in which we’ve explored how the FCPA can better serve its original purpose of promoting values and building institutions in developing countries.
I’ve proposed a Supplemental Transparency Project, in which the DOJ can exercise its prosecutorial discretion to use a portion of the penalty money for the direct benefit of overseas victims. The STP would serve two purposes: it would remedy the harms caused by the defendant’s bribes, and it would take measures to prevent future harms in the host country.
In Part XVI, I suggested that the STP can further the interests of the three principal groups implicated in an FCPA enforcement action: the US government, the corporations subject to FCPA jurisdiction, and the citizens of the countries in which the bribes occur. Let’s start with the U.S. government.
It has three interests. It wants to punish and deter bribery, in the first instance. But that’s not all. As a matter of policy, the U.S. government wants to promote commerce between nations. And it wants to help build liberal institutions in developing countries — this, after all, was the original purpose of the FCPA.
The STP does all three. The money used to fund the STP would not reduce the overall penalty amount. So the deterrent effect of criminal penalties remains intact — the defendant’s penalty is not reduced by a single dollar to fund the STP. The disincentive to engage in bribery remains exactly the same.
But the STP would also help the U.S. government promote commerce and build institutions. How? Three ways.
By issuing a well-publicized statement in the host country detailing the bribery scheme, the extent of the government’s endemic corruption is exposed. And ordinary citizens will take notice — just look at what’s going on in Brazil right now. By bankrolling investigative reporting, we’re further exposing the bribery of competitor companies. Again, the public will respond with pressure, both in the capital-importing and capital-exporting country. And by funding transparency programs, we’re training the next generation of business and civic leaders.
But not only should the U.S. government like the STP, so should the corporate community. I’ll explain how in the next post.
Wal-Mart’s Victim’s Part I can be viewed here, II here, III here, IV here, V here, VI here, VII here, VIII here, IX here, X here, XI here, XII here, XIII here, XIV here, XVa here, XVb here, XVI here, XVII here, and XVIII here.
Andy Spalding is a senior editor of the FCPA Blog.
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