Wal-Mart’s Victims, Part XXI: More Reasons Why Corporations Want the STP

The second objection defendant corporations typically have to FCPA enforcement concerns the thorny problem of solicitation. Sure, some companies pay bribes aggressively and unreservedly. But others feel pressured to do it. They feel trapped, with no alternative, like they’re being extorted. But that’s no defense under the FCPA.
 
So what’s the best thing a defendant company can do? Expose the larger problem. The Supplemental Transparency Project would do this in two ways. First, the investigative reporting we discussed in the prior post will further expose the pervasiveness of the problem. And it will bring further public pressure to bear on the corrupt government. The FCPA can’t reach the soliciting government officials, but FCPA defendants can expose the problem to the public. Let the public take it from there, as Brazil is doing right now. Let the host country begin cleaning up its business environment so foreign corporations can avoid this problem next time around.
 
But the STP would do more than that. It would help turn the factual admissions in the DPA/NPA into a public report to be well publicized in the host country. Re-write it to make it more digestible and engaging (no offense, DOJ) and then translate it into the local language. Give it the right tone, and publicize it through the right channels.
 
It may seem counterintuitive, but such a report is actually in the defendant corporation’s interests. If written properly, the report would sound apologetic. And victims of large-scale crimes frequently seek an apology. But at the same time, the report would show just how corrupt the host government already was.
 
Both through the apology and the exposure of co-conspirators, the STP would help the defendant corporation begin to repair its reputation. And most any MNC would agree that reputation is critically important in international business, especially in the retail sector.
 
Were I a corporate FCPA defendant, I’d want the public to understand that my company didn’t introduce bribery to the host country. I’d want the world to know just what went down, how, and why. The STP could do this.
 
So what’s the downside to the STP? Who loses? Nobody. The US government gets what it wants, as do U.S. corporations. And the host countries get so much more than current enforcement has ever given them, as I’ll explain in this series’ next and final 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, XVIII here, XIX here, and XX here.

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Andy Spalding is a senior editor of the FCPA Blog.