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Harry Cassin
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Andy Spalding
Senior Editor

Jessica Tillipman
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Julie DiMauro
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Thomas Fox
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Bill Waite
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Richard Bistrong
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Wal-Mart’s Victims Part VIII: So What Should We Do?

I’ve argued in this series that we should think of corruption generally, and bribery specifically, as violating human rights — specifically the rights of the citizens of the countries in which bribery occurs. (And make no mistake, this includes  the U.S.).

But as the UK has recently reminded us, we should care; we certainly did in 1977, when we enacted the Foreign Corrupt Practices Act. We wanted to do more than merely punish the corporate transgressors; we wanted to improve conditions in the countries where our companies were paying bribes.

But it turns out that the notion of compensating bribery’s victims is not unprecedented in U.S. enforcement history. We may be surprised to hear that in two previous FCPA enforcement actions, we have awarded restitution directly to overseas victims.

The first was one of the earliest FCPA enforcement actions. In U.S. v. Kenny International Corp. (1979) the defendant was a New York corporation that allegedly bribed officials of the Cook Islands. We ordered Kenny to pay restitution directly to the Cook Islands government (which, you’ll be glad to know, is an independent democracy in free association with New Zealand). The second occurred in 1990. In U.S. v. F.G. Mason Engineering, a Connecticut company allegedly bribed a West German official to win and renew contracts.  Again, we ordered the defendant to pay restitution directly to the harmed government.

But both of those cases precede the era of modern enforcement. Since we began enforcing the FCPA in earnest (a little less than ten years ago now) we’ve never awarded restitution to overseas victims. (You’ll sometimes hear people say that the 2009 case of U.S.  v. Juan Diaz involved restitution, but that case is more properly understood as a criminal forfeiture — though the alleged misconduct occurred in Haiti, the monies were deposited in the U.S. Treasury.)

There are two reasons why formal restitution is probably not the most promising way of compensating bribery’s victims. The first pertains to the countries in which we do business; the second pertains to our federal restitution statutes. We’ll discuss both in the next post. But if you just can’t wait that long, try this in the mean time.

Wal-Mart’s Victim’s Part I can be viewed here, II here, III here, IV here, V here, VI here and VII here.


Andy Spalding is a senior editor of the FCPA Blog.

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