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In defense of the Caldwell Doctrine (in reply)

Yesterday’s post on Leslie Caldwell’s vision of the FCPA elicited a number of comments. And I do love a good back-and-forth.

The war on terror may be new, but framing the FCPA as a foreign policy tool is not. Let’s go back to the legislative history. Two principal events gave rise to enactment of the FCPA. One was Watergate; the other was a series of overseas bribery scandals, the most famous of which was Lockheed’s bribing of officials in the Netherlands, Japan, and particularly Italy. We’ve largely forgotten the overseas piece, but Ms. Caldwell has not.

Why did the overseas scandals trouble us so much? Think of the international political context in 1977. It was the Cold War. Italy’s parliament, for example, was equally divided between what we might call a liberal-democratic party and a communist party. As the legislative history amply reflects, Congress was concerned that bribery revelations made capitalism look bad. It confirmed the communists’ propaganda. Italy’s parliament could tip in their favor. We had to make a statement; we had to thwart the expansion of anti-democratic forces. Conceived in large part as a counter to communism, the FCPA’s aim was to promote liberal-democratic institutions abroad.

Though the Cold War is over, it has now been replaced by the war on terror. The need to promote the same liberal-democratic institutions remains. And Ms. Caldwell has acknowledged that the FCPA was indeed designed in large part to do this very thing.

But as another commenter points out, FCPA enforcement may not be doing nearly as much as it could to address overseas corruption. Yes, we’re curbing the corruption of companies subject to FCPA jurisdiction. And in so doing, we’ve helped to effect a worldwide sea change in attitudes toward corporate bribery. But if we are to truly embrace the goal of promoting transparency, prosperity, and stability abroad, FCPA enforcement needs a little something new.

Another commenter rightly observes that the World Bank, OECD, and others are doing their part. Certainly true, and important to acknowledge. But for better or for worse, the FCPA remains the world’s principal anti-bribery enforcement initiative. (Just check the recent TI report). Hence the need for what a former U.S. president called “that vision thing.” 

Hence the importance of the Caldwell Doctrine.


Andy Spalding is a senior editor of the FCPA Blog. He is an Assistant Professor at the University of Richmond School of Law.

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1 Comment

  1. A couple of Mr. Spalding's observations are worth mentioning. Enactment of the FCPA was motivated, not only by anti-democratic forces abroad, but also by the encroaching threat to the integrity of our democracy at home. The legislative history reminds us that revelations of corporate "slush fund" political contributions in the Nixon administration brought home the stark reality of corporate bribery. Further, the World Bank, OECD and other institutions may be doing their part in the short term. However, in recent years, it has become apparent that the interdependency between countries and the financial institutions that bridge international boundaries may be perpetuating the problem. Until the World Bank and other institutions take actions that cripple the flow of funds from bribery-prone countries, the FCPA and the UK Bribery Act would be relegated to serve simply as global police officers on the beat.

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