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Harry Cassin
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Andy Spalding
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The BOTA Foundation explained (Part Twelve, conclusion): Future BOTAs and the FCPA

Aaron Bornstein wrote in the prior post of the potential to use recovered bribe proceeds or stolen assets to fund BOTA-inspired programs in developing countries. That possibility is real, and important.  But recognize that the majority of FCPA settlements do not involve traceable and recoverable assets — the money is typically long gone. So if we are to create more BOTAs, we must fund them with the money that is available in your more typical FCPA settlement.

Fortunately we need not reinvent the wheel. As this prior series about Walmart’s victims discussed, the environmental unit of the DOJ has for almost three decades been doing this very thing. They routinely authorize the use of a percentage of the criminal penalty money to fund environmental initiatives in the communities impacted by the violation. Think BP in the Gulf of Mexico, where 40% of a $4 billion settlement was used to fund environmental cleanup and prevention programs in the communities impacted by the spill.

You may think that the legal authorization for such settlements is unique to environmental law. It’s not. Rather, the authorization comes from the Federal Sentencing Guidelines, and indeed, the same sections that the fraud unit now uses in settling FCPA cases. Put another way: the DOJ presently has the legal authority to use a portion of the criminal penalty money to fund anti-corruption initiatives in the countries where the bribes occurred. We just have to decide to use it.

The objection to settling FCPA cases this way is typically two-fold. First, folks will argue that such a settlement will violate the Miscellaneous Receipts Act, which requires depositing criminal penalty money in the U.S. Treasury. But as this earlier series about the Miscellaneous Receipts Act explained, the MRA applies to environmental settlements in exactly the same way that it applies to FCPA settlements. If the environmental settlements comply with the MRA — and it is well established that they do — then so too could FCPA settlements fund such programs without violating the MRA. Again, to see how this would work, see here.

The second typical objection is that returning money to the developing countries where the bribes occurred — in other words, to the same corruption-prone environments that precipitated the original bribery — would certainly result in further looting. But herein lies the value of the instant series.

BOTA proves that this is not necessarily so. Money can be invested in developing countries in ways that truly benefit the victims, and not simply put the money back in the hands of the corrupt governments. Do it through the private sector. Put the necessary transparency and accountability controls in place. Structure it much as BOTA was structured. We can do great good in the very countries where the bribery occurred, where the government is too often failing its people. Think of it: a very small percentage of a substantial FCPA settlement would be a mind-boggling amount of money in that developing country. Think of the initiatives we could fund.

Let’s put this in perspective. We enacted the FCPA when the world thought we were crazy.  We began enforcing the FCPA when the world thought we were crazy. Can we now take this equally historic step? Compared to the first two, it’s a piece of cake.  Because no one will think we’re crazy. To the contrary: anti-bribery stakeholders the world around would support the initiative. The victims would benefit. The DOJ would be the hero.  All we need now is a willing defendant, well-informed legal counsel, and DOJ officials who see the big picture.

I like our chances.

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Part One of this series is here, Part Two is here, Part Three is here, Part Four is here, Part Five is here, Part Six is here, Part Seven is here, Part Eight is here, Part Nine is here, Part Ten is here, and Part Eleven is here.


Andy Spalding is a Senior Editor of the FCPA Blog and Assistant Professor at the University of Richmond School of Law.

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