FCPA enforcement has always been bi-partisan, commanding principled support from both sides of the aisle. Is that about to change?
The Speaker of the U.S. House of Representatives recently announced plans to repeal a number of federal regulations, including the SEC’s requirement that oil, gas, and mineral companies disclose payments to foreign government in excess of $100,000. How can Congress repeal an SEC rule?
The Congressional Review Act authorizes Congress to repeal executive agency regulations promulgated within the last sixty days of the prior congressional session.
Let’s remember that FCPA enforcement initially began in earnest under a Republican administration. The Department of Justice dusted off the FCPA in the first half of the previous decade, under the presidency of George W. Bush. Enforcement accelerated quickly, and continued unabated when President Barack Obama assumed office.
People on different points of the political spectrum may have liked the FCPA for different reasons. Some may have wished to reduce the corruption tax on U.S. companies, clean up the foreign markets where U.S. companies did business, and assert strong U.S. leadership in foreign policy. Others were drawn to anti-bribery enforcement to hold companies accountable and protect the overseas victims of corrupted governments. But there has always been something in it for everyone. If only there were more such laws.
The SEC’s disclosure rule was passed in the same spirit. Overseas natural resource extraction is of course one of the most corruption-prone sectors in the world. We call it the “resource curse:” countries with abundant resources but limited rule of law grow plagued by corruption and egregious inequalities of wealth. Meanwhile, foreign companies are faced with heavy bribery taxes and an unpredictable legal environment. Nobody wins. The SEC rule merely imposed a disclosure requirement on U.S. public companies, making more transparent payments that, if used for bribery, were already illegal under the FCPA.
The rule is now on the congressional chopping block. But the fervor behind the guillotine seems less about corruption than about regulations. That is, the SEC’s rule seems caught up in an anti-regulation movement that is not specifically targeted on anti-corruption enforcement.
Will the fervor soon turn to anti-corruption laws per se? Whether a Republican or a Democrat, let’s hope not.
Andy Spalding is a Senior Editor of the FCPA Blog and a Professor at the University of Richmond School of Law.