Ten years later, it still haunts me. I’m sitting at a Mumbai café with an Indian forensic accountant. She’s getting up to speed on what was then a new phenomenon: FCPA enforcement.
“So, a U.S. company who pays bribes in my country can now be penalized?”
“Oh yes,” I confidently reply, “even in the hundreds of millions of dollars.”
She pauses, then asks a question born of innocent curiosity. But to me, it felt like lighting a fuse to a bomb I could not yet see. “Where does that money go?”
Wait, what? I had never thought about it. But I didn’t like where this was going. Startled, I could do no more than sheepishly reply, “um, it goes to the U.S. Treasury.”
“Whom does that help?”
And there it was, laid bare, exposed. An accidental consequence of foreign bribery enforcement. The fine and penalty money is deposited into the public fisc of who? The perpetrator.
Of course, effective criminal enforcement of foreign bribery laws helps the citizens of foreign countries insofar as it deters bribery. But when companies from countries like China, who does not enforce a foreign bribery law, stand ready to take their place, then the benefits to those citizens drop precipitously.
Here’s where the CROOK Act steps in. This bill, now pending in the U.S. Congress, would use FCPA enforcement proceeds to fund overseas anti-corruption initiatives. It proposes taking 5 percent of FCPA enforcement proceeds to fund overseas anti-corruption initiatives, under the supervision of the State Department and an Interagency Task Force. The funding can support governmental or non-governmental organizations and would go to countries that are well-positioned to effectuate meaningful reform.
This bill gets at the problem the Indian accountant exposed. It uses the significant revenue of FCPA enforcement to more directly benefit bribery’s victims: the citizens of the countries where the bribery occurs – typically developing countries. It can raise awareness and strengthen institutions. It can empower host countries to enforce their own values and laws. It tempers our dependence on the supply-side enforcement that is presently so uneven.
It’s just better.