By BEN FREEMAN
Last Friday several anti-corruption and oversight watchdog groups pushed back on the U.S. Chamber of Commerce's campaign to undermine the Foreign Corrupt Practices Act (FCPA), which for more than three decades has served as a deterrent to bribery.
- removing liability for subsidiaries that bribe;
- allowing mergers to provide immunity for past bribery;
- creating exceptions for companies that have a “compliance program;”
- requiring not only intention to bribe, but that it also be a “willful” act; and
- narrowing the definition of a “foreign official.”
At a briefing in the Capitol building on Friday sponsored by the Open Society Policy Center, Transparency International, Citizens for Responsibility and Ethics in Washington (CREW) and other groups, a panel of experts discussed the fallacy of these proposed amendments, with the overall conclusion being that they would make it easier to get away with bribery. Harvard professor of law David Kennedy and Northeastern international law professor Dan Danielson, authors of Busting Bribery, a lengthy report on the U.S. Chamber of Commerce’s attempts to weaken the FCPA, argued that all of the Chamber’s proposed amendments would simply serve to limit corporate liability for bribery.
Perhaps the most egregious example of this is the Chamber’s proposal to add a “willfulness” requirement to the FCPA, wherein it would have to be shown not only that a company was guilty of bribery, but that they also knew they were violating the FCPA. Ignorance of the law is no excuse for violating it even for the most innocuous offenses (as anyone given a parking ticket can attest)—so why should it be an excuse for bribery? The law professors' report notes that this proposal “looks much more like a license to commit pervasive and intentional bribery than a modest attempt to eliminate the risk of prosecutorial over-reach.”
Pervasive bribery is not just morally and ethically wrong—it’s bad for business. As the “Busting Bribery” report notes:
Widespread corruption abroad imposes enormous costs on American business, damages the global business environment and undermines the integrity and effectiveness of governments. A culture of corruption raises the costs of penetrating foreign markets and undermines predictability and business confidence. It imposes particular hardships on small and medium sized American enterprises seeking to participate in the global economy. Fighting these obstacles to American business has required a long-term commitment by the U.S. government and by American companies to change the climate for global commercial activity and the culture of business-government relations in countries across the world.
In this economic climate, we cannot afford to undermine the ability of small- and medium-sized American businesses to compete in foreign markets. Allowing the largest corporations with the greatest resources available to bribe undermines the spirit of entrepreneurship. This crony capitalism is bad for business, investors, and consumers.
The FCPA is an invaluable tool in U.S. foreign policy that exports to the world the ideals of equal opportunity and free enterprise this country was founded upon. As Bennett Freeman, head of Calvert Asset Management’s Sustainability Research Department noted at the briefing, there would be a grave hypocrisy if we were to roll back our landmark anti-corruption law while we are promoting anti-corruption abroad. Today, President Obama will launch the Open Government Partnership, an international initiative with dozens of other countries designed to encourage governments to become more open and fight corruption. Now is not the time economically or politically to weaken the FCPA.
Ben Freeman is POGO’s National Security Fellow.