“I am bothered by the Chamber’s effort to gut this law,” said Stanley Sporkin, former enforcement director of the SEC who helped write several parts of the statute. “This law has made an important contribution in the world. The Justice Department has been aggressive in enforcing [it], and it has produced good results.”
The debate over the FCPA has intensified in recent years, in part because of the increase in federal enforcement.
In 2004, Justice pursued two cases under the FCPA. By 2008, there were 20 actions. The tough enforcement has continued under President Obama. In 2010, Justice worked on a record 48 cases, including one that resulted in an $800 million fine against German conglomerate Siemens.
Paul Pelletier, a former supervisor for the unit at Justice charged with enforcing the FCPA, said two prosecutors were dedicated to the issue when he began in 2002. By the time he left in 2011, there were 15, as well as additional units at the FBI and the SEC.
“The more we lifted up rocks, the more we saw of it,” said Pelletier of the bribery, adding that cases turned up as companies aggressively globalized their operations.
Last fall, assistant U.S. attorney general Lanny A. Breuer said officials were planning during 2012 to release “detailed new guidance” about how the FCPA should be enforced. Still, he made clear that he had little intention of scaling back the decades-old anti-corruption law.
“This is precisely the wrong moment in history to weaken the FCPA,” Breuer said then. “There is no argument for becoming more permissive when it comes to corruption.”
Breuer’s comments came as several business groups boosted efforts to rework parts of the law. The Chamber’s Institute for Legal Reform released a 28-page policy paper detailing a wish list of FCPA reforms. Among them: Measures limiting a company’s liability for the actions of its subsidiaries and a clearer definition of who qualifies as a “foreign official.”
That push has continued this year, as Justice and SEC officials have met with a wide range of industry and advocacy groups regarding the guidance the agencies plan to issue in coming months.
In February, the Chamber enlisted a disparate collection of other groups, including the American Gaming Association, the Faulkner County Farm Bureau in Arkansas and the Retail Industry Leaders Association, to sign onto an 11-page letter publicly advocating tjat federal officials clarify the statute. The letter argues that vague language in the law and the way in which investigators have enforced it have resulted in “a chilling effect on legitimate business activity.”
Those groups and others have said that they are merely looking for a measure of certainty and clear-cut guidelines from federal authorities.
Mukasey also rejected any suggestion that the Chamber effort is undermining the bribery statute, saying the proposals could ultimately strengthen the effort to fight corruption. “The clarity we are seeking will strengthen incentives for compliance,” he said, adding that the criticism of the Chamber campaign is off base. “I understand why people use that rhetoric. But I don’t see it as accurate.”
The requests by Chamber and its allies for adjustments and clarifications to the law have provoked strong criticisms from some government officials and a coalition of human rights and corporate governance groups.
In a speech last month, Secretary of State Hillary Rodham Clinton reiterated that the Obama administration has no intention of allowing a scaled-down FCPA.
“We are unequivocally opposed to weakening the Foreign Corrupt Practices Act,” Clinton said. “We don’t need to lower our standards. We need to work with other countries to raise theirs. I actually think a race to the bottom would probably disadvantage us.”
Harvard law professor David Kennedy co-wrote a report last year on the FCPA called “Busting Bribery,” which was published by the Open Society Foundation, backed in part by liberal philanthropist George Soros. The paper denounced proposed amendments to the law.
“In the guise of clarifying,” Kennedy said, “they are gutting the law.”