You are herePro Publica: As Mideast Lashes Out Against Corruption, Chamber of Commerce Lobbies to Weaken Anti-Corruption Law

Pro Publica: As Mideast Lashes Out Against Corruption, Chamber of Commerce Lobbies to Weaken Anti-Corruption Law


March 25, 2011- Even as anger over governmental corruption has exploded into protests across the Middle East, the U.S. Chamber of Commerce has been working to weaken the law that bans companies from bribing foreign officials.

That effort, which has been going on for months, recently got ratcheted up when the Chamber hired former U.S. Attorney General Michael Mukasey to lobby specifically on “possible amendments to the Foreign Corrupt Practices Act,” according to Mukasey’s lobbying registration document. The FCPA, passed in 1977, prohibits U.S. companies and foreign companies whose securities are traded on U.S. exchanges from paying bribes to foreign officials.

The U.S. Chamber’s Institute for Legal Reform, in a report last fall [PDF], said that both the Justice Department and the Securities and Exchange Commission had become “increasingly aggressive in their reading of the law” within the last decade, bringing more FCPA enforcement actions than ever, netting higher fines and filing more cases against individual company employees.

That’s something the Justice Department has trumpeted as an achievement: “Our FCPA enforcement is stronger than it’s ever been—and getting stronger,” Lanny Breuer of the Justice Department’s criminal division said at a conference in November. In the 2010 fiscal year, half of all penalties won by his division were from foreign bribery cases. (The Washington Post just yesterday published a rundown of some recent actions.)

The Chamber of Commerce argues that aggressive enforcement of the anti-bribery law makes U.S. businesses less competitive than their foreign counterparts, though the law also applies to some foreign companies. The Chamber is pushing for Congress to make changes to the law, such as defining “foreign official” and requiring “willfulness” for corporate criminal liability.

Butler University Assistant Professor of Business Law Mike Koehler used to represent clients facing FCPA charges. He told me he agrees with some of the Chamber’s objections, but doesn’t think it needs a legislative fix.

The law is fine, Koehler told me. But the Justice Department and SEC “are continuing to push the envelope” with enforcement, applying the law in ways that Congress didn’t originally intend. One example of that, he said, is that about 60 percent of current FCPA cases involve payments made to employees of state-owned or state-controlled companies. Those people shouldn’t be considered “foreign officials,” he said.

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