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Lobbying for Corruption: U.S. Chamber of Commerce Attacking Anti-Bribery Law

| April 3, 2011

corruption chamber of commerce bribery foreign officials law

The U.S. Chamber of Commerce would rather the government stayed out of its wads of bribery. (© Eric Cuthbert)

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, 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.

Koehler said his main issue with FCPA enforcement is that the allegations are almost never subject to judicial scrutiny because these cases always settle [9]. Asked why this is, given that most defendants are giant multinational companies with enough resources to take the corruption charges to court, Koehler said that the “the cost of aggressively mounting a legal defense based upon the statutes, elements, and facts of case are too risky.”

However, a few FCPA challenges are currently making their way to court, some accusing the Justice Department of using too broad a definition for “foreign official.”

Mark Mendelsohn—formerly the Justice Department’s chief FCPA enforcer and now in private practice—told the Wall Street Journal last week that he expects current enforcement trends to continue. He cited the Mideast protests as part of a “growing recognition of what people commonly call the corrosive effects of corruption on development and democracy and democratic institutions.”

The U.K. is currently finalizing its own anti-bribery law, which would seem to address the Chamber’s objections about an uneven playing field. The Chamber, however, writes in its report that U.S. authorities may try to apply even more pressure to companies “so as not to be outdone” by Britain in the area of anti-corruption enforcement.

–Marian Wang, ProPublica

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3 Responses for “Lobbying for Corruption: U.S. Chamber of Commerce Attacking Anti-Bribery Law”

  1. William says:

    Isn’t it remarkable how they don’t even try to hide it anymore?

    I am of the belief that Citizens United was, in essence, a flip of the switch that turned on the spotlight which illuminates the large “For Sale” sign hanging from the Capital building in DC. It would make sense then, that the decriminalization of bribery should follow because, hey, we’re doing it anyway and what’s the harm in a little payola. It’s not as if the large multinationals are bastions of ethical behavior or integrity. Doesn’t look good on the quarterly shareholder report, don’t cha know.

  2. palmcoaster says:

    I yet don’t understand being the National US and Local Chambers of Commerce the number one promoter of outsourcing of our contracts and jobs, how come any small business is still paying a membership! Further more the membership funds are openly used for funding support for any GOP candidate in any national or local election. Should change its name to US GOP Chamber of Commerce.
    They only lobby big time for the big corporations while funded by the small business owners that hope for some exposure for their small enterprises. Many to find out the opposite. I look forward to our legislators to stay the course and reject any Chamber requested changes to this “good anti bribery law in place now”

  3. Richard Breuer says:

    Let’s just change the law to make all bribery unlawful, not just bribery of public officials. My state, Pennsylvania, prohibits commercial bribery. So do NJ NH IO CO IL LA TX KY OK AL AZ KS MS VA NY UT CA MN SD FL CT WA AK NV MO MA to one degree or another. I guess with the limits on being crooked in the US, it’s important to the chamber to keep the off-shore possibilities open.

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