Let’s Knock Down This Anti-FCPA Argument Now

The ethics & compliance community already knows we’re going to hear lots of chatter in coming months about easing the burden of compliance with the Foreign Corrupt Practices Act. We’ll probably see a new attitude at the Justice Department, shifting away from prosecuting organizations in favor of prosecuting individuals. We may see changes in the size of monetary penalties, or the use of deferred-prosecution agreements.

All that is fine; it comes with the territory of new political leadership. But what should set compliance officers on fire is the inevitable new round of talk about how overseas bribery isn’t a crime worth prosecuting at all.

This is on my mind thanks to a recent column in the legal blog Above the Law, “Is Trump the End of FCPA Enforcement?” The author, a white-collar defense lawyer, speculated about the need for all this attention to corporate bribery and FCPA enforcement. The killer paragraph was this:

If GE wants to bribe folks in Poland, why is that our problem and not Poland’s? Why should we care about corruption in Poland if Poland doesn’t? Indeed, if a Polish company can bribe but an American country can’t, doesn’t that put us at an unfair disadvantage? At the very least, why should U.S. taxpayers fund cleaning up Poland’s government?

In fairness to the author, I can’t quite tell from his column whether he truly believes those words. But many other people now in political ascendancy in the Trump Administration do believe those words. They see overseas bribery as somebody else’s problem, nothing that law enforcement or the corporate compliance community should bother with here.

That’s the sort of sentiment that should make ethics & compliance officers’ blood boil. So let’s take a deep breath and start dismantling these asinine ideas one at a time.

Corruption Stinks, Period

First, try visiting Poland and asking the Polish people whether they don’t care about corruption. I have asked that question, of people in India, China, Nepal, Bolivia, Tanzania, and other countries I’ve visited that are impoverished by corruption. They never don’t care about corruption. They struggle with it all the time, every day.

People with the above attitude seem to believe that corrupt societies can collectively wave a magic wand, and suddenly start behaving properly. That’s not how the world works. That’s not how our country worked, which spent most of its history mired in poverty and political corruption. Some parts of our country still do. Escaping from poverty and corruption is long, painstaking, frustrating work, with setbacks all the time, over many years.

I can’t understand how some people fail to grasp that point. Anyone who has been poor knows it. They know that the tentacles of circumstance can pin you down over and over, in one way or another.

Second, U.S. taxpayers aren’t cleaning up Poland’s government. They are cleaning up U.S. businesses, or overseas businesses that rely on our capital markets for liquidity and investment dollars. If corruption in Poland (or some other developing country) then starves for lack of illegal payments, that is a public good for everyone, regardless of where they live.

Third, the idea that corruption in Poland is Poland’s problem—where do people think that desperate and miserable people in impoverished countries will go? To the unemployment line or job retraining center? They will come to the West, legally or not. They will join extremist organizations that will offer them the false promise of a better life by hating someone else and blowing that person up. That other person will be us.

Walls don’t deter the desperate. Security lines don’t deter the desperate. Extreme vetting doesn’t deter desperate. Prosperity deters the desperate. And if they can’t achieve that on their own, there is no smarter investment than for people in prosperous nations to help them.

Fourth, where should the disregard for corruption end? We could play out the above paragraph to its logical conclusion: “If companies wants to murder business competitors in Poland, why is that our problem and not Poland’s?”

fcpaThat’s not a facetious exercise. In Russia, for example, this is what corrupt organizations do. So why not allow U.S. companies to do the same? What’s the difference between one offense and another in the quest for profit? If it’s OK to win business illegally, why create a distinction about the type of crime involved?

Nobody would say that murder in the name of profit is acceptable. Neither is bribery. But it’s an easier crime to commit, so it requires more discipline to prevent and police. And that’s the naked logic, here—compliance with anti-bribery statutes is hard work, which we don’t like to do, and the harm affects some distant, vague third party, so why can’t we say it’s not worth the bother?

Keep the Issues Clear

This is the attitude that emerges when you conflate FCPA compliance, which is hard, with FCPA enforcement, which is good. Yes, the two are deeply interlaced. And compliance itself is a frustrating task—more frustrating than it needs to be, for an abuse that often doesn’t happen at your specific organization. So you end up reaching the conclusion that anti-corruption enforcement is a fool’s errand.

It isn’t. I often say that anyone who wants to complain about zealous anti-bribery laws should go live in an impoverished country for a year first. Then see whether you still don’t care about the corrosive effect of corruption.

If we want to believe that America is a city on a hill, and a beacon of solace for more desperate parts of the world, this is the price. This is what we have to do, to believe in that idea. We have to believe we should do better simply because we can do better, even if doing better is a pain in the ass.

Lyndon Johnson once said, “What convinces people is conviction. Believe the argument you’re advancing. If you don’t you’re as good as dead.”

Johnson was right. Yes, compliance with the FCPA can be a challenging technical exercise. We should work to ease and improve the burden. But fundamentally, the FCPA is a good law that helps make this world better.

I believe most ethics & compliance officers feel the same way. (If you don’t, you should find a new line of work.) And anytime you hear someone else dismiss the menace of overseas bribery, feel free to print out this column and staple it to his forehead. He deserves it.


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