Anti-Bribery Law Update!

A bipartisan group in Congress has revived legislation that would make it a crime for foreign government officials to demand or accept a bribe from a U.S. company, to serve as a statutory counterpoint to the Foreign Corrupt Practices Act and its ban on offering bribes.

The Foreign Extortion Prevention Act, known as FEPA, has been kicking around in the House of Representatives since 2019. On Tuesday, however, Sens. Sheldon Whitehouse (D-RI) and Thom Tillis (R-NC) introduced companion legislation in the Senate — so now the bill has an important bit of bipartisam oomph in the chamber where most bills go to die.

“It’s illegal for an American business to pay a bribe abroad; this bipartisan legislation makes it illegal for a kleptocrat to demand one,” Whitehouse said in a statement. “To win the new clash of civilizations, America must defend the rule of law and signal that violations will not be tolerated.”

Tillis made the same point, using the more nationalist language one would expect from the GOP: “The Chinese don’t play fair. The Russians don’t play fair. The Iranians certainly don’t play fair. These countries all rely on corruption and bribery to capture business opportunities. The Foreign Extortion Prevention Act attacks corruption at its source: those who demand bribes. It is a common-sense approach that brings the United States in line with best practices in fighting foreign bribery.”

The bill proposes that any foreign government official found guilty of its provisions would be subject to monetary penalties up to $250,000, 15 years in prison, or both. And much like the FCPA, the Foreign Extortion Prevention Act defines bribery and solicitation of bribes broadly. Here’s the relevant text: 

It shall be unlawful for any foreign official or person selected to be a foreign official to corruptly demand, seek, receive, accept, or agree to receive or accept, directly or indirectly, anything of value personally or for any other person or non-governmental entity, in or affecting interstate commerce, in return for:

1. 1. being influenced in the performance of any official act;
   2. being induced to do or omit to do any act in violation of the official duty of such official or person; or
   3. conferring any improper advantage,

in connection with obtaining or retaining business for or with, or directing business to, any person.

In theory the legislation will now go before the Senate Judiciary Committee for review, markup, and a vote sometime in the future; and then proceed to the full Senate for a final vote. It’s also worth noting that Sheldon and Tillis both serve on the Judiciary Committee, which gives FEPA a much better chance of success than most bills introduced into the Senate. 

We should also give credit to Reps. Sheila Jackson Lee, D-Texas, and John Curtis, R-Utah, who already introduced FEPA legislation in the House earlier this summer. They also introduced FEPA in 2019 during the previous Congress, but the bill went nowhere that time.

Will FEPA Actually Go Anywhere?

FEPA does have plenty of support from all the usual good-governance groups, such as Transparency International, the Coalition for Integrity, Oxfam America, and more. It also has support from the U.S. Chamber of Commerce, which might win over more Republican lawmakers to the cause. 

My question, however, is this: If FEPA does become law, how will its existence on the books affect enforcement of the FCPA? 

For example, if the Justice Department insists that a company under FCPA investigation must provide evidence against all participants in the wrongdoing if that company wants cooperation credit (which, let’s remember, is exactly what the Justice Department reaffirmed last week), wouldn’t that mean the company must cooperate in FEPA prosecutions too? I mean, by definition, the foreign official accepting or soliciting the bribe is complicit in the bribery scheme. 

And if a company did need to cooperate in FEPA prosecutions, how would that work in practice? Would the company need to provide employees as witnesses giving testimony? Would resolution of the FCPA case be paused until the FEPA case results in the foreign official getting  indicted? What if the foreign government actually extradites the corrupt official and he or she stands trial — would the company need to testify in court? 

Even better: If the foreign official is a high-priority target for the United States on some national security grounds — like, some crony of Vladimir Putin that the feds want to indict just to exert pressure on Putin — would that perhaps give the company a stronger hand in its FCPA case? Some “If you want to nail this guy, we want a non-prosecution agreement with no penalty” sort of gambit? 

Of course, for any of these scenarios to come to pass, Washington first needs to pass FEPA into law. Let’s see what happens.