* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Recently, over lunch in a white-linen New York eatery, the topic of the Foreign Corrupt Practices Act and recent efforts to amend several of its primary provisions became a topic of conversation. It was an interesting discussion to say the least. For while I opened the discussion by saying that the proposed amendments were an attempt to water down the law my interlocutors noted that the U.S. Chamber of Commerce’s proposals were an attempt to instill some fairness into the FCPA. As the grilled salmon and pea tortelli were being served I had an inkling this was going to be an interesting repast.
Among my fellow diners were two attorneys who work for a well known law firm that provides expert counsel for very large corporate clients. They were smart, engaging and charming. And they believe corporations are being given a bad deal by the FCPA. It was unfair, they said, for companies, especially ones that were in an industry where licenses were required to continue operations – such as banks – to be put in a situation where an over-zealous prosecutor could use that license as leverage when negotiating a plea deal in an FCPA case.
Leaving aside whether a prosecutor should use such leverage the question was asked, “how many instances are there of the Justice Department pursuing an FCPA case against a bank or other firm that requires a license for its operations.
“Well, not many” was the reply.
They tried to make their argument another way. Current FCPA rules, they said, do not take into consideration instances where the company has detected a possible violation and has brought it to the attention of the Justice Department. “The companies are not given any credit for trying to clean their own house” they noted, and said that the fines imposed are no lower than if the company had not detected the bribe.
The follow-up query was understated: “Does the Justice Department often negotiate FCPA plea bargains with firms that turn themselves in?”
“It is not a high percentage of cases,” they said with a slightly pained expression.
Undeterred, they tried yet another tack. It was unreasonable, they noted, for large U.S. corporations to have to fight a charge of an FCPA violation committed by an employee in a far-away subsidiary especially when the firm had a strong FCPA compliance regime in place.
“But don’t firms have to defend themselves against sexual abuse charges even though they have an anti-harassment policy in place?”
“But those are civil charges,” they replied, “not criminal charges in which someone could go to jail.”
The question of how often an FCPA plea bargain results in jail time went unasked. It was clear that the conversation was stalling. As water was sipped and lips dabbed one of the attorneys rallied: “so what else do you work on?” A deft touch, that, gently guiding the conversational train back on its tracks.
“We’re advocating that all companies report their beneficial owners when they apply for incorporation,” we noted. One of the lawyers leaned back slowly to consider the point. After several seconds of deep thought, eyes cast upward, he leaned forward a bit and said, “Who would be against that?”
Ah, consensus! Smiles and nods ringed the table. And then, swiftly, the denouement: “Waiter, dessert!”
