DOJ weighs changes to Foreign Corrupt Practices Act

In an attempt to discourage corruption in the conduct of business overseas, the Department of Justice has submitted a policy proposal designed to stir corporations to be more expressive about criminal wrongdoing when soliciting foreign contracts.

The proposal would be an amendment to the Foreign Corrupt Practices Act (FCPA).

The proposal, which covers both enterprises and individuals, is intended to encourage cooperation from companies which violate the FCPA statute in exchange for leniency from prosecution should a firm disclose violations, work with federal prosecutors and provide information on employees who break the law.

The proposal does not prohibit prosecution of a firm; it offers a recommendation to decline prosecution should a firm cooperate.  Fines in forfeiture of company profits are deemed reasonable under this motion.

“It’s not a bad thing to provide companies with more transparency on department policy, but the draft policy lets them off the hook too easily,” said one unnamed Justice Department official.

Does this suggested amendment to a long-standing law wave a white flag to corporate America?

This law was inspired by Lockheed’s 20-year effort to shut out competition by bribing foreign officials and paying commission to international arms brokers.

The insidiously corrupting practice of paying tribute to foreign nationals for advantage in business transactions is unethical, illegal and worthy of vigorous prosecution.

While cultural standards differ, and the payment of tribute may be an accepted practice in the conduct of business abroad, it is illegal in the United States.

In the aftermath of the economic meltdown in 2008 and the economic dislocation which persists, there emerged a deafening hue and cry for criminal prosecution of Wall Street executives for their questionable conduct and contributions to the economic mayhem.  Calls for the federal government to break up banks, and protests with themes of income inequality followed and continue to this day.

Expecting corporate America to concede their errors fully and publicly is not likely to be aroused through a law which does not guarantee full immunity and, furthermore, it is unlikely individuals will betray their firm, their superiors or underlings if their company is facing heavy penalty.

The Justice Department should shelve this proposal, prosecute wrongdoers and avoid formulating edicts which may encourage illegal behavior if the penalties are less severe.

Similarly, corporate America should remain dedicated to hiring men and women who are willing to offer principled refusals to felonious invitations.

Both the tone and bearing of this proposal signal a retreat from criminal prosecution.


[Washington Post] [Photo courtesy thetruthrevolt]