Monday, November 28, 2011

The FCPA is under attack

From today's WSJ:

For corporate America's top lobbyists, trying to curb a powerful antibribery law known as the Foreign Corrupt Practices Act has risen to the top of the agenda, sparking a widespread debate about how the legislation is enforced.  In the past five years, a remarkable run of enforcement of the U.S. law has led to about $4 billion in penalties against corporations. The law prohibits companies from paying bribes to foreign officials to win business. A violation can result in criminal prosecution.
Unlike the U.S., most countries have a culture of corruption. The FCPA, however, is a much-needed tool to keep American companies free of corruption when doing business abroad.  In my opinion, the FCPA is not used enough.  The chart to the right shows that while the DoJ has started to bring more FCPA cases, only two dozen cases were brought in 2010--a very small number.  

Fraud and corruption hurt honest businesses.  This quote from the WSJ sums it up: "U.S. authorities have said their goal is not only to prosecute FCPA violations but also to promote a level playing field in business transactions by eliminating corruption from the equation."