New York Times: Hits, and Misses, in a War on Bribery
Until recently, federal prosecutors had won settlements in nearly every battle involving charges of foreign bribery by multinational corporations and their executives. But in late February — indeed, the very week that Mr. Stanley was sentenced — the Justice Department had an embarrassing setback: it abruptly withdrew the biggest case ever brought against individuals under the Foreign Corrupt Practices Act.
It was an extraordinary turn of events. The F.B.I. had recorded 800 hours of video and audio as part of a sting operation involving supposed arms contracts in Africa. Twenty-two executives had been arrested.
Then the whole case fell apart. In a withering appraisal, the federal judge in the case, Richard J. Leon, called the government’s effort “a long and sad chapter in the annals of white-collar criminal enforcement.” Its approach to the law, Judge Leon said, had been “very, very aggressive.”
THE development opened the door for critics who assert that federal authorities have overstepped in trying to fight corruption overseas. They say that the crackdown, which began in earnest three years ago, has made it harder for companies to win legitimate business and that it has needlessly instilled fear among executives. Many companies would rather make any charges brought under the act go away with a quick settlement than try to fight them in court.
“We are seeing companies getting scooped up in aggressive enforcement actions and investigations,” said Lisa A. Rickard, president of the United States Chamber of Commerce’s Institute for Legal Reform, which is pushing to modify the law. “A culture of overzealousness has grabbed the Justice Department.”
“The last time I checked,” Ms. Rickard added, “we were not living in a police state.”
Such heated criticism aside, federal authorities say they are unbowed.
Lanny A. Breuer, the assistant United States attorney general who has stepped up enforcement actions under the act, said he saw no reason to change course. In fact, he is expanding his staff — and his range of potential targets. ...
... AS they pursue their overall campaign, federal authorities have their work cut out for them. As business has gone global, so has graft, particularly as companies in rich nations push into poorer regions. The World Bank estimates that $1 trillion in bribes is paid annually to government officials. In Africa alone, $148 billion is siphoned off annually, according to Transparency International, a global nonprofit group that tracks corruption. ...
... Leading the efforts to modernize the corruption act — or weaken it, in the eyes of the government — is the Chamber of Commerce. The group, in Washington, has been in discussions with the Justice Department and the Securities and Exchange Commission about new guidelines on enforcement. That guidance, expected later this spring, would give corporations a better notion of what they need to do to stay on the right side of the law.
Corporate America clearly wants its views heard.
“You are dealing with criminal liability, and that strikes fear and terror through the heart of the corporate suite,” said Ms. Rickard at the chamber.
In a letter signed by more than 30 trade associations, the chamber asks that the guidance allow companies with strong compliance programs to use that as a defense against liability. It also asks that the definition of a “foreign official” be more limited and that companies not be held accountable for the past wrongdoing of foreign companies they may purchase, among other provisions. ...
... Mr. Breuer and other government lawyers have spoken out against the provisions. They have been joined by 33 human rights groups, including Amnesty International, Oxfam America and Transparency International. ...