Punishing the Penitent: Disproportionate Fines in Recent FCPA Enforcements and Suggested Improvements

Public Contract Law Journal, Vol. 40, p. 393, 2011

88 Pages Posted: 2 Aug 2010 Last revised: 27 Mar 2011

Bruce Hinchey

affiliation not provided to SSRN

Date Written: July 15, 2010

Abstract

The Department of Justice has long promised tangible benefits to companies that voluntarily disclose Foreign Corrupt Practices Act (FCPA) violations. Justice Department officials have promised that the enforcement of the FCPA is both fair and consistent. Despite these promises, critics question the benefits of voluntary disclosure based on the outcome of a few, isolated cases. In this thesis, forty FCPA cases from 2002 through 2009 are compiled, comparing the ratio between bribes and fines for companies that do and do not voluntarily disclose. The results side with the critics and reveal that there does not appear to be a benefit to voluntary disclosure. The data from these cases is then used to identify how the FCPA can be honed to encourage compliance and deter violations in a fairer and more efficient manner. Next, comparisons are made between the FCPA and other anti-corruption organizations and entities, with the intent of incorporating refinements to the voluntary disclosure enforcement process. These comparisons consider not only the legal framework for preventing bribery but also how those laws are enforced. Finally, recent FCPA developments are considered along with some suggested actions to bring more fairness and efficiency to voluntary disclosures under the FCPA.

Keywords: Foreign Corrupt Practices Act, FCPA, Bribery, Corruption, Anti-corruption, Department of Justice, DOJ, Securities and Exchange Commission, SEC, Fines, Penalties, Disgorgement

Suggested Citation

Hinchey, Bruce, Punishing the Penitent: Disproportionate Fines in Recent FCPA Enforcements and Suggested Improvements (July 15, 2010). Public Contract Law Journal, Vol. 40, p. 393, 2011. Available at SSRN: https://ssrn.com/abstract=1650925 or http://dx.doi.org/10.2139/ssrn.1650925

Bruce Hinchey (Contact Author)

affiliation not provided to SSRN ( email )

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