The War on Bribes: The FCPA and the Global Battle to End Corruption
56 Pages Posted: 19 Apr 2021 Last revised: 29 Apr 2021
Date Written: April 17, 2021
In 1972, investigations following the Watergate break-in uncovered a scandal within the scandal: corporations were using slush funds and manipulating financial statements to disguise bribes to foreign officials for business purposes. The U.S. Congress, led by Senators William Proxmire and Frank Church, effectively declared an all-out war on bribes. Their primary weapon: The Foreign Corrupt Practices Act, signed into law at the end of 1977 with the explicit purpose of ending corporate bribery of foreign officials. In the decades that followed, the international community joined the battle, with some 40 countries enacting laws similar to the FCPA by 2019. But while enforcement by the Department of Justice and the SEC climbed dramatically in more recent years, the agencies' extensive - and perhaps excessive - use of Deferred- and Non-Prosecution Agreements (DPAs and NPAs, respectively) has blunted the effectiveness of the law in rooting out corruption. This paper argues that efficacy of the FCPA is ultimately a function of enforcement, and that enforcement must address individual wrongdoers with meaningful penalties for the FCPA to have any prayer of achieving its goal.
Keywords: FCPA, corruption, Watergate, Department of Justice, SEC
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