At remedying the culture of bribery that afflicts so much of government in Mexico and other countries, the U.S.’s Foreign Corrupt Practices Act has been an utter and rather absurd failure. But the law has succeeded in its most important objective: making us feel good about ourselves [Steve Chapman, syndicated/Chicago Tribune]
- Notwithstanding the tone of much coverage, companies are not legally required to disclose past FCPA violations to the government when they emerge: “It’s my understanding from in-house counsel that those who [voluntarily] disclose are in the distinct minority,” says one observer. Also, Prof. Koehler notes that even if Wal-Mart successfully defends the Mexican outlays as lawful “facilitating payments,” the company could still be accused of violating FCPA’s “books and records” and internal control provisions as well as Sarbanes-Oxley. [Sue Reisinger, Corporate Counsel]
- Coyote recalls the eyes-averted maneuvers with which his former employer put itself in a posture of formal FCPA compliance when operating in corrupt countries;
- Must-read Scott Greenfield post: “The Foreign Corrupt Practices Act is the corporate version of blue laws, a reflection of American idealism born of our Puritanical origins, our Pollyanna-ish denial of how the sausage of business is made, our jingoistic belief that we are so integral to the economic functioning of the world that we can dictate a cultural and moral code for everyone, and they can either comply with our great American will or suck eggs. It’s a fantasy of self-righteousness, and even Wal-Mart got caught in the reality that the business of business is business, and not puffy-chested Americans can bully Mexicans into succumbing to our moralistic ways.” Also suggests what Wal-Mart might say in response (at least if Wal-Mart were a character in an Ayn Rand novel) and notes “efforts to take this mutt of a law and attempt to reform it, at least to the extent that it not make American multinational corporations chose between being criminals or uncompetitive.”
- Speaking of which, some reforms sought by business: “Bringing Transparency to the Foreign Corrupt Practices Act” [Michael Mukasey and James Dunlop, Federalist Society “Engage”]
- Jeffrey Miron: prosecute Wal-Mart but repeal FCPA [CNN/Cato]
- While agreeing that the FCPA we have at present is pretty bad, Prof. Bainbridge thinks a case can be made for such a law in principle;
- Something to get Capitol Hill Democrats on board for reform? FCPA might menace Hollywood on China dealings [WSJ “Corruption Currents”]
Wal-Mart’s expansion into Mexico, one of the great American business success stories of recent years, may also have led the giant retailer into extensive violations of the Foreign Corrupt Practices Act — in particular, if a New York Times investigation is to be believed, through efforts by U.S. management to sweep under the rug strong evidence that rogue management in Mexico had paid millions of dollars in bribes to facilitate the chain’s expansion. [NYT, AW, Business Insider] Last fall I described the law as “a feel-good piece of overcriminalization” that Congress should never have passed; more on FCPA here.
Remember that big New York Times exposé that accused Wal-Mart of massive Foreign Corrupt Practices Act (FCPA)/bribery offenses during its expansion in Mexico? Oops:
A high-profile federal probe into allegations of widespread corruption at Wal-Mart Stores Inc.’s operations in Mexico has found little in the way of major offenses, and is likely to result in a much smaller case than investigators first expected, according to people familiar with the probe.
- L.A. County assessor, though in jail, will keep drawing $197K salary plus raise [LAT]
- IRS lowers the regulatory boom on tax preparers [Institute for Justice video, auto-plays]
- On Wal-Mart Mexico bribery, NYT has a bit of a blind eye of its own [Stoll; earlier here, here, etc.]
- Another painful CPSIA regulation: CPSC on testing “representative samples” [Nancy Nord]
- “Popcorn lung” couple “won a $20 million judgment. Now, they’re broke.” [ABC]
- From Todd Zywicki: Libertarianism, Law and Economics, and the Common Law [SSRN via Bainbridge]
- If the courts disapprove of throttling internet speeds, what do they think of throttling class action claims redemption rates? [Ted Frank]
I’ll be writing at more length about the New York Times’s story on Wal-Mart de Mexico’s payments to local officials, and the apparent sense of some in Bentonville that the issue would rest quietly if only they didn’t investigate it too hard. In the mean time, I’ve got a new post up at Cato at Liberty pointing to some reactions to the case from observers like Mike Koehler, Peter Henning, Stephen Bainbridge and Paul MacAvoy (interviewed by Dan Fisher at Forbes).