Posts Tagged ‘Foreign Corrupt Practices Act’

August 23 roundup

  • Cross-examination could be awkward: “Top Nevada Court Says Attorney Son Can Represent Dad in Divorce From Mom” [ABA Journal]
  • “Phoenix Woman Ordered to Not Give Out Water in 112 Degree Heat Because She Lacked a Permit” [Doherty, Reason]
  • Admitting no guilt, Yale capitulates to feds’ Title IX probe, promises crackdown on sexual “climate” [YAM, earlier here, here, etc.]
  • Citing “egregious” ethics lapse, judge denies McGuireWoods fees in BarBri antitrust case [NLJ]
  • Foreign Corrupt Practices Act probe of retailers? [Reuters, FCPA Professor] FCPA piggyback shareholder suits falter [D&O Diary]
  • Obama has postponed a slew of new regulations until after November, and they’re a costly lot [Rob Portman, WSJ]
  • Fifth Circuit rejects challenge to sentencing in Paul Minor case [YallPolitics, background]

International law roundup

Crime and punishment roundup

  • Some reps push to cut off federal funds for states with Stand Your Ground laws [Maguire, Just One Minute] Podcast and video of Cato’s panel discussion on SYG laws [and related from Tim Lynch] Muddle-prone media mischaracterizes other cases besides Martin/Zimmerman as SYG [Sullum] “Shame of mandatory minimums shows in Marissa Alexander case” [Roland Martin, CNN, via Alkon] More: Florida voter poll shows strong support for SYG [Sun-Sentinel] New medical reports could prove helpful to defense in Martin/Zimmerman case [WFTV, more]
  • Feds prosecute building firm for paying NYC labor graft, but as for those who receive it… [Holman Jenkins, WSJ, with Wal-Mart Mexico FCPA angle]
  • Why is the Center for American Progress helping the Obama administration pretend that it’s ended the Drug War? [Mike Riggs] “Jailed for trying to fill a prescription” [Amy Alkon] “She stole his heroin, so she was the victim” [Jacob Sullum]
  • Conduct on which defendant was acquitted can still count as prior bad act evidence [Scott Greenfield]
  • New UK justice law abolishes indefinite sentences for public protection (IPPs) [Barder]
  • “Debtor’s Prison for Failure to Pay for Your Own Trial” [Tabarrok]
  • ACLU on unsettling possibilities of surveillance drones, law enforcement and otherwise [Lucy Steigerwald]

FCPA: a success

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]

More: Alison Frankel on the Sarbanes-Oxley angle; Catherine Dunn, Corporate Counsel, on the Mexican side of the Wal-Mart scandal.

More re: FCPA, Wal-Mart and Mexico

  • 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”]

Earlier here, here, here, and (at Cato) here.

Punitive moralism and Wal-Mart’s Mexico mess

I’ve got a new opinion piece up at the Daily Caller on some relevant angles of the unfolding Wal-Mart FCPA story, including the feds’ growing crackdown on low-level “facilitating payments” that had previously been considered lawful, the potentially confiscatory effects of something called the Alternative Fines Act, and the question of why FCPA fines and settlements should be going to the U.S. Treasury, “which was surely not the victim of the Mexican bribe-paying, if victims there were.” Earlier here, here and (at Cato) here; and link thanks to Scott Greenfield (a must-read), Point of Law, Chris Fountain, Steve Bainbridge, and Coyote.

Plus: Scoop! Must credit Washington Post! Wal-Mart (like much of the rest of American business) has backed FCPA reform! In above-the-fold coverage with no fewer than three reporters’ bylines — though it does little more than recycle a meme that bounced around left-wing websites all day Tuesday — the Washington Post darkly warns that the giant retailer has been a member of broad business coalitions pressing various FCPA reforms “that, some advocacy groups argue, would eviscerate the Watergate-era anti-corruption statute.”  “There is no evidence,” the paper is constrained to concede to the disappointment of Some Advocacy Groups, “that suggests Wal-Mart participated in the Chamber’s efforts because of its problems in Mexico.”

The Post notes that the campaign is led by what it bizarrely describes as the U.S. Chamber’s “little-known” Institute for Legal Reform. Yet the Post’s own index indicates that the “little-known” Institute has gotten seven mentions in the paper within the past 12 months, mostly for its advocacy on FCPA reform. Indeed, the Post itself has covered the FCPA debate in some depth over the past year, and its editorialists have ardently defended the law (perhaps “Watergate-era” should serve as some kind of tipoff phrasing.)

It would be one thing if Wal-Mart’s Washington reps had shown some sort of special dislike of FCPA not shared by other American firms that do business in developing countries. But the real story here is how broad and pervasive the discontent with the law is among American businesses with international operations. They consider it unrealistic, incapable of reliable compliance, punitive and constantly changing in its interpretations. Wouldn’t the Post do better to begin listening to them, rather than demonize their efforts to petition Washington for redress?

WalMex and the mordida, cont’d

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).

P.S.: Discussions of Mexico’s lamentable national institution of la mordida — literally, “the bite” — here, here, and here.

Wal-Mart and FCPA

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.

Siccing FCPA on Murdoch?

The financial press has been speculating that the police-payoff scandal that has engulfed some of Rupert Murdoch’s British properties will provide fodder for a U.S. prosecution under the Foreign Corrupt Practices Act. Alison Frankel, Reuters: “In an age of limited resources, I’m not convinced that our government should be bending and twisting the FCPA to make a case against News Corp, however sexy and high-profile that case would be. Remember, just about every FCPA case we’ve seen in the recent flurry of prosecutions has involved alleged bribes of officials in countries with inadequate anti-corruption enforcement systems.” More: Bainbridge.