The kind of man who wants government to adopt and enforce his ideas is always the kind of man whose ideas are idiotic – H. L. Mencken

As the calls for FCPA reform grow louder, I thought it would be timely to examine one of the more significant FCPA reform proposals: Robert W. Tarun and Peter P. Tomczak, Baker & Mckenzie partners authored “A Proposal for a United States Department of Justice Foreign Corrupt Practices Act Leniency Policy,” in which they propose an FCPA Leniency Policy modeled on the Department of Justice’s Antitrust Leniency Policy. While at first glance, there are positive points to their proposal, their proposal fails any rational justification.

Under their proposal, a corporation that self-reports bribery conduct and cooperates before any investigation has begun is eligible for non-prosecution and to receive a 40% cooperation discount off of the minimum fine in the range established by the US Sentencing Guidelines; a corporation that self-reports bribery conduct and cooperates after an investigation has begun remains eligible for non-prosecution and to receive a 20% cooperation discount off of the minimum fine in the range established by the US Sentencing Guidelines; a corporation that has in place at the time of the improper payment activity a rigorous FCPA compliance program – defined to be a compliance program that meets 12 identified criteria expressly set forth in the proposed policy – shall be eligible to receive an additional 20% discount off of the minimum fine in the range established by the US Sentencing Guidelines; and a corporation that provides information leading to the investigation and prosecution of another company or its officers or employees is eligible to receive an additional 20% cooperation discount off of the minimum fine in the range established by the US Sentencing Guidelines. Under the proposed leniency policy, most directors, officers and employees of corporate leniency applicants also are eligible for amnesty.

The Tarun proposal fails on many scores but there are two significant problems.

First, the rationale for the antitrust leniency program is to uncover and prosecute cartel activity, which is defined as joint activity among separate corporations (or actors). By offering leniency to the first or subsequent corporations, there Justice Department is able to reward the cooperating companies but still aggressively enforce the law against other members of the cartel. The Antitrust Division’s program has been very successful in uncovering cartels. Here, there is no similar rationale for rewarding the company which reports bribery. Bribery by its nature is limited to one company seeking an advantage over other companies. There is no joint criminal conduct and no reason to reward one company to prosecute another.

Second, the Tarun proposal is too broad in scope. Maybe they could argue that securing the corporation’s cooperation would help the government in prosecuting individual officers and directors; instead, their proposal they admit that most directors, officers and employees of corporate leniency applicants would be eligible for amnesty.

So who would be left to prosecute? No one. The government gains nothing but agrees to reduced fines, and even non-prosecution of the company for the bribery conduct. H.L. Mencken would be proud. This idea has no legs and no traction. It is time to look at alternatives.