The drumbeat continues for reform.  The Justice Department has bought itself time but is now feeling the pressure on its upcoming guidance.   Do not hold your breath when it comes to the FCPA Guidance.  It will not contain any big surprises — it may restate a lot of the law and the principles of prosecution but it will not reflect any significant changes in the overall enforcement program.

Secretary of State Hillary Clinton’s recent defense of the FCPA confirms that the Administration does not intend to “weaken” the FCPA, either by its guidance or by supporting legislative changes.  With the fortunes of President Obama continuing to rise, DOJ will be even more resistant to such changes.  Secretary Clinton’s recent speech may reflect the State Department’s position against any reform and push back against discussion at DOJ to reform the law or issue guidance which gives some relief to the business community.

As I have noted before, the primary audience for FCPA reform is not on Capitol Hill – legislators are just a means to an end –  which is pressure on the Justice Department.  There is little likelihood that the business community will be able to enact any serious legislative reform to the FCPA, especially in an election year when representatives and Senators are focused more on the election than legislation.  However, the business community has been successful in changing the debate and focusing on the impact such laws have on American businesses.

Larry Thompson, the former Pepsi General Counsel, has unique credibility in this debate given his business role and his position as the former Deputy Attorney General in the Justice Department.  His proposals were reasonable and measured: (1) a safe harbor, post-closing period in which an acquiring company is allowed to review, fix and report any FCPA violations committed by an acquired company before the acquisition; and (2) a compliance defense where the actions of a few violators are contrary to a significant compliance program.

The real issue with respect to corporate criminal liability boils down to the doctrine of respondeat superior.  Based on this doctrine, the actions of a single corporate actor can be imputed to a company despite the overall compliance efforts of the law-abiding corporate actors.    Reform needs to focus on this issue and the impact on businesses.

The debate needs to focus on measured and reasonable issues – not exaggerated arguments on loss of American competitiveness or claims that American businesses cannot compete.  Those arguments are not persuasive.  Practical and common sense solutions to specific problems and issues will, in the end, carry the day.