Politics and the FCPA

politics2The 2014 mid-term elections were over in a snap. Now everyone is focused on the Presidential contest for 2016. After all, the Iowa causes are not very far away.

In the last thirty years, DOJ’s agenda has become more political with each new Administration. For example, the Antitrust Division’s enforcement approach changes with a Republican versus a Democrat President.

In some important areas, however, the difference between Democrat and Republican Administrations has become relatively minor, if anything at all. Given the financial scandals in early 2002 that led to the passage of Sarbanes-Oxley, the Bush Administration aggressively prosecuted white-collar crime. That same attitude continued into the Obama Administration, although some argue that the Obama Administration failed to prosecute high-level officials in the financial industry for the 2008-2009 recession and meltdown.

The Bush and Obama Administrations have been equally vigilant in prosecuting FCPA violations. While the numbers may have increased in the last few years, the Bush Administration was responsible for picking up the statute and reinvigorating FCPA enforcement.

politics4Anti-corruption prosecution is fast becoming a bipartisan issue. While the Chamber of Commerce and other misguided commentators continue to advocate for FCPA reforms, there is little political will to change the FCPA or cut back on its enforcement.

Dick Cassin, the father of the FCPA Blog, is often quoted explaining the reason for this coming together of FCPA enforcement. The Bush Administration viewed FCPA enforcement as a means to reduce the risk that foreign governments would become destabilized from corruption.  In the aftermath of the 9-11 attacks and tragedy, the Bush Administration saw the fight against foreign corruption as an important means protection against new sanctuaries for terrorist organizations.   FCPA enforcement took on an important place in the fight against terrorism.

While the Obama Administration certainly shared the same goal as the Bush Administration, FCPA enforcement was consistent with Democrat ideology to promote human rights and promote developing economies. FCPA enforcement has ramped up, and there is no question that President Obama and Attorney General Holder are committed to fighting corruption.

For practitioners and companies, the coming together of FCPA enforcement means that little is likely to change with any new Administration. FCPA enforcement has taken on a broader role than just in the United States, as the international community has increased corruption prosecutions and cooperation.politics3Politics is an important factor in every aspect of American life. Even under Republican control, Congress is unlikely to cut back on the FCPA statute under the guise of “reform,” and hand the Democrats an easy issue to paint the Republicans as protecting big business interests and promoting corrupt conduct in foreign markets.

In its last misguided FCPA reform effort, the Chamber of Commerce was not able to get very far because no one wanted to be associated with a measure that would appear to permit increased foreign bribery. Nothing has changed in that equation.

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