U.S. Chamber of Commerce Calls For Reform of FCPA
By Christopher M. Matthews | October 27, 2010 12:01 am

The U.S. Chamber of Commerce will call for reform of the U.S. Foreign Corrupt Practices Act at a legal conference on Wednesday.

“Restoring Balance,” a paper to be released by the influential business lobby’s Institute for Legal Reform, represents a shot across the bow of the U.S. Justice Department and the Securities and Exchange Commission. It proposes changes to the agencies’ enforcement of the international anti-bribery law, and urges Congress to amend the statute.

The paper will be delivered in connection with a panel on the FCPA at the Institute’s 11th annual Legal Reform Summit, at the Chamber’s Washington, D.C., headquarters. Businesses have expressed increasing concern over the FCPA as the Justice Department and the SEC have ratcheted up their enforcement of the law, levying hundreds of millions in penalties against corporations and indicting senior executives.

The paper also comes a week after a full-throated defense of the Justice Department’s FCPA program by Denis McInerney, the chief of the DOJ’s Criminal Fraud Section. During a speech at an American Bar Association event, McInerney likened objections to the FCPA to the misguided arguments made against the 1985 U.S. sanctions against the apartheid government in South Africa: that American companies would lose business as result and that the government should not regulate international trade.

Andrew Weissmann and Alixandra Smith (Jenner & Block)

In the paper, Jenner & Block LLP partner Andrew Weissmann and associate Alixandra Smith argue that the government’s aggressive FCPA enforcement regime is having a negative impact on American companies doing business in an increasingly globalized world.

“The current FCPA enforcement environment has been costly to business,” the authors wrote. “Businesses enmeshed in a full-blown FCPA investigation conducted by the U.S. government have and will continue to spend enormous sums on legal fees, forensic accounting, and other investigative costs before they are even confronted with a fine or penalty, which, as noted, can range into the tens or hundreds of millions.”

“There is also reason to believe that the FCPA has made U.S. businesses less competitive than their foreign counterparts who do not have significant FCPA exposure,” they added. Weissman is co-chair of the firm’s white collar defense and investigations practice. Both lawyers are based in New York.

A Justice Department spokeswoman declined to comment.

This is not the first time the Justice Department and the Chamber of Commerce have crossed swords. Earlier this decade, the Chamber and a coalition that included the American Bar Association and the ACLU successfully pushed the DOJ to reform a policy that critics said strong-armed companies into waiving the attorney-client privilege by suggesting they otherwise wouldn’t receive credit for cooperating with prosecutors.

The coalition’s efforts were partially responsible for a memo authored by Deputy Attorney General Mark R. Filip in 2008 that prohibited prosecutors from considering privilege waivers as a litmus test for whether a company has been cooperative.

The Chamber previously challenged the Justice Department’s policies on the FCPA in an amicus brief filed in U.S. v. Kay, a case the U.S. Supreme Court ultimately declined to take up.

In their paper, Weissmann and Smith took issue with fact the Justice Department and the SEC retain “the primary statutory interpretive function” with regard to the FCPA, because cases rarely go to trial as corporations are unwilling to take on the substantial risks posed challenging the government’s case.

To mitigate these issues, Weissmann and Smith argue that Congress should amend the FCPA to “make clear what is and what is not a violation.”

“Of course, the solution to this problem is not to do away with the FCPA and permit American companies to engage in bribery alongside their foreign competitors,” the authors wrote. But they added: “The statute should take into account the realities that confront businesses that operate in countries with endemic corruption.”

Specifically, Weissmann and Smith proposed five amendments to the FCPA. They are:

  • Add a corporate compliance defense
  • Limit a company’s “successor liability” for the prior actions of a subsidiary it has acquired 
  • Add a “willfulness” requirement for corporate criminal liability similar to the standard for individuals
  • Limit a company’s liability for acts of a subsidiary
  • Give a clear definition of “foreign official” under the statute

It’s unclear whether Congress would be willing to take up these issues, but business friendly Republicans are expected to make gains in next month’s mid-term elections and possibly take control of the House of Representatives.

When the Chamber and others lobbied to change the law on corporate client-attorney privilege, two bills were introduced in the House and the Senate. Neither made it out of committee, but the Justice Department later bowed to pressure and issued the Filip memo.

Weissmann is scheduled to discuss the paper Wednesday at a panel called “Navigating a Global Marketplace — Foreign Corrupt Practices Act and Potential Reforms,” moderated by Former U.S. Attorney General Michael B. Mukasey.

Also set to appear on the panel are Cheryl J. Scarboro, chief of the SEC’s FCPA unit; former Deputy Attorney General and White & Case partner George J. Terwilliger III; and former Criminal Fraud Section Assistant Chief and Patton Boggs LLP partner John S. (Jay) Darden.

The DOJ’s Criminal Division Chief, Lanny Breuer, is slated to be at an awards ceremony for DOJ employees in Washington’s DAR Constitution Hall on Wednesday and will not appear at the legal reform institute’s panel.

Facebook Twitter Linkedin Email


  1. Check this out…

    [...] that is the end of this article. Here you’ll find some sites that we think you’ll appreciate, just click the links over[...]……

  2. Online Article……

    [...]The information mentioned in the article are some of the best available [...]……

  3. armor games says:

    Websites you should visit…

    [...]below you’ll find the link to some sites that we think you should visit[...]……

  4. tatuaggi says:

    Read was interesting, stay in touch……

    [...]please visit the sites we follow, including this one, as it represents our picks from the web[...]……

  5. sana pan says:

    Related Blogs…..

    [...] consistently a huge addict of backlinking to bloggers that I appreciate but don’t get a lot of link love coming from [...]…

Leave a Comment

You must be logged in to post a comment.

Reed Smith
ANALYSIS: UK Bribery: For Cooperating Companies, Virtue Has At Least Some Rewards more
Barnes & Thornburg LLP
ANALYSIS: “Hide No Harm Act Of 2015” Targets Employers, Directors and Officers more
Sheppard, Mullin, Richter & Hampton LLP
ANALYSIS: The Schrems Decision: How the End of Safe Harbor Affects Your FCPA Compliance Plan more
Clifford Chance
ANALYSIS: Recent trends in anti-corruption enforcement in China more
Paul Hastings LLP
ANALYSIS: U.S. Department of Justice May Leverage "Cooperation Credit" to Obtain Foreign-Based Evidence more
Orrick, Herrington & Sutcliffe LLP
ANALYSIS: There’s a New Sheriff In Town: Coverage for World Bank Investigations and Sanctions more