Foreign Anti-Bribery Law Slammed; House GOP Wants FCPA Changes
By Christopher M. Matthews | June 14, 2011 3:34 pm

Members of a House Judiciary panel are working on legislation to amend the Foreign Corrupt Practices Act, looking at changes they say would “provide greater clarity” to U.S. businesses as they attempt to comply with the foreign anti-bribery law.

Rep. Jim Sensenbrenner (R- Wis.) announced the legislative undertaking Tuesday during a hearing on the FCPA before his subcommittee on crime, terrorism and Homeland Security. Sensenbrenner and the other Republicans on the committee framed the bill as an economic issue — FCPA amendments are needed to provide companies certainty about enforcement so they won’t be risk-averse.

The ranking Democrat on the panel, Rep. Bobby Scott of Virginia, also seemed on board with the legislation, saying that it was “contrary to our system of justice” to punish companies acting in good faith and that there was a “periodic necessity of reviewing our laws.”

Greg Andres, Michael Mukasey, George Terwilliger, Shana Tara-Regon (Christopher M. Matthews/Main Justice)

Greg Andres, Michael Mukasey, George Terwilliger, Shana Tara-Regon. (Christopher M. Matthews/Main Justice)

But a Justice Department official testifying before the committee tried to push back against the steady drumbeat of calls for change during the hearing, which turned testy at times. Sensenbrenner unloaded on Greg Andres, an Acting Deputy Assistant Attorney General in the Justice Department’s Criminal Division, after Andres said that he disagreed with changing the law but would be willing to work with Congress.

“O.K., well the invitation is there,” Sensenbrenner said after cutting Andres off. “We’re going to be drafting a bill. See you later.”

The announcement comes after months of a concerted lobbying effort by the U.S. Chamber of Commerce to amend the FCPA, which prohibits bribes to foreign officials to win business.

The law has become a huge risk for international companies as the government levies penalties worth billions of dollars. The huge fines and soaring costs of corporate internal investigations have irked the U.S. business community, which argues the government’s aggressive enforcement regime is having a negative impact on American companies doing business in an increasingly globalized world.

Sensenbrenner seemed to be taking some of his cues from the influential business lobby, mentioning a number of potential FCPA changes that were contained in a policy paper commissioned by the Chamber in October.

Tuesday’s panel also heard from one of Chamber’s most high-profile lobbyists on the FCPA, former Attorney General Michael Mukasey, who was retained by the Chamber in March. Andres was the law’s only defender among the witnesses, which also included former Deputy Attorney General George Terwilliger and Shana-Tara Regon, the director of white collar crime policy at the National Association of Criminal Defense Lawyers.

Former AG Michael Mukasey confers with the Chamber's Harold Kim. (Christopher M. Matthews/Main Justice)

The fact that Regon, who bashed FCPA enforcement during her testimony, was called by the Democrats seemed emblematic of hearing’s tone. One of the only skeptics of amending the FCPA, was the Judiciary Committee’s ranking Democrat, Rep. John Conyers (D-Mich.). During one heated exchange, Conyers demanded that Regon provide him with specific examples of cases DOJ had brought that involved trivial payments, repeatedly cutting her off.

“Just give me the examples,” Conyers said.

But even the hearing’s lone dissident said he was open to some FCPA amendments. Conyers said he could back the addition of a compliance defense to the law.

He also said he could support narrowing the statute’s broad definition of the “foreign officials” it is illegal to bribe. As the law is interpreted now, even employees of state-owned hospitals abroad are considered “foreign officials,” for example. The definition has fueled a Justice Department anti-bribery investigation of the pharmaceutical industry, in part for its widespread practice of paying travel expenses for doctors to attend conferences and offering them gifts and dinners. Doctors in socialized medical systems often make medical purchasing decisions, and the department may consider overly lavish hospitality to be an attempt to bribe them.

The Chamber’s lobbying effort was jump-started by the paper written in October by Jenner & Block LLP partner Andrew Weissmann for the Institute for Legal Reform, the Chamber’s legal issues arm. Weissmann proposed five specific changes to the FCPA including limiting a company’s “successor liability” to past FCPA violations committed by companies they have acquired, creating an affirmative compliance defense for companies with adequate internal controls, providing more clarity on the definition of a foreign official, limiting a company’s liability for acts of a subsidiary, and creating a corporate willfulness requirement.

After the paper’s release, the Chamber assembled a team of well-connected former Justice Department officials and counsels to the Senate Judiciary Committee  to lobby on the FCPA. The efforts is being supervised by Harold Kim, the Institute’s senior vice president for legal reform initiatives.

The hearing was scheduled at the direction of House Judiciary Committee Chairman Lamar Smith (R-Texas) and comes on the heels of a Congressional staff briefing on the FCPA sponsored by the Chamber in April and a Senate Judiciary Committee hearing on the law in November.

Before Tuesday’s hearing began Kim huddled with Smith’s senior counsel, Sam Ramer, who announced in May the committee’s intent to hold a hearing on the FCPA. Smith was not present at the hearing but Ramer was there throughout, frequently whispering to Republican members.

Andres was accompanied by Criminal Fraud Section Chief Denis McInerney as well as Chuck Duross, the head of the FCPA team.

As the hearing ended, Sensenbrenner hammered home his point to Andres.

“Get the message sir, and tell that to the attorney general,” Sensenbrenner said.

Correction 6/15: The article incorrectly stated that Greg Andres is an Assistant Attorney General. He is the Acting Deputy Assistant Attorney General in the Criminal Division.

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