The article in the url below reports increased efforts by the U.S. Justice Department in recent years to crack down on corporate bribery by U.S. firms across the world:
“The crackdown under the Foreign Corrupt Practices Act, or FCPA -- a post-Watergate law largely dormant for decades -- now extends across five continents and penetrates entire industries, including energy and medical devices.”
Similar to the political environment that gave rise to the FCPA in 1977 (see http://www.corpwatch.org/article.php?id=14859), once again it is the rise in corporate scandals, starting with the Enron scandal around the turn of the century, that is prompting the government to act:
“At least 120 companies are under investigation … up from 100 at the end of last year.”
An interesting component of the article focuses on the “grey areas” of the legislation. Firms complain that the wording of the legislation is so broad (Is paying for a client’s dinner prohibited?) and insensitive to cultural differences (In many countries, token gift-giving is an essential part of the culture.) that it leaves the best-intentioned firms unable to know when they are breaking the law:
“The law prohibits U.S. companies from paying, or offering to pay, foreign-government officials or employees of state-owned companies to gain a business advantage. It covers nonmonetary gifts or offers in addition to cash payments, and is worded broadly enough that it's spawning an army of consultants, some of whom once prosecuted bribery cases for the Justice Department, who offer to interpret the gray areas.”
The article provides details on multiple past investigations by the Justice Department into corporate activities that breached the legislation’s boundaries of acceptable corporate behavior. The financial and reputation costs of a serious transgression are significant:
“A spokesman at Siemens, which paid the largest foreign-bribery fine to date, said the cost of addressing its own corruption allegations was nearly as much as its total fine of 1.22 billion euros ($1.7 billion), including fines to the German government. … A Siemens spokesman said in an email that it's wise for a company "to have an adequate compliance system in place and a corporate culture that stands for clean business."”
Take care
David
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
US Cracks Down On Corporate Bribes
1118 words
The Wall Street Journal
The Wall Street Journal
27 May 2009
