Financial Transparency Coalition

Guidance Should Satisfy Critics of Government Anti-Bribery Prosecutions

WASHINGTON, DC – Civil society organizations welcomed today’s release of the Department of Justice (DOJ) and Securities and Exchange Commission’s (SEC) new guidance for businesses on the Foreign Corrupt Practices Act (FCPA), the U.S. law that makes it illegal to bribe foreign officials.  The FCPA creates a strong and effective mechanism to fight financial fraud and corruption, which impede economic growth and raise the costs of doing business internationally.

The Guidance brings together for the first time information on the enforcement agencies’ policies and practices on civil and criminal prosecutions, its views on the definition of key terms like “foreign official,” and the benefits to businesses of robust corporate compliance programs.

The organizations are particularly pleased with the DOJ and SEC’s inclusive, consultative process for drafting the guidance.  They held extensive meetings with interested organizations and investors, as well as major companies and industry groups, to discuss their concerns and expectations.  According to Sarah Pray, Senior Policy Analyst at the Open Society Foundations, “The guidance seems like a fair balance between business’s desire for clarity and civil society’s concern that the government avoid hamstringing its own ability to prosecute an offense as complex as international bribery.”

Recent high-profile corruption cases have brought to the forefront the importance of maintaining a robust FCPA. “Bribery takes many forms but is encouraged by a corporate culture of willful ignorance,” said Stefanie Ostfeld, Policy Advisor with Global Witness. “Details have been revealed about how Wal-Mart’s executives allegedly tried to insulate its top management from its subsidiaries’ daily decisions, which allowed it to consolidate its market share through corrupt payments in Mexico and elsewhere.”

Civil society groups contend that the new Guidance renders moot calls from the U.S. Chamber of Commerce’s Institute for Legal Reform, for broad amendments to the FCPA that would weaken key anti-bribery applications.  “The Guidance thoroughly addresses aspects of the law that the U.S. Chamber has described as vague and difficult to translate into everyday business practice,” said Heather Lowe, Legal Counsel & Director of Government Affairs at Global Financial Integrity.  “In light of the content of the Guidance, we can’t see any basis for the Chamber’s attacks on the FCPA to continue.”

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Notes to Editors

1. Click here to read more about the FCPA Guidance from the Department of Justice.
2. Click here to download the FCPA Guidance as a PDF.
3. According to an analysis by congressional staffers of the U.S. Chamber of Commerce’s Institute for Legal Reform tax filings between 2007 and 2010, at least 25% of its board members were affiliated with companies that were reportedly under investigation for violations or had settled allegations that they violated the FCPA.
4. In January, a broad coalition of 33 civil society and business groups, including human rights and anticorruption organizations, sent a letter to every member of the U.S. House of Representatives and U.S. Senate expressing their opposition to any efforts to amend the world’s flagship anticorruption legislation, the U.S. Foreign Corrupt Practices Act (FCPA).

Contact:

Stefanie Ostfeld
Policy Advisor
Global Witness
sostfeld@globalwitness.org
202-577-5858

Clark Gascoigne
Communications Director
Global Financial Integrity
cgascoigne@gfintegrity.org
202-293-0740 x222

Jonathan Kaplan
Communications Officer
Open Society Foundations
jonathan.kaplan@opensocietyfoundations.org
202-654-1009

Katie Shay
Legal and Policy Associate
International Corporate Accountability Roundtable
Katie@accountabilityroundtable.org
202-296-0147

Jonathan Kaufman
Staff Attorney
EarthRights International
jonathan@earthrights.org
617-645-4069