The Half-Full Glass Has a Leak

May 27th, 2011

If you read my posts, you might be aware that when it comes to bribery and corruption I am often skeptical and even more frequently condemnatory. But I also try to give credit where it’s due. Despite my criticisms and my often snarky tone, my message is one of guarded optimism. I am optimistic in the face of the shortcomings and the outright failings of our international systems because I see a positive trajectory. More trials of foreign bribery, more exposures of government corruption, and [even] more revelations of dictator’s deposits in foreign banks are all good signs. Of course they are not good things, but rather they show that the international community is seriously talking about these issues, not leaving them hidden and tacitly accepted. These problems are far from solved—and I would love to see fewer reports of all of these evils—but they are signs that we are moving forward.

Today I am confronted with a new sign; however, one which I hope is not part of a larger trend. First a little background.

For several months now, the U.S. Chamber of Commerce, which is one of the largest lobbying groups in this country, has been pressuring Congress to weaken the Foreign Corrupt Practices Act (FCPA), which makes it illegal for U.S. companies to pay bribes to foreign officials. The Chamber has even retained former U.S. Attorney General Michael Mukasey to help them.  According to a compelling article by Raymond Baker, the Chamber’s requests include (among many others) giving “subsidiaries of multinational companies a loose rein” with the FCPA so that the actions of a foreign subsidiary should not expose the parent company to liability. Socially-conscious shareholders at some of largest U.S. corporations—including IBM and Pepsi— are loudly contesting their firms’ involvement in the effort, yet the Chamber continues to plow forward.

Over to the UK. In the spring of last year, the United Kingdom passed the Bribery Act of 2010, which the Ministry of Justice hoped would “provide a new…scheme of bribery offences that will enable courts and prosecutors to respond more effectively to bribery.” Heather Lowe, Legal Counsel and Director of Government Affairs at Global Financial Integrity, called the legislation “iron-clad.” But then the UK Ministry of Justice released the Guidance to the Bribery Act, intended to “explain the policy,” but effectively undermining it. Succumbing to pressure from UK corporations, the Guidance weakens the initial legislation by sending a clear message to businesses that they shouldn’t fear prosecution under the Act unless their bribes are of a significantly large sum.

Okay so back to the sign. This week Transparency International (TI), the anti-corruption watchdog, released its seventh annual Progress Report on Enforcement of the OECD Convention. The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (yep, it’s a mouthful) requires each of its 38 signatory nations to make foreign bribery a crime. TI’s annual progress report provides an “independent assessment of the status of OECD enforcement” and classifies countries into three categories based on the level of enforcement of anti-bribery laws.

For the first time in the history of TI publishing this report, no country moved up in category. This is more significant than it might superficially sound. The key to international effort against any challenge is momentum. And as TI accurately notes, this report is a warning that “could signal a dangerous loss of momentum in the fight against corruption.”

This moment is critical. As the cases in the UK and the U.S. show, major developed countries are under enormous pressure from private interests to stall—or even back off—forward progress against foreign bribery. This would be a devastating loss for the world. The work is not done yet. We can remain guardedly optimistic as long as we continue to see forward progress. Anything less is unacceptable.

Written by Ann Hollingshead

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