WASHINGTON MERRY-GO-ROUND - Government Crimes and Corporatist Corruption
February 26, 2013
Wal-Mart Bribery Scandal Puts Spotlight on U.S. Anti-Corruption Law
Federal regulators have taken heat for not cracking down enough on Wall Street misdeeds, but Washington’s watchdogs have been baring their teeth plenty when it comes to investigating the business of foreign corruption.
The Foreign Corrupt Practices Act (FCPA) prohibits U.S. companies and individuals from bribing foreign officials to obtain or retain business. Passed in 1977 in the wake of revelations of widespread global corruption, the FCPA was the first statute of its kind in the world.
Now a major Wal-Mart bribery scandal in Mexico has cast a spotlight on the FCPA. The company confirmed last year that it was the subject of investigations by the Justice Department and the Securities and Exchange Commission after a New York Times bombshell investigation reported that Wal-Mart had paid bribes to Mexican officials to open more stores in the country.
A just-published Bloomberg Government Study by Global Business Director Sandy Reback and Quantitative Analyst Miguel Garrido suggests that the Wal-Mart investigation may be part of a longer and larger trend in FCPA enforcement. The study details the growing number of enforcement actions and the increasing size of settlement amounts, as well as the U.S. industries and countries targeted in recent years by the DOJ and SEC. The study also highlights the measures the U.S. government says that businesses can take to prevent and mitigate FCPA liability.
A growing international consensus against corruption has resulted in global anti-bribery pacts such as the OECD Anti-Bribery Convention and the United Nations Convention Against Bribery. American companies should closely monitor these efforts overseas to combat bribery, especially a recent U.K law similar to the FCPA, while following the suggestions of the DOJ and SEC about how to ensure compliance with the FCPA itself.