Source: https://ilr.law.uiowa.edu/print/volume-104-issue-2/conspicuous-prosecution-in-the-shadows-rethinking-the-relationship-between-the-fcpas-accounting-and-anti-bribery-provisions/
Timestamp: 2019-04-20 08:49:39+00:00

Document:
104 Iowa L. Rev. 891 (2019).
This Note argues that the FCPA started with honorable goals, but that it is not working. It is an especially vague statute. Courts have not and will not clarify it because FCPA cases virtually never wind up in open court. Given the lack of judicial oversight, a clear statute with bright-line rules is necessary to put defendants on notice and prevent abuse by prosecutors. While global bribery is a serious problem, the FCPA anti-bribery provisions are imperialist. Rather than helping developing countries hold their leaders accountable for violating domestic bribery laws, the FCPA holds foreign business leaders accountable for violating U.S. laws. In the process, the FCPA imposes American rules and values on foreign countries rather than helping those countries implement their own anti-bribery laws. Along the way, it ensures that wrongdoers abroad pay their penalties to U.S. enforcement agencies not the countries they actually hurt. In so doing, the FCPA achieves none of its goals.
These problems with the FCPA’s anti-bribery provisions cannot be eliminated through amendment. It is impossible to make the provisions’ application to every hypothetical scenario clear. Thus, aggressive prosecutors will always be able to apply these provisions in creative ways—knowing they will never have to defend their applications in court. Rather, the solution begins with repeal of the FCPA’s anti-bribery provisions and ends with passage of a modified accounting requirement—inspired by but independent from the FCPA’s much lower-profile accounting provisions. Instead of generating a windfall for U.S. enforcement agencies, the reported information will be used to empower foreign governments to address bribery within their borders.
Part II of this Note explains the honorable goals behind the FCPA, and how the statute is designed to serve those goals. Part III explains how it is failing those goals as U.S. enforcement agencies exploit flaws in that design. Part IV explains how reformers can repeal the anti-bribery provisions, and pass a modified accounting requirement to bring the FCPA in line with the objectives it was meant to serve. Part V concludes.
The FCPA prohibits “issuers” and “domestic concerns” from making certain foreign corrupt payments.14 The statute defines “issuers” as any company that has stocks registered with the SEC or has to file reports with the SEC.15 It defines “domestic concerns” as U.S. citizens or residents, or companies that are incorporated in the United States or have their principle place of business in the United States16 The FCPA prohibits “other persons” from undertaking any act while in the United States, or through the mail, wires or instrumentalities of interstate commerce, in furtherance of a foreign corrupt payment.17 “Other persons” are any individuals or companies which are not domestic concerns or issuers.18 The FCPA also requires “issuers” to report various financial transactions to the SEC, regardless of their legality.19 This Part explains the history behind its passage, amendments and more recent rise to prominence, and then breaks down the elements of each provision as best understood today.
Endorsed by Republican and Democratic Administrations alike, the FCPA will likely remain a major force in federal criminal law and international business. An assessment of whether the FCPA’s growing enforcement is consistent with Congress’ goals and how the statute might be revised to better achieve those goals is overdue.
This Note focuses on two sections of the FCPA: (1) the anti-bribery provisions; and (2) the accounting provisions. Although not a focus of this Note, this Section also briefly addresses how the FCPA—a mostly criminal statute—can result in civil liability as well.
Unlike the anti-bribery provisions, the FCPA’s accounting provisions apply only to issuers.90 Although the accounting provisions are part of the FCPA, they require issuers to extensively document their financial situations.91 Issuers must “make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.”92 To compel companies to exercise proper supervision and ensure accurate records, issuers must also “devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances” of compliance.93 Thus, while any payment to a foreign government official must be included, all sorts of transactions having nothing to do with the anti-bribery provisions must be reported as well.94 That is because the accounting provisions are about preventing more than just foreign bribery. The accounting provisions empower the SEC to ensure that its accounting requirements provide “for the proper protection of investors and to insure fair dealing in the security”95—a broader goal than just preventing bribery.
This Part argues that crucial sections of the FCPA’s anti-bribery provisions are incredibly vague, and explains why courts have been unable to clarify them. It breaks down the practical consequences that result—both the uncertainties this vagueness creates for business people abroad and the disturbing strategies enforcement agencies use to fill the void. This Part goes on to argue that the FCPA is imperialist.
Some have characterized the FCPA as broad,120 and in some ways it is.121 But the more honest answer is that we do not know whether key sections of the FCPA apply broadly or narrowly. The statute does not tell us. Normally, when a statute (particularly a criminal statute) does not draw bright lines, the courts step in, find what clues they can from the text and legislative history, and draw them for us. That is not happening with FCPA prosecutions. Because of the lack of judicial oversight, and because much of the FCPA is vague enough to leave room for argument, prosecutors can claim that all kinds of foreign payments violate the FCPA when neither the payer nor Congress would have ever expected that. Even when the text, legislative history, or cases suggest a payment does not violate the FCPA, prosecutors can dream up a reason why it does and file charges, knowing they will not have to defend their legal theories in court.122 The data shows prosecutors are frequently doing just that. This is increasingly earning the DOJ and SEC a lot of easy money, and resulting in a number of unfair prosecutions. Perhaps more importantly, it creates incredible uncertainty about what U.S. and even foreign companies can do in foreign countries—making it harder for everyone to do business. This status quo flies in the face of the FCPA’s noble goals.
1. What Is a Foreign Official?
i. What Does “Corruptly” Mean?
United States v. Kay is the best available authority on the FCPA’s two major mens rea requirements.184 If the DOJ and SEC followed it consistently, we would at least know they agreed that the “business purpose test” and “improper advantage” were separate requirements. But we would still be confused about exactly what these requirements mean because Kay is a confusing opinion.185 Its holding states that payments like the defendants’ payments “could (but do not necessarily) come within the ambit of the statute[,]”186 since the payments “can provide an unfair advantage over competitors and thereby be of assistance to the payor in obtaining or retaining business.”187 The Court did little to explain what this holding meant.188 Thus, the business purpose and improper advantage requirements are emblematic of many of the problems with the FCPA in general: The statute is vague. Because cases are resolved out of court, we get few opinions interpreting it. An unhelpful opinion may therefore remain the only authority. And if enforcement officials choose to ignore it, there will be little judicial oversight to stop them.
3. What is a Thing of Value?
4. What Is the Difference Between a Bribe and a Grease Payment?
B. The FCPA Is Imperialist.
The United States established the FCPA because rampant bribery hurt the developing world.218 The United States had an altruistic and vested interest in helping the developing world root out this problem; at the very least, the United States did not want to make it worse.219 FCPA enforcement has exploded in recent years, partly because it yields huge settlements and is relatively easy.220 If foreign bribery mostly harms foreign countries, it makes no sense for the United States to collect the penalty, but that is what happens.221 The bribery is generally illegal in the country where it occurs,222 and that is the country that should get the money from the fine, if any country should.
The DOJ has even gone after corporations after they have been fined for the same conduct by the country where the bribery occurred. In United States v. Statoil, U.S. attorneys prosecuted a Norwegian company that had already been fined for the same acts in the country where the bribe was paid.229 The defendant had already been punished, and the money had gone to the country hurt by the bribery.230 If the conduct had been punished, and the harm to the victim repaired, it is hard to see what motive the DOJ might have had aside from revenue.
Almost every country bans bribery, but not every country views bribery as exactly the same thing. For example, in Confucian countries, gift giving is an essential part of how strangers gradually develop guanxi, which is necessary for the parties to work together and trust each other.238 Not every benefit Americans would consider a bribe is a bribe in China, though some certainly are.239 The written laws affirmative defense240 may be a clumsy attempt to account for this, but it does not work. In few countries (particularly developing ones) is the exact word for word text of the law given quite the same respect it is in America.241 Many developing nations focus much more on common practice and relationships, and the FCPA explicitly says that common behavior in the country is not a defense.242 As is the case in most Confucian societies—even developed ones—“[t]he Chinese legal tradition, under the influence of Confucianism, has emphasized the necessity of integrating legal principles with evolving standards of virtue and morality.”243 An affirmative defense that considers only whether conduct is explicitly allowed by Chinese law (without regard for the culture’s views on “virtue and morality”) does not separate acts that would and would not be considered criminal in China. This cuts both ways: Chinese anti-bribery laws do not contain an exception for grease payments, so it is possible for an act inside China to violate Chinese law without violating the FCPA.244 Whether China chooses to go after bribery within its borders more strictly or more leniently should be a choice for the Chinese government. The FCPA is especially disturbing because it can even apply to a Chinese national bribing a Chinese official in China if the email or phone call routed through America.
It is much easier to make accounting requirements clear than anti-bribery requirements. Legislators have a hard time dreaming up every possible grey area hypothetical for foreign bribery and defining exactly when someone should go to jail in each case. But it is easy to simply require corporations to report all such cases, and corporations should be unafraid to report what they know is not a crime. Thus, Congress should repeal the anti-bribery provisions and apply a modified accounting requirement to all groups currently touched by the anti-bribery provisions. The FCPA’s current accounting provisions apply only to issuers and require them to document a host of transactions having nothing to do with the FCPA.245 Many aspects of this Note’s proposed accounting requirement are inspired by the FCPA’s accounting provisions. Some of the language is verbatim, and the proposal cites where it takes language or ideas from the FCPA’s current accounting provisions. However, this proposed accounting requirement is separate from and does not affect the FCPA’s current accounting provisions, which serve a different purpose and would remain in force. This proposal does however largely repeal the anti-bribery provisions.
(a) This accounting requirement applies to “any issuer which has a class of securities registered pursuant to section 78l of this title or which is required to file reports under section 78o(d) of this title”246 and any domestic concern as defined in section 78dd-2(h)(1) of this title.
“such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants”250 “as the Commission may prescribe”251 if and only if their foreign payments satisfy requirements in Section 2.
Issuers and domestic concerns must report all payments within a single foreign country to that country’s national, state-level or equivalent, or local government; an entity 80% or more owned by these governments; or any employee of the country’s national, state-level or equivalent, or local government or an entity 80% owned by these governments, if the payments together total more than $1,000 in a single year.
Payment in items also count toward the $1,000, but according to the items’ market value (in the country where the payment was received and at the time it was received), not any subjective value the recipient might place on it.
The burden of proof will be on the prosecution to prove the item’s market value at the time and in the country the payment was received, and prosecutors must also prove the defendant intended, knew, should have known or consciously disregarded a risk of the item’s value.
Payments through intermediaries still count toward the $1,000.
(d) The foregoing accounting requirements also bind “other persons,” (as defined in 15 U.S.C. § 78dd-3); however, only certain payments by “other persons” count towards the $1,000.
order an agent to make the payment while inside the United States.
(e) After receiving and processing the information, the Commission shall publish—the payer; the amount of money; the reason for the payment; and the recipient’s information—for all payments that were required to be reported.
The Commission may publish this information on its website or another print or electronic forum of its choice.
2. The payment would not have fallen within the original FCPA’s anti-bribery provisions (as listed in 15 U.S.C. § 78-dd-1–3) because the actus reus or mens rea requirements were not met.
3. If denied, the petitioner may appeal to an administrative law judge. The standard of review is abuse of discretion.
4. Publication may not occur until this process is complete.
(g) The Commission may also opt not to publish information if it views the publication as detrimental to the national security of any country or diplomatic relations between two or more countries, or if it believes publication will endanger anyone’s physical safety.
1. The FCPA anti-bribery provisions as listed in 15 U.S.C. § 78-dd-1–3 are hereby repealed, except for the purposes of assessing petitions for redaction or nonpublication and for definitional purposes as listed in the foregoing paragraphs.
2. The FCPA’s original accounting provisions (which apply only to issuers) as listed in 15 U.S.C. § 78(m) are separate from and unaffected by this proposed statute. We hereby reaffirm that those accounting provisions serve a wide range of goals such as “the proper protection of investors and to insure fair dealing in the security”256 whereas this proposed statute serves a narrower purpose of providing for transparency in foreign payments to government officials. This proposed statute applies to a broader swath of defendants than 15 U.S.C. § 78(m), but also imposes much narrower reporting requirements.
This proposal addresses many of this Note’s criticisms of the FCPA. It eliminates the need to determine what a “thing of value” is by substituting a bright-line test of $1,000 per year. It requires reporting of payments over $1,000, regardless of whether they meet the “corruptly,” business purpose or improper advantage requirements, fall within the grease payment exception or either affirmative defense—eliminating the need to interpret those vague provisions. This proposal also addresses the need for a de minimus exception with the $1,000 requirement. Aggregating the payments keeps defendants from making an end-run around the accounting requirement through a series of small payments.
The proposal eliminates the need to diagnose whether someone is a foreign official. It makes who qualifies as a covered recipient clearer by specifying that the recipient must either be the government or an entity 80% or more owned by the government. It eliminates the need to debate whether a nongovernment entity can qualify—now federal enforcement officials will have clear legal authority to go after SoEs with 80% or more ownership—and no basis to claim they can go after any other SoE. The proposal may still seem overbroad—particularly because a low-level government employee could still qualify as a covered recipient if the payment was large enough. But narrowing which types of employees qualify would introduce too much ambiguity and case-by-case analysis, which is exactly what this proposal seeks to eliminate. The good news is that a payment to a janitor at an 80% government owned entity will at most require disclosure. It will not be criminal so long as it is disclosed.
The caveats in section (d) of this proposal are designed to cabin the scope of the new FCPA’s application to “other persons.” It seems unlikely that Congress ever foresaw transactions occurring completely outside the United States and involving only foreigners to fall within the purview of the FCPA, just because an email or wire transfer routed through the United States.257 The proposed requirement that the payer either make the payment while in the United States, order the payment while in the United States, or order someone inside the United States to make the payment limits application to payments that involve the United States.
This proposal addresses the issue of imperialism because it favors transparency over intervention. Provided corporations disclose, the United States will not be able to prosecute or sue companies for engaging in foreign bribery. However, it will have handed the evidence to the country where the bribe occurred on a silver platter. Since the FCPA was based on the idea of protecting the American image abroad and helping the developing world rid itself of bribery, this tremendous favor to those countries will be more helpful and reflect better on America than the status quo, where the United States takes the money. Rather than imposing American views about bribery on the other country, the country will now get to decide for itself whether to prosecute. The information will be publicly available, however, so if the people of the country view a certain act as a bribe, the government will be under pressure to prosecute. Rather than elite U.S. lawyers parsing the difference between a grease payment and a bribe, the people of the countries where the bribes occur will now decide whether the payment was a bribe according to their values. And the money from any judgment will go to the country that was hurt by the bribe rather than to the United States.
The FCPA started with laudable goals. Foreign bribery hinders development and reflects badly on the United States when our companies engage in it. The problem is that it is hard to prevent enforcement of such a statute from becoming arbitrary, and arbitrary it has become. Enforcement agencies are exploiting the FCPA in a way that is unfair to corporations and to foreign countries and individuals. Such an anti-bribery statute is no longer necessary. In today’s globalized world where publicly available information travels so fast from one corner of the world to another, the United States no longer needs to be the investigator, jury and judge as to what kinds of payments abroad should be allowed. From here on out, it will be enough to just be the investigator, provide the information, and let the foreign governments decide what to do inside their own borders.
. Mike Koehler, The FCPA’s Record-Breaking Year, 50 Conn. L. Rev. 91, 105 (2018).
. See id. at 98.
. Id. at 120–21. Under the foreign official requirement, the recipient of the bribe must generally be a foreign government official, foreign political party or candidate to fall within the scope of the FCPA. See infra text accompanying note 124.
. Koehler, supra note 1, at 111.
. See infra note 201 and accompanying text.
. Press Release, S.E.C., JPMorgan Chase Paying $264 Million to Settle FCPA Charges (Nov. 17, 2016), https://www.sec.gov/news/pressrelease/2016-241.html.
. Koehler, supra note 1, at 126–27.
. Id. at 129–30 (citing United States v. Tavares, 844 F.3d 46, 54–55 (1st Cir. 2016)).
[M]y father was New York state comptroller . . . . [Y]es, I probably got at least one or two jobs as a result of knowing people, including my first job as a trainee for Life magazine. But according to financial regulators now looking into the hiring practices of major U.S. banks and multinationals in China—some of which have employed members of influential Chinese families—anyone who once hired me might have been violating ethical and legal standards. Securities and Exchange Commission regulators now suggest that such hiring overseas is a form of untoward influence, akin to bribing foreign officials to win business. The accusation is scurrilous and hypocritical. If you walk the halls of any institution in the U.S.
—Congress, federal courthouses, large corporations, the White House, American embassies and even the offices of the SEC—you are likely to run into friends and family members of powerful and wealthy people.
Arthur Levitt, ‘Influence Peddling’ Makes the World Go Round, Wall St. J. (Dec. 25, 2013, 3:55 PM), https://www.wsj.com/articles/8216influence-peddling8217-makes-the-world-go-round-1388004902.
. Koehler, supra note 1, at 99.
. See infra Section II.C.1.
. See infra Section II.C.1.a.
. See infra Sections II.C.1.a–b.
. See infra Section II.C.2.
criminal-fraud/legacy/2010/04/11/houseprt-95-640.pdf (“More than 400 corporations have admitted making questionable or illegal payments. The companies, most of them voluntarily, have reported paying out well in excess of $300 million in corporate funds to foreign government officials, politicians, and political parties. These corporations have included some of the largest and most widely held public companies in the United States; over 117 of them rank in the top Fortune 500 industries.”).
. U.S. Dep’t of Justice, supra note 20, at 3.
. Id.; see also H.R. Rep. No. 95-640, at 5 (“Bribery of foreign officials by some American companies casts a shadow on all U.S. companies. The exposure of such activity can damage a company’s image, lead to costly lawsuits, cause the cancellation of contracts, and result in the appropriation of valuable assets overseas.”).
. Mike Koehler, The Story of the Foreign Corrupt Practices Act, 73 Ohio St. L.J. 929, 949 (2012) (“[I]t’s to the great interest of every country that the people who sell to them don’t bribe. Now if [the United States] ha[s] a reputation of being the one country that enforces the law and everything that we sell is sold on the basis of merit and competition and not on the basis of bribery, ... that’s an enormous advantage [to the United States].” (quoting Senator Proxmire, Foreign and Corporate Bribes: Hearings Before the Sen. Comm. on Banking, Hous., and Urban Affairs, 94th Cong. 63 (1976))).
. Koehler, supra note 26, at 930.
. U.S. Dep’t of Justice, supra note 20, at 7.
. Organization of Economic Cooperation and Development, Convention on Combating Bribery of Foreign Public Officials in International Business Transactions art. 1, May 23, 1997, C(97)123/FINAL (“Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.”).
. See U.S. Dep’t of Justice, supra note 20, at 4.
. See id. (expanding the group of potential defendants to include foreign persons was likely the most significant change).
. See infra notes 70–73 and accompanying text.
default/files/criminal-fraud/legacy/2012/11/14/signing.pdf (“The United States has led the effort to curb international bribery. We have long believed bribery is inconsistent with democratic values, such as good governance and the rule of law. It is also contrary to basic principles of fair competition and harmful to efforts to promote economic development ... . We will continue our leadership in the international fight against corruption.”).
. DOJ and SEC Enforcement Actions, Stan. L. Sch., http://fcpa.stanford.edu/statistics-analytics.html (last visited Oct. 26, 2018); see also Joseph W. Yockey, Solicitation, Extortion, and the FCPA, 87 Notre Dame L. Rev. 781, 782 (2011) (“The ... DOJ ... recently said that enforcing the FCPA ... is now its top priority—‘second only to fighting terrorism.’” (quoting Chris Colbridge, New Bumps and Tolls Along the Road to FCPA Settlements, Kirkland & Ellis LLP: Client Info. (Nov. 1, 2009), https://www.kirkland.com/sitecontent.cfm?contentID=223&itemId=2929)).
. DOJ and SEC Enforcement Actions, supra note 35.
. Carol A. Poindexter et al., Trends in Federal White Collar Prosecutions, W.L. Practical Law Practice Note 9-503-0747, at 20 (2016).
. Michael Kendall & Kevin Bolan, Criminal Defense: White-Collar, U.S. News & World Rep., http://bestlawfirms.usnews.com/criminal-defense-white-collar/overview (last visited Oct. 26, 2018).
. See Charles D. Weisselberg & Su Li, Big Law’s Sixth Amendment: The Rise of Corporate White-Collar Practices in Large U.S. Law Firms, 53 Ariz. L. Rev. 1221, 1236 (2011); see also Joe Palazzola, FCPA Inc: The Business of Bribery—Corruption Probes Become Profit Center for Big Law Firms, Wall St. J. (Oct. 2, 2012), https://www.wsj.com/articles/SB10000872396390443862604578028462294611352 (“The [FCPA] has become big business for the lawyers who delve into the operations of companies in response to an investigation bytheJustice Department andtheSecurities and Exchange Commission—or to avoid one.Theresult is a mini-industryofinvestigators and white-collar criminal-law practices ... .”).
10/09/trump-v-obama-u-s-sec-anti-corruption-enforcement-actions-scorecard (last visited Oct. 26, 2018) (showing that FCPA enforcement is down so far under the Trump Administration notwithstanding Attorney General Session’s statement, but noting that it is too early to know whether that represents an actual policy shift).
(B) inducing such foreign official, political party, party official, or candidate to use his or its influence with a foreign government or instrumentality thereof to affect or influence any act or decision of such government or instrumentality, in order to assist such issuer in obtaining or retaining business for or with, or directing business to, any person.
. 15 U.S.C. §§ 78dd-1(c) to 78dd-3(c).
. Id.; O’Sullivan, supra note 45, at 531.
. 15 U.S.C. § 78l; id. § 78o(d).
. Id. §§ 78dd-1 to 78dd-3.
. See, e.g., United States v. MacAllister, 160 F.3d 1304, 1307 (11th Cir. 1998) (“The general rule is that a conspiracy to violate the criminal laws of the United States, in which one conspirator commits an overt act in furtherance of that conspiracy within the United States, is subject to prosecution in the district courts.”); United States v. Winter, 509 F.2d 975, 982 (5th Cir. 1975) (“The case law clearly establishes that the District Court has jurisdiction over a conspiracy and all those proved to be conspirators if the conspiracy is designed to have criminal effects within the United States and if there is sufficient proof that at least one of the conspirators committed an overt act in furtherance of the conspiracy within the territorial jurisdiction of the District Court.”).
. Winter, 509 F.2d at 982.
. 15 U.S.C. § 78dd-1(a)(3).
. O’Sullivan, supra note 45, at 532.
. 15 U.S.C. § 78dd-1(a).
. See supra notes 53–54 and accompanying text.
. E.g., United States v. MacAllister, 160 F.3d 1304, 1307 (11th Cir. 1998); United States v. Winter, 509 F.2d 975, 982 (5th Cir. 1975).
. 15 U.S.C § 78dd-1(a).
. See O’Sullivan, supra note 45, at 535.
. See id.; Mike Koehler, Grading the Foreign Corrupt Practices Act Guidance, White Collar Crime Rep. at 4–5 (2012), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2189072.
. See 15 U.S.C. § 78dd-1(a)(1)–(3); United States v. Kay, 359 F.3d 738, 755–56 (5th Cir. 2004); Koehler, supra note 67, at 5.
. 15 U.S.C. § 78dd-1(a)(1)–(3); Kay, 359 F.3d at 755–56.
. See Kay, 359 F.3d at 755–56.
. See supra note 30 and accompanying text.
. See Kay, 359 F.3d at 753–55; Koehler, supra note 67, at 5.
. U.S. Dep’t of Justice, supra note 20, at 14.
litigation/litreleases/lr19023.htm (announcing defendant accepted responsibility and signed a DPA although it never received any benefit from the alleged bribe).
. See U.S. Dep’t of Justice, supra note 20, at 14.
. An exception is not an affirmative defense. Although the exact definition of a grease payment is unclear, the government must prove beyond a reasonable doubt that the alleged bribe was not a grease payment. See Kay, 359 F.3d at 749.
. 15 U.S.C. § 78dd-1(b) (2012).
. U.S. Dep’t of Justice, supra note 20, at 25.
. 15 U.S.C. § 78dd-1(c).
default/files/criminal-fraud/legacy/2010/04/11/tradeact-100-418.pdf (“The Conferees wish to make clear that the absence of written laws in a foreign official’s country would not by itself be sufficient to satisfy this defense.”).
. Aaron G. Murphy, The Migratory Patterns of Business in the Global Village, 2 N.Y.U. J.L.
& Bus. 229, 240 (2005) (“[B]ecause this defense only acknowledges ‘written laws,’ it excludes any customs, norms, or other informal ‘rules’ of behavior that might operate in a given society.”).
. 15 U.S.C. § 78dd-1(c)(2).
. Id. § 78dd-2(g)(2)(A); id. § 78dd-3(e)(2)(A).
. Id. § 78dd-2(g)(2)(A); id. § 78dd-3(e)(2)(A); id. § 78ff(c)(2)(A).
. U.S. Dep’t of Justice, supra note 20, at 38.
(ii) transactions are recorded as necessary (I) to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and (II) to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences . . . .
. 15 U.S.C. § 78m(b)(2)(A).
. Id. § 78(m)(b)(2)(A); U.S. Dep’t of Justice, supra note 20, at 39–42.
. 15 U.S.C. § 78m(a).
. U.S. Dep’t of Justice, supra note 20, at 44–45.
. 15 U.S.C. § 78ff(a); U.S. Dep’t of Justice, supra note 20, at 68.
. O’Melveny & Myers LLP, Foreign Corrupt Practices Act: An O’Melveny Handbook 28–29 (7th ed. 2013).
. U.S. Dep’t of Justice, supra note 20, at 43.
. 15 U.S.C. § 78m(b)(6).
. U.S. Dep’t of Justice, supra note 20, at 45.
just-because-the-fcpa-is-not-commonly-the-subject-of-litigation-does-not-create-a-substantial-federal-interest-in-state-law-claims-related-to-the-fcpa.aspx; see also Mike Koehler, Foreign Corrupt Practices Act Ripples, 3 Am. U. Bus. L. Rev. 391, 392–93 (2014) (“[S]ettlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement in this new era.” Expenses include “(i) pre-enforcement action professional fees and expenses; (ii) settlement amounts in an actual FCPA enforcement action; and (iii) post-enforcement action professional fees and expenses . . . . FCPA scrutiny and enforcement can further negatively impact a company’s business operations and strategy in a variety of ways from: market capitalization; to cost of capital; to merger and acquisition activity; to impeding or distracting a company from achieving other business objectives; to private shareholder litigation; to offensive use of the FCPA by a competitor or adversary to achieve a business objective or to further advance a litigating position.”).
. 15 U.S.C. § 78dd-2(g)(l)(B); id. § 78dd-3(e)(l)(B); id. § 78ff(c)(2)(C).
. Securities Exchange Act § 21B(b) (1934) (codified at 15 U.S.C. § 78u-2(b)(3)).
. Murphy, supra note 85, at 244.
. See infra Sections III.A.1–4.
. Mike Koehler, The Façade of FCPA Enforcement, 41 Geo. J. Int’l L. 907, 932 (2010).
https://www.c-span.org/video/?c4618539/andrew-weissmann-fcpa (“The grayness of a statute that is enforced against corporations is particularly heinous because there’s no way to actually have that litigated as a realistic matter.”).
. See Koehler, supra note 67, at 1.
. Id. (“[T]he Guidance is an advocacy piece and not a well-balanced portrayal of the FCPA as it is replete with selective information, half-truths, and, worse, information that is demonstratively false ... . [D]espite the Guidance, much about FCPA enforcement remains opaque.”).
003239.pdf; Michael B. Mukasey & James C. Dunlop, Can Someone Please Turn on the Lights? Bringing Transparency to the Foreign Corrupt Practices Act, 13 Fed. Soc. Crim. L. & Proc. 30, 32 (2012); Mike Koehler, Recent DOJ Statements at Issue in Carson “Foreign Official” Challenge, FCPA Professor (May 6, 2011), http://fcpaprofessor.blogspot.com/2011/05/recent-doj-statements-at-issue-in.html.
. See U.S. Dep’t of Justice, supra note 20, at 29.
. See infra notes 163–66 and accompanying text.
. 15 U.S.C. § 78dd-1(f)(1)(A) (2012).
. Yockey, supra note 35, at 820.
. See John Walton et al., Map: Which Country Pays the Most Bribes?, BBC (July 9, 2013), http://www.bbc.com/news/business-23231318.
. See Mike Koehler, The Foreign Corrupt Practices Act Under the Microscope, 15 U. Pa. J. Bus. L. 1, 41 n.139 (2012).
. PWC, State-Owned Enterprises: Catalysts for Public Value Creation? 6 (2015); see also id. at 4 (“SOEs ... appear to be an enduring feature of the economic landscape and will remain an influential force globally for some years to come.”).
. Murphy, supra note 85, at 244–45.
. Beverley Earle & Anita Cava, When Is a Bribe Not a Bribe?: A Re-Examination of the FCPA in Light of Business Reality, 23 Ind. Int’l & Comp. L. Rev. 111, 112 (2013).
. Mukasey & Dunlop, supra note 119, at 32 (“Both DOJ and the SEC consider all employees of an instrumentality—regardless of their position—‘foreign officials.’ This means that, in theory, payments to low-level employees (such as clerks, purchasing staff, spec writers) at an entity in which a foreign government has partial—even minimal—ownership could result in FCPA liability.”).
. Sundar Narayanan, Is Your Next Compliance Problem at a Toll Booth inDelhi?, FCPA Blog (Jan. 20, 2016, 9:28 AM), http://www.fcpablog.com/blog/2016/1/20/sundar-narayanan-is-your-next-compliance-problem-at-a-toll-b.html.
. See id. (explaining why Indian toll collectors as contractors likely qualify as foreign officials and why payments to them probably would not be protected as grease payments).
. Mike Koehler, The “Foreign Officials” of 2014, FCPA Professor (Jan. 14, 2015), http://fcpaprofessor.com/the-foreign-officials-of-2014.
. See, e.g., id.; Mike Koehler, 11th Circuit “Foreign Official” Decision—Perspective Including as to the Court’s Flawed Reasoning, FCPA Professor (June 12, 2014), http://fcpaprofessor.com/11th-circuit-foreign-official-decision-perspective-including-as-to-the-courts-flawed-reasoning (explaining that the Eleventh Circuit focused on pre-enactment rather than enacting legislative history in allowing SOEs to qualify as instrumentalities under certain circumstances).
. See 15 U.S.C. § 78dd-l(f) (2012).
. United States v. Liebo, 923 F.2d 1308, 1312 (8th Cir. 1991); Robert W. Tarun, Basics of the Foreign Corrupt Practices Act: What Every General Counsel, Transactional Lawyer and White Collar Criminal Lawyer Should Know 4 (2006).
. Liebo, 923 F.2d at 1310.
. Id.; see Steven R. Salbu, Bribery in the Global Market: A Critical Analysis of the Foreign Corrupt Practices Act, 54 Wash. & Lee L. Rev. 229, 270 (1997).
. Salbu, supra note 149.
. See supra Section II.C.1.iii.
. See 15 U.S.C. § 78dd-1 (2012); supra Section II.C.1.iii.
. See supra notes 71–72 and accompanying text.
. See 15 U.S.C. § 78dd-1.
. See O’Sullivan, supra note 45, at 532.
. See infra notes 165­–66 and accompanying text.
. Koehler, supra note 67, at 5.
. United States v. Kay, 359 F.3d 738, 743 (5th Cir. 2004).
. Id.; U.S. Dep’t of Justice, supra note 20, at 4.
. Koehler, supra note 67, at 5; U.S. Dep’t of Justice, supra note 20, at 4.
. Mike Koehler, FCPA Guidance Rewrites the FCPA, FCPA Professor (July 16, 2013), http://fcpaprofessor.com/fcpa-guidance-rewrites-the-fcpa.
. Id. (quoting U.S. Dep’t of Justice, supra note 20, at 92).
. See 15 U.S.C. § 78dd-1 (2012); Koehler, supra note 172; supra Section II.C.2.ii.
. Koehler, supra note 172.
. See supra notes 160–62 and accompanying text.
4106e9be4c1954&a=b11eedc840b3164050e7efa3efd6bc0d (“In several cases ... such as Pride International and Tidewater, the connection of the alleged conduct to ‘obtaining or retaining business,’ a critical element of the statute was not pleaded or, worse, was pled in a way that suggests that virtually any bribe that improves a company’s profitability is sufficient—a result that is not consistent with established precedent and the language of the statute.”).
. Id. at 14 (quoting Indictment at 19, United States v. Pride Int’l, Inc., No. 4:10-cr-766 (S.D. Tex. 2010), https://www.justice.gov/archive/opa/documents/pride-intl-info.pdf).
. Id. (citing Noble Non-Prosecution Agreement, DOJ and Noble Corp. (Nov. 4, 2010), at *A-1, https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2011/02/16/11-04-10noble-corp-npa.pdf).
. Id. at 14 n.4.
. Id. at 15 (“[I]n Alliance One, the DOJ explicitly tied bribes of tax inspectors who had ‘threatened to shut down’ one of the company’s subsidiaries, stating that the purpose of the bribes was ‘to influence the acts and decisions of the Kyrgyz Tax Inspection Police and to secure DIK’s continued ability to conduct its business in Kyrgyzstan.’ It is thus not clear whether the government views all payments to reduce taxes as being ‘to assist in obtaining or retaining business,’ an interpretation contrary to Kay, or whether these particular reductions in taxes have some clear connection, not set out in the pleadings, to obtaining or retaining business under a more common understanding, e.g., a contract, a project, or a sale.”).
. See Press Release, U.S. Dep’t of Justice, Oil Services Companies and a Freight Forwarding Company Agree to Resolve Foreign Bribery Investigations and to Pay More Than $156 Million in Criminal Penalties: SEC and Companies Agree to Civil Disgorgement and Penalties of Approximately $80 Million (Nov. 4, 2010), https://www.justice.gov/opa/pr/oil-services-companies-and-freight-forwarding-company-agree-resolve-foreign-bribery.
. See supra notes 163–69 and accompanying text.
. See Irvin Nathan, Is Bribing Foreign Tax Collectors a Federal Crime? The Fifth Circuit Says Maybe Yes, Maybe No, 11 Bus. Crimes Bull. 1, 4 (2004) (“The decision leaves American companies and their counsel at sea as to whether or not certain types of payments to foreign officials violate the statute.”).
. United States v. Kay, 359 F.3d 738, 740 (5th Cir. 2004).
. 15 U.S.C. § 78dd-1 (2012).
. Koehler, supra note 113, at 914–15.
. See id. at 914.
. See id. at 914–15.
. See U.S. Dep’t of Justice, supra note 20, at 14–15.
. Foreign Corrupt Practices Act: Hearing Before the Subcommittee on Crime, Terrorism, and Homeland Security of the Committee on the Judiciary of the House of Representatives, 112th Cong. 56–57 (2011).
. Id.; see also Koehler, supra note 1, at 93 (“FCPA enforcement in 2016 was ... notable given the wide spectrum of enforcement actions. For instance, there were FCPA enforcement actions ... that alleged egregious instances of corporate bribery executed at the highest levels of a company, as well as enforcement actions finding bribery based on allegations of ‘golf in the morning and beer-drinking in the evening’ and internship and hiring practices.”).
. Earle & Cava, supra note 137, at 148–49.
. See supra notes 77–81 and accompanying text.
. 15 U.S.C. § 78dd-2 (2012).
. H.R. Rep. No. 95-640, at 8 (1977), https://www.justice.gov/sites/default/files/criminal-fraud/legacy/2010/04/11/houseprt-95-640.pdf; U.S. Dep’t of Justice, supra note 20, at 25.
. Salbu, supra note 149, at 265–66.
. See id. at 266–67.
... . Middlemen sell speed. They provide access to government officers who can sign off on permits as soon as they are paid.”).
. See Salbu, supra note 149, at 266–67.
. Elizabeth K. Spahn, Repeal the Facilitation Payment Loophole, FCPA Blog (April 26, 2012, 1:28 AM), http://www.fcpablog.com/blog/2012/4/26/repeal-the-facilitation-payment-loophole.html.
5 Va. L. & Bus. Rev. 33, 63 (2010).
. Id. at 63–64; see also Yockey, supra note 35, at 819 (“Some ... challenged payments were made to schedule pre-shipping product inspections and to have certificates of delivery issued for certain products. Because the matter ultimately settled through a non-prosecution agreement and no formal charging document was ever filed, the DOJ’s theory as to why the latter payments did not fall within the facilitation payment exception remains unclear. If the payments were made simply to have certificates of delivery issued or to schedule inspections, those acts would seemingly qualify as ‘routine governmental actions.’”).
04/business/global/bribery-settlements-under-us-law-are-mostly-with-foreign-countries.html (“Many of these are ‘cash cow’ cases for Justice ... . It’s a government program that is profitable to the U.S. Treasury.” (quoting Mike Koehler)); supra Part I; supra Sections II.B & III.A.
. See Wayne, supra note 220.
sites/alexandrawrage/2017/01/25/bribery-is-bad-for-business (“[B]ribery is illegal everywhere.”).
. Brandon L. Garrett, Too Big to Jail: How Prosecutors Compromise with Corporations 219 (2014).
. Wayne, supra note 220.
. Garrett, supra note 223, at 220.
. Id. at 219–20 (“Only about one-fifth of the deferred prosecution and non-prosecution agreements involved foreign companies ... . And of the foreign companies prosecuted between 2001 and 2012, [not only for FPCA violations though that is one of the top crimes they are prosecuted for] less than one-fifth received deferred prosecution or non-prosecution agreements ... .”).
. 15 U.S.C. § 78dd-3(a), (f)(1) (2012).
. Id.; see Thomas J. Bussen, Midnight in the Garden of Ne Bis In Idem: The New Urgency for an International Enforcement Mechanism, 23 Cardozo J. Int’l & Comp. Law 485, 488–89 (2015).
. See Bussen, supra note 232, at 488–89.
. Elizabeth Chang & Chris Alcantara, Northern Virginia, Center of the (Data) World, Wash. Post (July 5, 2017), https://www.washingtonpost.com/apps/g/page/lifestyle/northern-virginia-center-of-the-data-world/2226.
. Bussen, supra note 232, at 497–98.
. Richard L. Cassin, The Long, Strong Arm of the FCPA, FCPA Blog (Aug. 27, 2007, 1:45 AM), http://www.fcpablog.com/blog/2007/8/27/the-long-strong-arm-of-the-fcpa.html (quoting U.S.A.M., 9 Criminal Resource Manual § 1018 (2000)).
. See Warin et al., supra note 214, at 37–38.
. See supra Section II.C.1.iv.
. See e.g., Richard D. Lewis, When Cultures Collide: Leading Across Cultures 5 (2006) (“As the globalization of business brings executives more frequently together, there is a growing realization that if we examine concepts and values, we can take almost nothing for granted. The word contract translates easily from language to language, but like truth, it has many interpretations. To a Swiss, Scandinavian, American or Brit, a contract is a formal document that has been signed and should be adhered to. Signatures give it a sense of finality. But a Japanese businessperson regards a contract as a starting document to be rewritten and modified as circumstances require. A South American sees it as an ideal that is unlikely to be achieved but that is signed to avoid argument.” (emphasis omitted)); id. at 173 (“Italian flexibility in business often leads Anglo-Saxons to think they are dishonest. They frequently bend rules, break or get around some laws and put a very flexible interpretation on certain agreements, controls and regulations. There are many gray areas where shortcuts are, in Italian eyes, a matter of common sense.”); Rob Gifford, China Road: A Journey into the Future of a Rising Power 34 (2008) (“Tintin laughs, as if to say ‘who cares?’ and we talk about how practical and unideological the Chinese are. I tell them of the time I visited a racetrack outside Beijing where people were clearly placing bets on horses ... . I thought I would give it a try too, so I approached what looked like the betting window and said that I would like to place a bet. The woman told me that I couldn’t place a bet (betting is illegal in China, she confirmed), but if I wanted to, I could place a guess on one of the horses ... . So I put down twenty yuan ... and stood cheering the horse on, hoping that my guess would win me some money.”).
. See Murphy, supra note 85, at 228–29.
. See id. at 240.
. Warin et al., supra note 214, at 64.
. See supra Section II.C.2.
. “The term ‘Commission’ means the Securities and Exchange Commission... .” Id.
. See supra Section III.B.

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