After Decades, U.S. Bares Teeth of Bribery Law ; Anti-Corruption Act Gets New Attention with Case of Wal-Mart in Mexico

By Savage, Charlie | International Herald Tribune, April 27, 2012 | Go to article overview

After Decades, U.S. Bares Teeth of Bribery Law ; Anti-Corruption Act Gets New Attention with Case of Wal-Mart in Mexico


Savage, Charlie, International Herald Tribune


Allegations that Wal-Mart Stores suppressed an internal inquiry into bribery in Mexico in 2005 have put renewed attention on how enforcement of the U.S. Foreign Corrupt Practices Act has changed.

A decade ago, the U.S. Foreign Corrupt Practices Act, which bars companies in the United States from bribing officials overseas, was rarely enforced or discussed. Today, it strikes fear in the executive offices of companies with overseas operations, generating huge fees for law firms and large fines for the U.S. government.

The transformation of the once-obscure law has been thrown into sharp relief by the allegations that one of the world's largest companies, Wal-Mart Stores, had suppressed an internal inquiry into bribery in Mexico in 2005. After details of the case were reported by The New York Times on Sunday, Wal-Mart's stock tumbled.

The prominent case is likely to lead to more disclosures, said Paul Pelletier, a former Justice Department prosecutor who worked on Foreign Corrupt Practices Act investigations.

"The impact could be huge," Mr. Pelletier said. "Wal-Mart's having lost billions in market capitalization over these last few days is going to make companies in close cases more likely to err on the side of promptly self-reporting" when they uncover evidence of possible overseas bribery.

Enacted in 1977 as part of a series of overhauls after the Watergate scandal, the law bars companies that operate in the United States from bribing officials overseas to obtain or retain business - - though it makes an exception for low-level payments necessary to achieve a ministerial action that confers no unfair advantage. For its first few decades, the law was enforced only rarely.

"It always had teeth," said Rachel Brewster, who teaches international trade law at Harvard. "The United States government just was never interested in biting."

That started to change in more recent years as the business world became increasingly globalized and as other countries gradually adopted similar laws, undermining complaints by American corporations that enforcing the law vigorously would give an edge to foreign rivals.

The collapse of Enron, the energy company, a decade ago also led to tougher financial laws -- including requirements that top executives at publicly traded companies certify that their companies' books were accurate, forcing them to keep track of overseas money flows -- and to greater energy in enforcing them.

Another factor was that U.S. Justice Department prosecutors developed more expansive theories of the act's jurisdiction and the types of graft it covers. At the same time, they drove up fines by requiring companies to disgorge profits as a condition of settling cases without indictment through so-called deferred or nonprosecution agreements.

Criminal enforcement under the act has soared, to 48 enforcement actions in 2010 from just two in 2004. The dollar amount of fines imposed by the Justice Department and the U.S. Securities and Exchange Commission has increased even more, including a record- setting $800 million paid by Siemens, the engineering company, in 2008. There are at least 100 open investigations, specialists estimate.

"It used to be three or four cases a year, and so the F. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

After Decades, U.S. Bares Teeth of Bribery Law ; Anti-Corruption Act Gets New Attention with Case of Wal-Mart in Mexico
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.