This article was
reprinted with permission from FCPA Professor
[Proper citation to
Alanis Morissette is in order, this song makes for good
background music as well for this post]
This post has been in the works for some time, but with
the recent political conventions ending and the election season beginning in
earnest, it was time to finish it. To be sure, this is not the first time
I have written about this general topic, see here, here, here, here and
here for prior
posts regarding the double standard.
Isn't it ironic, don't you think, that as the U.S.
aggressively expands its Foreign Corrupt Practices Act enforcement
theories and snares foreign firms on flimsy jurisdictional theories, the U.S.
continues to slide in Transparency International's Corruption Perception Index
(a well-known index that ranks countries on how corrupt their public sector is
perceived to be)? Never in the top 10, the U.S. has now fallen out of the
Isn't it ironic, don't you think, that while the U.S. is
bringing enforcement actions against companies for conduct that includes
providing $600 bottles of wine, Cartier watches, cameras, kitchen appliances,
business suits, and executive education classes to individuals deemed
"foreign officials," the U.S. has legitimized corporate influence over
government in this country?
Think about this glaring double standard in the context
of Las Vegas Sands ("Sands") and its CEO Sheldon Adelson.
This ProPublica investigation
"Inside the Investigation of Leading Republican Money Man Sheldon Adelson"
revealed that "Adelson instructed a top executive to pay about $700,000 in
legal fees to Leonel Alves, a Macau legislator whose firm was serving as an
outside counsel to Las Vegas Sands" and that the payment was under
FCPA scrutiny "because of Alves' government and political roles in
Macau." As noted in this previous
post, Sands has been under FCPA scrutiny for approximately two years.
Numerous articles for been writing about Sands (and
perhaps Adelson's) FCPA exposure. See here from
the Wall Street Journal "Sands China Deals Scrutinized" (noting that Sands is
under investigation by the DOJ and SEC for a variety
of potential FCPA issues including a planned Adelson Center
for U.S.-China Enterprise designed to help small and medium size U.S.
businesses break into the Chinese market, Sands' sponsorship of a Chinese
basketball team, and Sands' creation of a high-speed ferry services to bring gamblers
from Macau to Hong Kong and obtaining a favorable administrative
judgment). See also here
from the New York Times "Scrutiny for Casino Mogul's Frontman in China."
At the same time, Adelson is a top Republican donor
in U.S. elections. See here from
the Wall Street Journal, "Casino Mogul Aids Romney's Backers" (June 14,
2012) (noting that Aldelson and his wife have given $10 million to the
main political action committee supporting Mitt Romney). As noted in the
article, Adelson and his family also previously gave $25 million to other
political action committees this election cycle. In addition, as noted in
the article, "during the early primary season Mr. Adelson and his family kept
Newt Gingrich's campaign alive with $21 million in donations."
Aldeson is not the only corporate titan seeking to
influence (and influencing) the political process. Earlier this
week, the Wall Street Journal reported here
"Investor Bankrolls Big Romney Campaign" how Joe Ricketts, the founder of
what become online brokerage TD Ameritrade Inc., "plans to spend $10 million
airing ads supporting GOP nominee Mitt Romney." The article reported that
Ricketts total political spending on the 2012 election is expected to be about
This is not, of course, just a Republican issue.
The Wall Street Journal Article noted that DreamWorks Animation CEO
Jeffrety Katzenberg and Irwin Jacobs, co-founder of Qualcomm Inc., are big
spenders for President Obama and the Democratic Party. See also here from
National Public Radio as to Katzenberg and here from
Bloomberg Businessweek as to Jacobs.
Yet the U.S. political expenditures discussed
above are perfectly legal. In Citizens United, the Supreme
Court stated that such expenditures "do not give rise to corruption
or the appearance of corruption."
Yet payments made in the foreign context, even
payments that pale in magnitude and degree, would be clear crimes under U.S.
law. because they indeed give rise to corruption and the appearance of
I close with the same questions posed in my previous
double standard posts. Will a U.S. company's interaction with a "foreign
official" be subject to more scrutiny and different standards than its
interaction with a U.S. official? Do we reflexively label a "foreign
official" who receives "things of value" directly or indirectly from private
business interests as corrupt, yet when a U.S. official similarly receives
"things of value" directly or indirectly from private business interests
we merely say "well, no one said our system is perfect"?
This is not a question of what the law is, but what the
law should be, and whether there is any intellectual and moral consistency
between these two extreme opposites. This is an issue of facing an
uncomfortable truth that will be clear display the next several months.
Read more articles on the FCPA by Mike
Koehler at FCPA
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