The FCPA and the “Failure to Communicate”

The FCPA and the “Failure to Communicate”

 This article was reprinted with permission from FCPA Professor

 The year was 1982 and the Foreign Corrupt Practices Act was a mere 5 years old.  Leading FCPA experts, such as Frederick Wade (Chief Counsel, SEC Enforcement Division) gathered for a symposium at Syracuse University College of Law (See Volume 9, Number 2, Syracuse Journal of International Law and Commerce).

In a speech titled ”An Examination of the Provisions and Standards of the FCPA,” Wade lamented the “quality of the public debate” surrounding passage of the FCPA and then-current FCPA issues.  He observed:

“[A]t the time the FCPA was being considered in the Congress, and hearings were being held, there was a great reluctance on the part of interested companies and persons to come forward and make their views known.  Although this reluctance may be understandable, given the subject matter, there was virtually no opposition to the bill.  Few, if any, concerns were expressed in a public form as to how the FCPA might affect overseas operations or how the statute might be interpreted and applied.”


“[T]here is still great difficulty in getting the corporate sector to come forward and express concerns in a public forum in a way that the Congress can get a handle on them and try to deal with them in a rational way.”


[I]t is difficult to get a handle on the impact that the statute has had, because most of the experience people have had is related to the government or to the Congress in the form of anonymous anecdotes.  People say we have had this type of experience, or this kind of problem, but you have to take our word for it, accept our general description of the circumstances, and agree not to identify the source of the information.”


“From my perspective, the critics of the FCPA and those in government charged with administering the Act have been talking past each other for four years.  I am not sure why this is true.  I am sure that there has been a failure to communicate and that we have not advanced the ball to a great degree in terms of coming to grips with the issues.  This failure to communicate has profound implications with respect to the ability of the policymaking process to evaluate the issues and make needed changes to the law.”

Wade’s observations remain true 32 years later.

There remains a great reluctance on the part of interested companies and persons to come forward and make their FCPA views known.

If only I could publish the many comments I receive, including from current enforcement agency attorneys, critical of various aspects of FCPA enforcement.

If only leading FCPA practitioners would allow their names to be used in the observations they share with me.  For instance, a leading FCPA practitioner recently shared with me the following:

“I think the reality is that the FCPA Bar is, for obvious reasons, very eager to ingratiate itself with, the FCPA Unit in DC. The predictable result is that firms put out flattering articles and updates about the skill and fairness of the enforcers. This hardly results in meaningful discourse, scholarship, or conversation; that said, those who know the most and deal with the FCPA unit the most are also least likely to say in public what they will be happy to share in private over a beer.”

Given the largely opaque nature in which the FCPA is generally “enforced” behind closed doors in Washington, D.C., anecdotes, legend and lore often carry the day.

Persons interested in the FCPA continue to talk past each other.

To be critical of various aspects of FCPA enforcement may give one a label of being anti-FCPA (see here).  FCPA enforcement statistics are all-over-the-map (see here).  So-called civil society groups and organizations clamor for more enforcement while at the same time: (i) exhibiting a clear lack of knowledge regarding various issues relevant to the FCPA or FCPA enforcement; and (ii) articulating policy positions that not even the pro-enforcement enforcement agencies agree with (see here and here).  Major media outlets now have for-profit risk and compliance divisions and thus are hardly objective reporters of FCPA information.

 Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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