enforcement of the Foreign Corrupt Practices Act (FCPA) be suspended for those
US companies now working in Haiti? This topic has been in discussion for a few
weeks. It began with a statement by Wall Street Journal editorial board member
Mary Anastasia O'Grady in a piece entitled "Democrats
and Haiti Telecom". Ms. O'Grady cited "an American entrepreneur" for the
quote "We did not bother with Haiti as the Foreign Corrupt Practices Act precludes
legitimate U.S. entities from entering the Haitian market. Haiti is pure pay to
to play" statement led George Mason University Professor Tyler Cowen,
writing in the Marginal
Revolution Blog, to write "one of the best ways to help Haiti" is to "pass
a law stating that the Foreign Corrupt Practices Act does not apply to dealings
in Haiti. As it stands right now, U.S. businesses are unwilling to take on this
legal risk and the result is similar to an embargo. You can't do business in
Haiti without paying bribes". Professor Cowen's statement led Eric Lipman,
writing in the Legal Blog Watch, followed this
up with "[i]t should not be necessary to suspend enforcement of an
anti-corruption law to enable U.S. companies to participate, but, realistically
speaking, is it justified in this case to look the other way for a time?".
to the suggestion that FCPA enforcement should be suspended in Haiti, the FCPA
Professor articulated three reasons the law should not be suspended in Haiti.
First the FCPA applies only to foreign governmental officials so not all
business dealings in Haiti are covered by the FCPA. Second, empirical evidence
suggests that foreign investment will be high in countries should as Haiti if
their markets are lucrative but Haiti's is not. Third, is Haiti's 2009 ranking
in Transparency International's Corruption Perceptions Index demonstrates that
it is a country where corruption is rampant.
lead editorial in its Sunday, March 28 edition, the New York Times urged
that Haiti "will need to sweep out the old, bad ways of doing things, not only
those of the infamously corrupt and hapless government, but also of aid and
development agencies, whose nurturing of Haiti has been a manifest failure for
more than half a century". The piece suggested the following ideas to further
this goal: Transparency, Accountability and Effectiveness; Haitian Involvement,
Self-Sufficiency; Tapping the Diaspora and De-centralization as some of the
keys for a successful rebuilding of Haiti. These ideas applied to groups both
inside the country and out. But it is clear that the Times did not suggest that
kowtowing to a "pay to play state" by suspending the enforcement of the FCPA
was a way to move forward.
Visit FCPA Compliance and Ethics Blog, hosted by Thomas Fox,
for more commentary on FCPA compliance, indemnities and other forms of risk
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