Is US Campaign Finance Law More Permissive of Corruption than the FCPA?

An odd feature of U.S. law is that it appears to impose more stringent restrictions on private donations to foreign politicians than on donations to U.S. politicians.

Consider first domestic U.S. campaign finance laws.  These laws have received a great deal of scrutiny over the last 40 years, because of the argument that restricting spending on political activities may offend the “freedom of speech” guaranteed by the First Amendment of the U.S. Constitution. The U.S. Supreme Court has issued a number of landmark decisions on this subject over the last 40 years, beginning with Buckley v. Valeo (1976), and most recently in McCutcheon v. FEC (2014) (which Matthew discussed in a post from a few months back). The dominant trend in these decisions has been a loosening of restrictions on campaign contributions and independent donations, but one specific change in the campaign finance jurisprudence is particularly interesting. In McConnell v. FEC, the Supreme Court held that “selling access” or “influence” constituted a form of corruption, prevention of which could justify certain campaign finance restrictions. In Citizens United v. FEC, the Court, in an opinion by Justice Kennedy (citing to his dissent in McConnell), narrowed the definition of corruption “to quid pro quo corruption,” and held the “fact that speakers may have influence over or access to elected officials does not mean that these officials are corrupt.”

Now consider the main U.S. statute that addresses payments to foreign officials (as well as foreign candidates for public office): the Foreign Corrupt Practices Act (FCPA). In contrast to the campaign finance area, there is very little case law clarifying the meaning of the FCPA’s provisions (a fact that some commentators have lamented). Nonetheless, the FCPA’s prohibition on “corruptly” giving “anything of value” to a foreign official or foreign candidate for public office for the purpose of “influencing any act or decision [taken in an official capacity]” does not require an express quid pro quo, (see 15 U.S.C. § 78dd-1(a)(2)(A)(i)).

Thus it appears that payments (including campaign donations or other forms of political support) that are intended to influence politicians’ official decisions are proper (indeed, constitutionally protected) if made in the U.S., but improper (indeed, criminal) if made in other countries.

This result feels anomalous – one would expect U.S. anticorruption laws to be more concerned with conduct occurring in the United States, and therefore stricter when dealing with possible corruption in the political process. There are at least two potential reasons why this might not be the case, though neither is entirely satisfactory.

  • First, domestic political donations implicate the core of the First Amendment right to free speech, while expenditures in foreign countries may not. Perhaps it might be relevant here that the FCPA explicitly exempts payments that are legal under the written laws of the country where the payment takes place. So, if some other country had a written law equivalent to the First Amendment of the U.S. Constitution, which its national courts had interpreted as permitting a similar class of non-quid pro quo influence payments, then the FCPA’s broader definition of corruption would not apply there either. That said, it’s not entirely clear why the First Amendment protections that apply to U.S. persons (including corporations) would not apply when those persons make campaign donations or expenditures in foreign countries.
  • Second, other language in the FCPA might serve to limit the scope of its applicability. The statute, for example, uses the modifier “corruptly” when describing the making of payments. It is not clear, though, what effect this inclusion should have – it does not seem plausible for the subjective intentions of all donors to be scrutinized to determine whether they are acting “corruptly” or not. Perhaps more relevant is the fact that the FCPA refers directly to the influencing of an “act or decision,” which may be read as referring to “quid pro quo” corruption. However, the “influence” spoken of in Citizens United must also be related to some act or decision, because it would not otherwise have any tangible effect.

In the end, it’s not clear whether these two statutory schemes actually implement different conceptions of corruption, and, if they do, which conception is more sensible. This inconsistency raises some interesting policy issues, though, as well as demonstrating the inherent difficult associated with defining corruption.

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