Earlier this month, the OECD Working Group on Bribery released its Phase 4 Report on U.S. compliance with the OECD Anti-Bribery Convention. For those readers unfamiliar with the process, this report is part of the peer monitoring system that the OECD Convention establishes for promoting adherence to the Convention. (The Convention lacks “hard” sanctions, though in extreme cases it’s possible a country could be expelled. Rather, the Convention relies on “soft” peer pressure, facilitated through the extensive and detailed investigations and reports carried out by the Working Group.) The lengthy and detailed report, produced under the leadership of experts from the UK and Argentina, assesses U.S. performance on a range of issues related to the prevention and prosecution of foreign bribery. For purposes of this post, I want to zero in on one narrow but important issue, which gets just over a couple of pages in the report: whether U.S. enforcement of the Foreign Corrupt Practices Act (FCPA) is improperly influenced by national political or economic interests.
This question is important, both legally and politically. As a legal matter, Article 5 of the OECD Convention explicitly states that decisions regarding the investigation and prosecution of foreign bribery offenses “shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved.” The OECD has in the past raised concerns about Article 5 violations by other member states, including the United Kingdom, and, more recently, Turkey and Canada. More broadly, as a political matter critics have alleged that the U.S. government’s enforcement of the FCPA is biased against foreign companies, and have sometimes gone so far as to accuse the U.S. of deliberately designing FCPA enforcement actions so as to secure economic advantages for U.S. companies at the expense of foreign rivals. A particularly sensationalistic version of the claim appeared in a book written by a French executive who was convicted and jailed on FCPA charges; that book became a best-seller in China, where the view that U.S. prosecutorial decisions are made to advance national economic interests is widespread. But the notion has been around for a while. (To give one personal example, last year I had a conversation with a journalist from a leading Brazilian news organization who asked for my views on the claim, which he’d apparently heard from several Brazilian sources, that the U.S. FCPA prosecution against Odebrecht was motivated by a desire to eliminate or cripple a company that competed with U.S. firms.) The U.S. government may have further contributed to this narrative in a 2018 press release on the Department of Justice’s “China Initiative”; that press release listed, as one component of the initiative, the “identif[ication of FCPA] cases involving Chinese companies that compete with American businesses.”
While it may be that the U.S. officials charged with enforcing the FCPA have their own biases and blind spots, the strong claim that the FCPA was some kind of a neo-mercantalist/neo-protectionist tool always struck me as far-fetched. (And this is true notwithstanding the FCPA passage in the China Initiative press release, which seemed more like something that got thrown in without much thought or vetting, rather than a substantive change in policy.) And it seems that the OECD Bribery Working Group’s review team came to the same conclusion. As the report states, “the lead examiners … have found no basis to consider that any FCPA decisions have been made for improper reasons.” Continue reading