It's not often that the government even tries to actively combat bad corporate practices, much less succeed.
In 1977, the Foreign Corrupt Policies Act (FCPA) did just that. Over the years it has been used to pull more than $1 billion in fines from huge companies like Siemens and DaimlerChrysler.
The law is simple. Before it, executives would win over contracts to do business with foreign governments by simply bringing a briefcase filled with cash to the meeting and greasing some palms.
The FCPA was designed to put this practice to an end by making it illegal to offer money to employees of foreign governments in return for a business advantage in that nation.
Not only does it apply to foreign companies, but it also works to ensure that foreign businesses don't do the same thing for our government contracts. That way, the playing field is totally leveled. You have to win contracts based on the quality of your products or services instead of how much money you're willing to throw around.
Businesses don't see it quite that way, however, and are fighting back against the law. They want the law to be changed so that it is more limited and restricted in its scope. Instead of holding the business liable, companies want to ensure that the employee responsible is held accountable instead.
Companies paint a dangerous picture where they are afraid to do business with foreign governments because the huge fines have big consequences for employees and stockholders who did nothing wrong.
The law holds particular clout now, as Rupert Murdoch's News Corp. is under investigation for violating the law by paying off police officers for information in the UK. In cases like this, the FCPA has become an integral part of the caseload of prosecutors.
It is truly incredible that corporations expect people to take this seriously. The fact that employees and stockholders will be damaged by irresponsible actions is not a real argument. As a leader of a company, it is your responsibility to act properly to ensure that you won't damage your business or hurt your employees. You're not going to get a free pass to commit crime.
But that's exactly what they want. Holding the employee who committed the bribe accountable is good and all, but telling businesses that they won't be in danger if that employee is caught just gives them a government subsidized patsy to allow bribery to resume with relative impunity.
They are effectively advocating for the total obliteration of the law, leaving a shell behind to convince us that everything is just hunky-dory and that they cross their hearts and promise not to do anything unethical.
It also sets a disturbing precedent where corporations can more easily advocate for laws that allow them to partition off liability for criminal actions that their employees take.
Hopefully the government doesn't take the bait. If it lets this effective law die, lawmakers are taking a huge step toward allowing corporations to once again undermine the stability and credibility of foreign governments.
Capitalism works best when it's properly regulated, and this law has been defending that principle for over 30 years; don't let it die, Washington.
