May 18, 2011
Are "New" Techniques in Combating FCPA Violations Worth It?
Law.com reports that a new federal bribery case in the D.C. District Court is underway. The defendants, who were executives for arms and military equipment suppliers, "were indicted last year in an aggressive prosecution that marked the first large-scale use of undercover techniques in a Foreign Corrupt Practices Act [(FCPA)] case."
I have to say that I am a little surprised that this is the first "large-scale use of undercover techniques" in an FCPA bribery case. I admit, I have little to no idea what goes into an FCPA investigation, but I find it hard to imagine trying to combat bribery cases without undercover work. I suppose it could happen, but I would think undercover work would be reasonably effective in this arena.
That said, I can't help but wonder if this is the best use of resources. The FCPA investigations are apparently becoming quite elaborate, and I am pretty sure there are more pressing matters that should be dealt with first. I remain anti-bribery and believe people should be accountable for knowingly breaking the law even if the law might be dumb. But it appears that the DOJ, SEC, and other investigators are focusing on high-profile cases they think they can close, rather than pursuing the worst offenders. I'd add these types of FCPA cases to the recent criticisms of insider trading enforcement from Stephen Bainbridge and Steve Bradford.
Maybe just raising the specter of any investigation and conviction will cause other would be criminals, terrorists, and other evil doers to think twice. But I rather doubt it.
The tremendous waste of resources in arranging elaborate "sting operations" on minor arms dealers is just further evidence of the official hypocrisy that pervades our anti-corruption crusade. It is easier to trick some unsophisticated small business owner into succumbing to an FCPA sting than it is track down and successfully prosecute traders in the stock market who daily manipulate quoted prices and reap millions. The former have no friends in Congress or academia; the latter will be defended as "adding much needed liquidity" to the markets by professors, politicians and perpetrators. And when the point is to get convictions to enhance one's job prospects when the revolving door next turns, well, need we say more?
Posted by: Bruce W Bean | May 19, 2011 1:10:55 AM