Monday, November 28, 2011
WSJ's Joe Palazzolo reports here this morning on lobbying efforts to weaken/clarify the FCPA. In yesterday's NYTimes, Gretchen Morgenson commented upon the movement to prevent the CFTC from bringing transparency to the swaps market. In a November 4 piece, WSJ's Michael Rapoport detailed Jon Corzine's successful July 2011 campaign, on behalf of MF Global Holdings, to block a CFTC proposal "that would have placed tighter restrictions on how futures-trading firms can invest cash sitting in customer trading accounts." (Prescient move, Jon.) Most or all of the GOP candidates favor repeal of Dodd-Frank. If a Martian fell to Earth he/she/it would never believe that the same financial elites who brought us to the edge of ruin are still having so much success calling the regulatory shots.
FCPA clearly needs clarification. DOJ, in typical fashion, has given the statute the broadest possible interpretation. But don't expect any significant weakening. Why? FCPA is a cash cow. Big companies, most of whom are quite vulnerable, will do anything to avoid a civil or criminal trial. FCPA becomes a cost of doing business. The money flows into the government. Many of the DOJ attorneys flow into private practice. Because big companies do not want to risk losing at trial, bringing FCPA cases and obtaining huge monetary settlements, at least against those companies, is like shooting fish in a barrel. In other words, the cases are easy to do--just like insider trading cases. They bring big headlines. So the public is diverted from thinking about DOJ's remarkable failure to systematically investigate the top tier entitities and individuals who facilitated the worst economic catastrophe since the Great Depression.