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Flashback To The Mid-1970’s Regarding The Demand Side

1970s

Previous posts here and here discussed the recently introduced Foreign Extortion Prevention Act which seeks to “prohibit a foreign official from demanding a bribe” by amending – not the FCPA – but rather 18 USC 201 (the so-called domestic bribery statute).

In introducing the bill, Representative John Curtis (R-UT), one of the co-sponsors, stated. “Currently, a business being extorted for a bribe can only say ‘I can’t pay you a bribe because it is illegal and I might get arrested.’ This long-overdue bill would enable them to add, ‘and so will you.”

This remark caused a mid-1970’s flashback because, as highlighted below, it largely mirrors the policy rationale of those who supported addressing the so-called foreign corporate payments through a disclosure approach and not the criminalization approach that ultimately became the Foreign Corrupt Practices Act.

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The Foreign Extortion Prevention Act:  A Response to Professor Koehler

extortion

Today’s post is from Baker & McKenzie attorneys Tom Firestone and Maria Piontkovska.

As the authors of one of the articles that contributed to the Foreign Extortion Prevention Act (“FEPA” or the “Act”), we would like to address some of the points made in Professor Koehler’s post on the FCPA Professor of August 5 entitled “Bill Seeks To Capture The Demand Side of Foreign Bribery Through Amendment to 18 USC 201.” (See here)

As an initial matter, we applaud Professor Koehler’s longstanding attention to this issue and understand that despite his criticisms of the text of the bill, Professor Koehler supports the concept of criminalizing the demand side of bribery.  He just believes that this should be accomplished through an amendment to the FCPA, rather than to 18 USC §201, as the Act would do and as we suggested in our original article.  In support of this argument, he raises several questions about FEPA.

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Bill Seeks To Capture The Demand Side Of Foreign Bribery Through Amendment To 18 USC 201

Capital Hill

The Foreign Corrupt Practices Act only captures one participant in a bribery scheme (the so-called supply side) in what is nearly always a two participant scheme. For more on this dynamic, see this recent FCPA Flash podcast episode with Tom Firestone (Baker & McKenzie) for how the demand side of bribery can be best addressed from a legal and policy perspective.

This bill titled “Foreign Extortion Prevention Act” recently introduced in the House by Representatives Sheila Jackson Lee (D- TX), John Curtis (R-UT), Tom Malinowski (D- NJ), and Richard Hudson (R-NC) seeks to “prohibit a foreign official from demanding a bribe.”

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CROOK Act Seeks To Fund An Anti-Corruption Action Fund With 5% Of “Each Civil And Criminal Fine And Penalty Imposed Pursuant To Actions Brought” Under The FCPA

Capital Hill

Recently, Representative Bill Keating (D-Mass.) and Representative Brian Fitzpatrick (R-Pa.) introduced a bill titled “Countering Russian and Other Overseas Kleptocracy Act” (“CROOK Act”).

As explained below, the Act seeks “an amount equal to five percent of each civil and criminal fine and penalty imposed pursuant to actions brought under the FCPA … that would otherwise be deposited in the Treasury of the United States” to fund the Anti-Corruption Action Fund.”

As further explained below, the Act demonstrates a poor understanding of FCPA enforcement actions.

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“Rigged Facts”

jayapalwarren

Recently Senator Elizabeth Warren (D-MA) and Congresswomen Pramila Jayapal (D-WA) released this document titled “Rigged Justice 2.0 – Government of the Billionaires, by the Billionaires and for the Billionaires.”

The document is by no means Foreign Corrupt Practices Act specific, but the FCPA is mentioned in the document in a way that I suggest another title for the document should be: “Rigged Facts and Selectively Omitted Information.”

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