[Proper citation to Alanis Morissette is in order, this song makes for good background music as well for this post]
This post has been in the works for some time, but with the recent political conventions ending and the election season beginning in earnest, it was time to finish it. To be sure, this is not the first time I have written about this general topic, see here, here, here, here and here for prior posts regarding the double standard.
Isn’t it ironic, don’t you think, that as the U.S. aggressively expands its Foreign Corrupt Practices Act enforcement theories and snares foreign firms on flimsy jurisdictional theories, the U.S. continues to slide in Transparency International’s Corruption Perception Index (a well-known index that ranks countries on how corrupt their public sector is perceived to be)? Never in the top 10, the U.S. has now fallen out of the top 20.
Isn’t it ironic, don’t you think, that while the U.S. is bringing enforcement actions against companies for conduct that includes providing $600 bottles of wine, Cartier watches, cameras, kitchen appliances, business suits, and executive education classes to individuals deemed “foreign officials,” the U.S. has legitimized corporate influence over government in this country?
Think about this glaring double standard in the context of Las Vegas Sands (“Sands”) and its CEO Sheldon Adelson.
This ProPublica investigation “Inside the Investigation of Leading Republican Money Man Sheldon Adelson” revealed that “Adelson instructed a top executive to pay about $700,000 in legal fees to Leonel Alves, a Macau legislator whose firm was serving as an outside counsel to Las Vegas Sands” and that the payment was under FCPA scrutiny “because of Alves’ government and political roles in Macau.” As noted in this previous post, Sands has been under FCPA scrutiny for approximately two years.
Numerous articles for been writing about Sands (and perhaps Adelson’s) FCPA exposure. See here from the Wall Street Journal “Sands China Deals Scrutinized” (noting that Sands is under investigation by the DOJ and SEC for a variety of potential FCPA issues including a planned Adelson Center for U.S.-China Enterprise designed to help small and medium size U.S. businesses break into the Chinese market, Sands’ sponsorship of a Chinese basketball team, and Sands’ creation of a high-speed ferry services to bring gamblers from Macau to Hong Kong and obtaining a favorable administrative judgment). See also here from the New York Times “Scrutiny for Casino Mogul’s Frontman in China.”
At the same time, Adelson is a top Republican donor in U.S. elections. See here from the Wall Street Journal, “Casino Mogul Aids Romney’s Backers” (June 14, 2012) (noting that Aldelson and his wife have given $10 million to the main political action committee supporting Mitt Romney). As noted in the article, Adelson and his family also previously gave $25 million to other political action committees this election cycle. In addition, as noted in the article, “during the early primary season Mr. Adelson and his family kept Newt Gingrich’s campaign alive with $21 million in donations.”
Aldeson is not the only corporate titan seeking to influence (and influencing) the political process. Earlier this week, the Wall Street Journal reported here “Investor Bankrolls Big Romney Campaign” how Joe Ricketts, the founder of what become online brokerage TD Ameritrade Inc., “plans to spend $10 million airing ads supporting GOP nominee Mitt Romney.” The article reported that Ricketts total political spending on the 2012 election is expected to be about $18.5 million.
This is not, of course, just a Republican issue. The Wall Street Journal Article noted that DreamWorks Animation CEO Jeffrety Katzenberg and Irwin Jacobs, co-founder of Qualcomm Inc., are big spenders for President Obama and the Democratic Party. See also here from National Public Radio as to Katzenberg and here from Bloomberg Businessweek as to Jacobs.
Yet the U.S. political expenditures discussed above are perfectly legal. In Citizens United, the Supreme Court stated that such expenditures “do not give rise to corruption or the appearance of corruption.”
Yet payments made in the foreign context, even payments that pale in magnitude and degree, would be clear crimes under U.S. law. because they indeed give rise to corruption and the appearance of corruption.”
I close with the same questions posed in my previous double standard posts. Will a U.S. company’s interaction with a “foreign official” be subject to more scrutiny and different standards than its interaction with a U.S. official? Do we reflexively label a “foreign official” who receives “things of value” directly or indirectly from private business interests as corrupt, yet when a U.S. official similarly receives “things of value” directly or indirectly from private business interests we merely say “well, no one said our system is perfect”?
This is not a question of what the law is, but what the law should be, and whether there is any intellectual and moral consistency between these two extreme opposites. This is an issue of facing an uncomfortable truth that will be clear display the next several months.