The Foreign Extortion Prevention Act: A Response to Professor Koehler
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.
Bill Seeks To Capture The Demand Side Of Foreign Bribery Through Amendment To 18 USC 201
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.”
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
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.
“Rigged Facts”
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.”
Understanding Odebrecht: Lessons For Combating Corruption In The Americas
Recently, the House Foreign Affairs Committee held a hearing titled “Understanding Odebrecht: Lessons for Combating Corruption in the Americas” in reference to the 2016 Foreign Corrupt Practices Act and related enforcement action against Brazil-based Odebrecht and its affiliate Braskem (see here and here for prior posts).
Granted, Congress often holds hearings with aspirational titles, but after watching the hearing I am not sure I came any closer to “understanding” Odebrecht or came away with any “lessons for combating corruption in the Americas.”
Nevertheless, set forth below are a few observations from the hearing.