National Security And The FCPA
The February 10th Executive Order issued by President Trump titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security” mentions national security four times including in the title.
Some people seemingly had a “come apart” regarding this, however national security and FCPA issues have always been intertwined.
In fact, during the mid-1970s when Congress was contemplating what to do about the so-called foreign corporate payments problem, one of the things Congress learned was that in certain instances the State Department and Defense Department were participants in, or at least enablers of, the very problem Congress was seeking to address. (See here for “The Story of the FCPA”).
The CIA’s Classified Relationships With U.S. Publicly Traded Companies And The FCPA
One of the more obscure portions of the Foreign Corrupt Practices Act states:
“With respect to matters concerning the national security of the United States, no duty or liability under [the books and records and internal controls provisions] shall be imposed upon any person acting in cooperation with the head of any Federal department or agency responsible for such matters if such act in cooperation with such head of a department or agency was done upon the specific, written directive of the head of such department or agency pursuant to Presidential authority to issue such directives.”
Was Milton Gwirtzman Right? Is He Still Right?
The February 10th Executive Order “pausing” FCPA enforcement mentions the following.
“The President’s foreign policy authority is inextricably linked with the global economic competitiveness of American companies. American national security depends in substantial part on the United States and its companies gaining strategic business advantages whether in critical minerals, deep-water ports, or other key infrastructure or assets.”
This is a fairly obvious statement that has long been true.
This post rewinds the clock to 1975 and highlights how Congress wrestled with the same general issues 50 years ago when enacting the FCPA.
Random Thoughts
Much has been written about President Trump’s February 10th Executive Order Titled “Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security.”
Below are some random thoughts about certain recent commentary.
This article asks “so how should U.S. business leaders navigate a potential world without the FCPA, or with a weakened or selectively enforced FCPA?”
For starters, there is still an FCPA – nothing has changed in this regard.
Second, the FCPA has been selectively enforced for nearly 50 years. If you don’t understand or acknowledge this you simply are not well-informed or paying attention.
Principal Associate Deputy Attorney General Miller On Voluntary Disclosure, Compensation Clawback, And National Security
It is September which means enforcement agency officials hit the “conference circuit” to give scripted speeches.
Today it was Principal Associate Deputy Attorney General Marshall Miller speaking at a private event to discuss “the Justice Department’s corporate criminal enforcement priorities” specifically (in what is perhaps a laughable statement to many who closely follow DOJ enforcement activity) the DOJ’s “commitment to consistency, predictability, and transparency in our corporate enforcement work …”.
Miller began by talking about voluntary disclosure and stated: