The House version of the CROOK 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.”
The Senate version of the CROOK ACT seeks to tax certain FCPA enforcement actions (those in which total criminal fines and penalties are in excess of $50 million) by imposing an “additional prevention payment equal to $5 million which shall be deposited in the Anti-Corruption Action Fund.”
As discussed in prior posts, the CROOK Act is feel-good legislation that will do very little to to reduce prominent root causes of bribery and corruption – that is foreign trade barriers, distortions and other conditions of doing business in a foreign country.
Nevertheless, the U.S. House Foreign Affairs Committee recently approved the CROOK Act as part of the committee’s China-focused bill, the Ensuring American Global Leadership and Engagement Act (“EAGLE Act”).
Thereafter, Transparency International issued a release stating in pertinent part:
“The CROOK Act would help counter foreign corrupting influence by deploying rapid-response resources to anti-corruption voices in foreign governments, civil society, and media organizations when integrity is under threat. CROOK’s dedicated anti-corruption funds will build a backstop for clean and ethical governance, and help anti-corruption champions stand up and fight back against authoritarian influence.
The full House of Representatives and the Senate must act with a shared sense of purpose and urgency to ensure that the CROOK Act is also included in the final bill.”
That’s a whole lot of gobbledygook.
Moreover, TI’s release comes with a “fact sheet” describing “how CROOK funds could be used to prevent and fight corruption in countries around the world.”
For instance, according to TI:
“Money from the Fund can be used to strengthen foreign countries’ capacities to prevent and fight corruption, develop their democratic and rule of law-based institutions, fortify their anticorruption legal and regulatory frameworks, and support other, existing U.S. foreign assistance or diplomatic efforts against corruption.”
TI further states:
“The legislation would also help bring about a proactive, coordinated, whole-of-government approach to
combating foreign corruption by:
Creating an Anticorruption Task Force comprised of representatives from departments and agencies that work on anticorruption (e.g., DOJ, State, USAID, Defense). Among other responsibilities, the Task Force would evaluate the
effectiveness of U.S. programs that help foreign countries fight corruption;
Requiring the Secretary of State to manage a whole-of-government effort to improve coordination among departments, agencies, and donor organizations that work to promote good governance or combat corruption in foreign countries;
Designating and training anticorruption points of contact at every U.S. embassy who would coordinate an interagency approach within U.S. embassies to combat corruption, and make recommendations regarding the use of Fund and other anticorruption foreign assistance funding in their respective countries.”
Few, if any, of these suggestions for “how CROOK funds could be used to prevent and fight corruption in countries around the world” will do much to reduce the foreign trade barriers, distortions, and other conditions of doing business in a foreign country that actually serve as the root causes for many instances of bribery and corruption.
Strategies For Minimizing Risk Under The FCPA
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