As discussed in this recent Wall Street Journal article:
“The Biden administration is pushing hard for American businesses to invest in Africa despite the obstacles they face there, more than a decade after China began expanding its economic and political ties with countries across the continent.
Vice President Kamala Harris pledged [recently] in Ghana’s seaside capital to “double down” on efforts to bring billions of dollars in investments to Africa, a continent that many Western investors still view as high risk. Ms. Harris is the highest ranking in a string of top White House and Biden administration officials to travel through Africa this year, promising to unlock American investment as both the U.S. and China look to tap into the continent’s vast natural resources.
But U.S. and other Western investors often cite corruption, poor infrastructure and still rampant poverty, all of which preclude easily operating across dozens of countries that all have their own rules and market peculiarities.”
The above example is the latest example (see here, here and here for prior posts) of the U.S. government encouraging investment in a country – because it advances the U.S. government’s current foreign policy interests – while knowing full well that the country has corruption problems that could expose U.S. companies to FCPA issues.
This dynamic is as old as the FCPA itself (passed in 1977).
Actually, older than that.
As highlighted in this prior post, one of the more insightful things found in the FCPA’s extensive legislative history is an October 1975 article by Milton Gwirtzman published by the New York Times Magazine. At this point in time, Congress was in the midst of its investigations into the so-called foreign corporate payments problem and Gwirtzman noted:
“If corporate bribery abroad has offended the post-Watergate morality, the companies implicated have nevertheless taken a greater share of the blame than they deserve. […] The responsibility for present practices must also be shared by our Government, which not only encouraged investment in countries whose ethical standards differ from ours, but also in many respects set the pattern for the graft under censure today. […] The rapid acceleration of American private investment in foreign lands, which began in the mid-nineteen-sixties, was seen by our foreign policy makers as a welcome opportunity. If U.S. firms could build a nation’s infrastructure, supply its consumer goods and hire a portion of its workers, the greater the likelihood the nation would be bound to ours by the safest and strongest of ties, economic self-interest. As a result, our Government wrote the foreign investment laws of several developing countries and urged our multinationals to make use of them. New programs were established to insure foreign investment against the risks of war and expropriation. Embassy personnel were ordered to scout out export possibilities for American firms, which were published in Commerce Business Daily, the Government’s daily list of business opportunities.”
Gwirtzman then stated as follows. “For all these reasons, it would be unwise, as well as unfair, simply to write off bribery abroad to corporate lust. It is a symbol of far deeper issues that really involve America’s role in the world.”
This was true nearly 50 years ago, and as the recent example highlighted at the beginning of this post demonstrates, remains true today.