What the FCPA's History Means for the Future of the Fight Against Corruption

In a previous piece in conversation with Severin Wirz, ethics and compliance attorney (and former TRACE staffer) about his book Bribery Beyond Borders: The Story of the Foreign Corrupt Practices Act, I covered his telling of the pre-history of the FCPA. In this second of a two-part series, I explore how Wirz thinks the anti-corruption movement should now move forward, particularly following first the FCPA pause, and now the changes in FCPA enforcement. 

Wirz is particularly interested in the role that narrative has played in the FCPA story. Wirz explained that the original champions of the law tied the FCPA to geopolitical issues of the day, including winning the Cold War, re-establishing America’s global reputation after Vietnam, and reigning in the power of multinational companies. In the 1990s, Wirz told me, the story was that “removing barriers to entry to emerging markets and fighting corruption would advance human rights, strengthen democracy and promote development.” As greater freedom took root worldwide, we entered what Wirz called an “FCPA heyday" in the early 2010s. “People thought the law was here to stay” and lost focus on long-standing efforts to dismantle the law.

Of late, Wirz pointed out, US leaders have tried to demonstrate to the American people that our interests are threatened by autocracy and kleptocracy, but there has not been an effort to tie the FCPA into that message. He told me that there is a widespread understanding that China is harming both American enterprise and our geopolitical interests, and thus we need to ask, “how can the FCPA be a counterweight?” Moving forward, Wirz said, DOJ priorities cannot be framed around simple moral arguments that “corruption is bad.” Rather, we need to “keep articulating how global corruption negatively affects American national interests.” 

In that respect, Wirz told me that looking ahead, he is “bullish about the future of the FCPA as a tool in the US toolbox.” However, he noted – and as his book covers – there have also been “legitimate concerns about colonialism or hegemony” surrounding the choice of cases the US has pursued. As Wirz writes, “critics have wondered whether the United States… has sought not just to level the playing field, but rather to tilt it in its own favor.” Previously, the US could tamp down such complaints, Wirz told me, but if we are perceived to be on shaky ground ourselves, “then it’s just about naked power, and it will be very difficult for the US to moralize about what other countries should do about corruption.” 

Moreover, while we need to make sure the FCPA survives, he told me, “it doesn’t need to be the world’s most copied anti-corruption law.” In a multipolar world, he says we should “take comfort in the fact that there are a lot of ways of going about this,” and we should embrace the efforts that various countries are pursuing independently. Harkening back to some of the early FCPA debates recounted in his book, and as mentioned in the previous blog in this series, Wirz told me that while criminal enforcement is one tool, there is growing recognition that “disclosure and transparency laws, and effective beneficial ownership transparency through public registries,” can also be effective. 

In the meantime, Wirz told me, he would caution multinationals about making any drastic changes to their overseas conduct. “A prudent CEO,” he told me, “recognizes that there are unknowns about what the next Administration might look like, and given the statute of limitations, companies shouldn’t run around paying bribes.” In Wirz’s view, “companies want predictability, stability and order. Multinationals want to do business overseas, and bribery is still a risk.” But, Wirz said, though companies will not take the FCPA off their radar, what has been termed “FCPA Inc.,” meaning the robust anti-corruption industry of specialized lawyers and consultants that the law helped create, “is probably not coming back in the way it existed before.”

Marc Schleifer

Governance, Democracy and Economic Development Expert