Beyond Balance: Reframing the FCPA Reform Debate

By Andy Spalding

Thanks again to the FCPA Blog for sharing its space with me at this, a crucial point in FCPA history. Readers of this blog well know that since enacting the statute in 1977, we have amended it only twice -- in 1988 and 1998. We may now be gearing up to do so again. 

But the current FCPA reform debate is hindered, indeed paralyzed, by a false dichotomy -- namely, the dichotomy between the dual goals of combating corruption and encouraging international business. An enforcement regime that is carefully tailored to the world in which we now do business, and that achieves the FCPA’s underlying purpose, requires finding a way out of this dichotomy.

Leading the reform movement, the U.S. business community contends that the scale which balances the interests of business against the goals of anti-corruption reform has tipped too far.  Specifically, they complain that an unpredictable and unfair enforcement regime is increasingly causing them to forgo otherwise profitable opportunities. Their declared aim in reforming the FCPA is “restoring balance” to that supposed scale.

The anti-corruption camp retorts that any such reforms would merely scale back anti-bribery enforcement, compromising ethics and good governance for the sake of mere profits. They contend that measures to make the FCPA less hostile to business, thereby freeing up corporations to do business in bribery-prone countries, will tend to undermine the anti-corruption effort.  Lurking behind the pleas for due process, they see thinly-veiled profiteering. This camp will generally deny that the FCPA is causing losses to U.S. business; but if forced to concede it, they’ll argue that the business we lose is business we shouldn’t be engaged in at all.

Both sides thus tend to suggest that the reform debate is a zero-sum game. If we amend the FCPA to make it more business-friendly, we’re compromising the cause of combating corruption; if we support anything like the proposed amendments, we are tipping the scale in favor of business at the expense of the anti-corruption effort.  This metaphor of the scale now controls the debate; all we seem to talk about is what constitutes the right “balance.”

This dichotomy between the interests of business and the goals of anti-corruption reform is false, in two ways. It is inconsistent with the original vision of the FCPA, which most certainly was not premised on some sort of balancing act between combating corruption and encouraging international business. And it is inconsistent with a realistic understanding how anti-bribery laws now function in the world -- a world that has changed dramatically and irreversibly since 1977 or even 1998. A more effective debate on FCPA reforms requires moving beyond the metaphor of a balanced scale. To begin, we should go back to the historical context that first gave rise to the FCPA, where we’ll rediscover the statute’s founding purpose. If we start there, we will find ourselves in a different place than we are now. 

And as I will endeavor to show, it is a better place. More to come.

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Andy Spalding teaches international business law at the Chicago-Kent College of Law; effective June 1, he’ll be an Assistant Professor at the University of Richmond School of Law. A former Fulbright Senior Research Scholar and lawyer at a major international firm, he has lectured and conducted research on anti-corruption law throughout the developing world.

We're grateful to Professor Spalding for allowing us to serialize 'Beyond Balance' in a series of posts, beginning with this one.