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« Walmart's Investigation Disclosure | Main | Facilitating Payments: For Whom the Bell Tolls »
Wednesday
Apr252012

Repeal Not The FCPA (But Change The Business Model)

 One foreign businessman was shot twice in the head by a “krysha” (bribe)-seeking Russian gang. The safety of his own children was threatened by a gang member waving photographs of them going to school, according to Tim Worstall in his Forbes article arguing for repeal of anti-bribery laws. 

The view from the front lines of global capitalism can be stark and sometimes terrifying. But Worstall’s logic is weird. Criminal gangs prey on honest citizens trying to make a living (in Russia, or in my native Chicago where we’ve also had some problems with organized crime over the years.) Therefore abolish the laws banning the crimes?

Bribery laws, in the U.S. and Worstall’s own U.K., do not in fact criminalize bribes paid under a realistic threat of imminent violence. But threats to scuttle the business deal are not extortion.

And here's the sleight of hand in Worstall’s argument. He conflates violent extortion with losing a business deal. Partners in bribe-based business deals become co-thugs, not victims.

“I won’t do business with you unless you [fill in the crime of your choice] murder someone, or sell drugs, or protect a pedophile ring…”  Or bribe.

Bribery is a crime. Everywhere. (Russia too.) And for very good reasons. It wasn't always a crime, as Worstall notes. In fact bribery used to be tax deductible in the U.K., as he also notes. It was a governing tool of choice for British (as well as other) imperialists during the good old days of the Raj.

But times change. Slavery has also been abolished, despite the profitability of that economic system.

Threats to profits are not the same thing as threats of violence. It’s time to change the business model – or as former First Lady Nancy Reagan said to teens facing peer pressure to do drugs – Just Say No. If we can ask teens not to do business with drug dealers, should we expect less of our global captains of industry? 

Thugs are threatening your children and you want to repeal the laws?

___________________

Elizabeth K. Spahn is a professor at New England Law Boston, where she's been on the faculty since 1978. She can be contacted here.

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