Let me be blunt: assuming the allegations to be true, had the FCPA been amended to include a good faith compliance defense, Wal-Mart would not be eligible for it.
Some now argue that Wal-Mart discredits the U.S. Chamber of Commerce's efforts to amend the FCPA with a good faith compliance defense. They will point out that Wal-Mart had a compliance program of some kind in place, and yet is alleged to have committed systematic violations.
But let's be fair. Supporters of the proposal, including both editors of this blog, do not propose that having just any compliance defense in place should constitute a defense. Rather, it's a "good faith" compliance defense. What is good faith? We can talk about that. But for now let's say that if the CEO knew of a high probability of systematic bribery within his company and did not conduct a thorough investigation, he was not complying in good faith.
I highly recommend two leading academic commentators on this issue: Ellen Podgor and Mike Koehler. I won't put words in their mouth, but at the moment, I can't imagine either of these scholars rushing to Wal-Mart's defense on good faith compliance grounds.
The FCPA reform movement has indeed suffered a setback in the court of public opinion. The dust will have to settle on Wal-Mart, and perhaps the movie studio investigations as well, before we could again work on building the requisite political will.
But here in the blogosphere, we're not running for office; we speak to a more sophisticated audience. Perhaps we will see cases that cast doubt on whether compliance, in good faith, should absolve a corporation from liability. But based on the current allegations, Wal-Mart most definitely is not it.
Andy Spalding is a contributing editor of the FCPA Blog. He 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.