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To Mexico, from Nigeria, via Kazakhstan: On the Trail of a Great Idea (Final Installment)

We’ve seen, in our last two posts in this series (here and here), a radical new enforcement idea starting to take root -- using at least some portion of the enforcement proceeds to directly benefit the citizens of the countries in which the bribery occurred.

SERAP has requested this for Nigeria. The U.S. did something like it in Kazakhstan. And the U.K.’s Serious Fraud Office did it with BAE, ordering the company to buy £29.5m worth of textbooks for Tanzanian primary schools. (We won’t remind ourselves where the $400 million that the U.S. collected from BAE for the same conduct wound up).

It makes sense, really. When the U.S. government enforces domestic laws, depositing money in the U.S. Treasury will help the community in which the illicit conduct occurred. But when the conduct occurs overseas, and the victims are citizens of foreign countries, deposits to the U.S. Treasury won’t help them at all.  

And now, we’re facing the very real possibility of a sizable enforcement action for conduct that occurred exclusively in Mexico, our NAFTA partner and geographical neighbor. If ever an FCPA enforcement action should benefit the host country, this would be it.

So I’d like to suggest that if the Wal-mart investigation results in significant civil or criminal fines or disgorged profits, some portion of those monies be used to benefit the people of Mexico. While this could be structured in a number of ways, I’d like to suggest three guiding principles.

First, the effort would have a dual aim: remediation and education. How can we remediate the effects of bribery? Where zoning regulations were skirted, fund community preservation efforts; where environmental laws were violated, fund restoration; where safety regulations were bypassed, promote employer, customer, and community safety. And in doing so, we can educate the communities, and their governments, of the dangers of bribery.

Second, we should recognize that the victims of systematic bribery are generally the citizens of developing countries, and not their governments. Too often, the governments are complicit in the graft, and any monies returned to them would likely be squandered. If we want to benefit the people, we’ve probably got to bypass the government. Use an NGO or IGO.

Third, this effort should be multinational and collaborative. Create an organization comprised of both U.S. and Mexican citizens. Maybe even bring in the OECD, as this scholar recommends. Work together; don’t finger-point. Recognize that both sides played a role in this scheme. As the Mexican poet Homero Aridjis recently quipped, “If we put everyone who’s corrupt in jail, who will close the door?”

Bribery is both a supply-side and a demand-side problem. With some good old-fashioned American innovation, we can use the FCPA to address both.


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.

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