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Fight brews over anti-bribery law as fines jump

Sep 15, 2011, 3:50 p.m.

By Andrew Longstreth

(Reuters) - The Chamber of Commerce has put reshaping a U.S. anti-bribery law near the top of its legislative wish list, setting up a battle pitting the powerful business lobby group against supporters of the statute who say it helps fight corporate corruption abroad.

The 34-year-old Foreign Corrupt Practices Act was lightly enforced in its first two decades but has become a favorite tool of federal prosecutors in recent years. FCPA enforcement hit an all-time high last year as eight companies, including BAE Systems and Daimler AG, reached settlements in separate cases together totaling $1.6 billion.

Lobbying is intensifying amid the prospect that legislation may soon be introduced in Congress to amend the law, possibly as soon as next month. Anti-corruption and human rights groups are opposing changes sought by the Chamber.

"They're trying to take the teeth out of the FCPA," said Heather Lowe, legal counsel at Global Financial Integrity, a nonprofit organization focused on the cross-border flow of illegal money.

The FCPA makes it illegal to bribe foreign officials to obtain business. It's unclear what specific changes to the law will be proposed, though the Chamber of Commerce has argued that the law needs to better define a "foreign official" and companies that form compliance programs should not be held responsible for acts of a rogue employee.

The business lobby group has enlisted some legal heavyweights to help make its case to legislators, including a former U.S. attorney general and a leader of the government task force that investigated Enron.

Critics have argued that the law is an economic drag on U.S. companies and puts them at a competitive disadvantage to foreign rivals that do not face the same exposure.

Supporters say the law does not harm competitiveness. They point out that more than half of the top 10 FCPA fines assessed by the U.S. government were against foreign companies. The FCPA helps level the playing field for American companies, they say.

"We think reducing bribery actually lowers the costs of doing business," said Stefanie Ostfeld, policy advisor for Global Witness, an anti-corruption group.

A group of nonprofit organizations that support the law, including billionaire financier George Soros's Open Society Foundations, are hosting a Congressional briefing on Friday. Panelists are expected to defend FCPA enforcement and criticize changes sought by the Chamber of Commerce.

The panelists will include David Kennedy, director of the Institute for Global Law and Policy at Harvard Law School, and Dan Danielsen, of Northeastern University School of Law. They are expected to frame the debate in terms of whether the United States will continue to lead the world in setting global anti-corruption standards. The Chamber is trying to make the debate in part about jobs and the economy.

CHAMBER ISSUE

Last year, the Chamber's Institute for Legal Reform issued a policy paper, called "Restoring Balance," in which it said some companies were forced into unfair settlements.

The paper proposed five amendments to the FCPA, including a defense for companies that institute anti-bribery compliance programs, a new definition of a "foreign official," and a "willfulness" requirement for corporate criminal liability.

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