Editing Foreign Corrupt Practices Act (section)

==History==
In 1975 and 1976, American public life was shaken by dozens of scandals involving bribery of foreign officials by prominent American companies. These disclosures, driven by [[U.S. Securities and Exchange Commission|Securities and Exchange Commission]] (SEC) enforcement actions and high-profile public hearings by the Church Subcommittee on Multinational Corporations, made headlines for months causing serious problems for foreign leaders important to the United States. Some of the most sensational disclosures involved corrupt payments by [[Northrop Corporation|Northrop]], [[Lockheed Corporation|Lockheed]], [[United Brands]], [[Gulf Oil]], and [[Mobil]] in Saudi Arabia, Japan, Honduras, Korea, Italy, and the Netherlands. The headlines were punctuated by suicides of corporate executives and foreign officials. One CEO jumped out a window. A European dignitary stepped in front of a streetcar.<ref>Feldman, M. B., [https://adst.org/OH%20TOCs/Feldman.Mark.pdf The Association for Diplomatic Studies and Training Foreign Affairs Oral History Project: Mark B. Feldman], interviewed by Robin Matthewman, p. 97, initial interview date 28 April 28 2021, accessed 3 July 2022</ref>

Investigations by the SEC in the mid-1970s revealed that over 400 U.S. companies admitted making questionable or illegal payments in excess of $300 million to foreign government officials, politicians, and political parties.<ref name=house>{{cite web|title=H.R. Rep. 95-640 Report Together with Minority Views To accompany H.R.3815|author=House Committee on Interstate and Foreign Commerce|url=https://www.justice.gov/criminal/fraud/fcpa/history/1977/houseprt-95-640.pdf|date=September 28, 1977|access-date=22 February 2015|archive-url=https://web.archive.org/web/20150412033039/http://www.justice.gov/criminal/fraud/fcpa/history/1977/houseprt-95-640.pdf|archive-date=12 April 2015|url-status=live}}</ref> The abuses ran the gamut from [[bribery]] of high foreign officials to secure some type of favorable action by a foreign government, to so-called [[facilitating payment]]s that were made to ensure that government functionaries discharged certain ministerial or clerical duties.<ref name=house /> If the official has no choice but to bribe, and bribery is legal in the country, bribing is seen as necessary for "greasing the wheels", i.e. facilitating the conduct of business. Among the major examples of such practices were the [[Lockheed bribery scandals]], in which officials of [[aerospace]] company [[Lockheed Corporation|Lockheed]] paid foreign officials in several countries to favor their company's products,<ref>Rich, Ben R. and Janos, Leo. ''Skunk Works: A Personal Memoir of My Years at Lockheed''. New York: Little Brown & Co., 1994,  {{ISBN|0-7515-1503-5}}.</ref>{{rp|10}} and the [[Bananagate]] scandal, in which [[Chiquita Brands]] bribed the President of [[Honduras]] for more favorable government policies. 

While primarily a domestic scandal, [[Watergate scandal|Watergate]] also had international implications. Investigations revealed that slush funds used for political espionage against the Democrats were also used for bribing foreign officials. This linkage highlighted the pervasive nature of corruption in U.S. businesses and politics. These scandals notably involved substantial bribes paid to foreign officials to secure business advantages overseas, profoundly damaging the reputation of American businesses and, by extension, the U.S. government. This period highlighted a serious need for legislative action to address these corrupt practices. Investigations revealed that [[Richard Nixon|President Richard Nixon's]] reelection campaign, and other corporate entities, utilized funds for illicit purposes, including international bribery. This series of events not only led to President Nixon's resignation but also propelled a national and legislative push towards greater transparency and ethics in both domestic and international business dealings.<ref>{{Cite web |date=April 16, 2024 |title=Watergate Scandal |url=https://www.history.com/topics/1970s/watergate |access-date=April 25, 2024 |website=History.com}}</ref><ref>{{Cite web |last=Eberhardt |first=Anne |date=2018-07-03 |title=How the Foreign Corrupt Practices Act Came to Be |url=https://www.corporatecomplianceinsights.com/foreign-corrupt-practices-act-came/ |access-date=2024-04-26 |website=Corporate Compliance Insights |language=en-US}}</ref>

In response to these high-profile revelations, [[United States Congress|Congress]] enacted the FCPA to bring a halt to the bribery of foreign officials and to restore public confidence in the integrity of the American business system. The Act was signed into law by President [[Jimmy Carter]] on December 19, 1977. The enactment of the FCPA was a pivotal moment in U.S. legal history, as it marked the first significant effort to legally prohibit the bribery of foreign officials. It set a standard for moral leadership and integrity in international commerce, underscoring the importance of honest business practices in fostering stable and fair global markets. The first criminal enforcement action under the Act was against [[Finbar Kenny]].<ref>{{cite web|title=United States of America v. Kenny International Corp., et al.|url=http://fcpa.stanford.edu/enforcement-action.html?id=435|website=Foreign Corrupt Practices Act Clearinghouse|publisher=[[Stanford Law School]]|access-date=27 April 2018}}</ref> Kenny had advanced [[Albert Henry (politician)|Sir Albert Henry]], Prime Minister of the Cook Islands, $337,000 from postage stamp revenue for Henry's re-election campaign.<ref name="McBride">{{cite news|last1=McBride|first1=Stewart|title=The case of the airmailed voter and other tales of the Cook Is|url=https://www.csmonitor.com/1982/0304/030461.html|access-date=27 April 2018|work=[[Christian Science Monitor]]|date=4 March 1982|archive-url=https://web.archive.org/web/20180427120429/https://www.csmonitor.com/1982/0304/030461.html|archive-date=27 April 2018|url-status=live}}</ref> In 1979, Kenny became the first American to plead guilty of violating the FCPA and was fined $50,000.<ref name="McBride" />

=== Amendments ===
The Act was first amended by the [[Omnibus Trade and Competitiveness Act]] of 1988, where Title V is known as the "Foreign Corrupt Practices Act Amendments of 1988". It introduced a "knowing" standard in order to find violations of the Act, encompassing "conscious disregard" and "willful blindness." Other amendments were for "bona fide", "reasonable" and lawful gifts under the laws of the foreign country.<ref name="fas">{{cite web|url=https://www.fas.org/sgp/crs/misc/R41466.pdf|title=Foreign Corrupt Practices Act, Congressional Interest and Executive Enforcement|author=Michael V. Seitzinger|publisher=Congressional Research Service|work=CRS Report to U.S. Congress|date=February 7, 2012|page=11|access-date=22 February 2015|archive-url=https://web.archive.org/web/20141228201837/http://www.fas.org/sgp/crs/misc/R41466.pdf|archive-date=28 December 2014|url-status=live}}</ref> This meant that individuals and companies could be held liable for corrupt practices if they purposefully ignored the facts or circumstances that would lead a reasonable person to conclude that bribery was likely to occur. The amendments clarified that certain types of payments or gifts that are bona fide, reasonable, and lawful under the laws of the foreign country do not constitute an offense under the FCPA. This was important for U.S. businesses engaging in international operations where cultural norms often include gift-giving as a part of business etiquette.<ref>{{Cite web |title=International Business Etiquette Practices |url=https://www.business.com/articles/so-international-business-etiquette-from-around-the-world/ |access-date=2024-04-26 |website=business.com |language=en}}</ref><ref>{{Cite web |title=Five Countries Where Gift-Giving is Expected in Business {{!}} Cross Cultural Training |url=https://www.simonandsimon.co.uk/blog/cross-cultural-training/russia/five-countries-where-gift-giving-is-an-expected-part-of-business,%20https://www.simonandsimon.co.uk/blog/cross-cultural-training/russia/five-countries-where-gift-giving-is-an-expected-part-of-business |access-date=2024-04-26 |website=www.simonandsimon.co.uk |language=en-GB}}</ref>

The second amendment to the FCPA, known as the International [[International Anti-Bribery Act of 1998|Anti-Bribery Act of 1998]], was a significant development aimed at enhancing the United States' commitment to combating global corruption. This amendment was designed to implement the provisions of the [[OECD]] Anti-Bribery Convention, which sought to create a unified international approach to fighting bribery of foreign public officials in international business transactions.<ref>{{Cite web |title=U.S. Foreign Corrupt Practices Act |url=https://www.trade.gov/us-foreign-corrupt-practices-act |access-date=2024-04-26 |website=International Trade Administration |language=en}}</ref> One of the primary changes introduced by the 1998 amendment was the extension of the FCPA's jurisdiction to include certain foreign persons and entities. This meant that not only U.S. citizens and companies but also certain non-U.S. persons and companies acting in furtherance of a corrupt payment while in U.S. territory could be held accountable under the FCPA.<ref>{{Cite web |date=2015-06-09 |title=Criminal Division {{!}} Foreign Corrupt Practices Act |url=https://www.justice.gov/criminal/criminal-fraud/foreign-corrupt-practices-act |access-date=2024-04-26 |website=www.justice.gov |language=en}}</ref> This included making it a criminal offense to bribe foreign public officials to obtain or retain business or any improper advantage in the conduct of international business. The 1998 amendments increased the penalties for violations and strengthened enforcement measures.<ref>{{Cite web |title=A Resource Guide to the U.S. Foreign Corrupt Practices Act - Second Edition |url=https://www.justice.gov/criminal/criminal-fraud/file/1292051/dl |access-date=December 1, 2024 |website=[[U.S. Department of Justice]]}}</ref>

The FCPA dominated international [[anti-corruption]] enforcement from its introduction until {{circa|2010}} when other countries began introducing broader and more robust legislation, notably the United Kingdom [[Bribery Act 2010]].<ref>{{cite web|url=http://www.nortonrosefulbright.com/knowledge/publications/52195/differences-between-the-uk-bribery-act-and-the-us-foreign-corrupt-practices-act|title=Differences between the UK Bribery Act and the US Foreign Corrupt Practices Act|language=en-gb|access-date=2018-03-09|archive-url=https://web.archive.org/web/20180309183105/http://www.nortonrosefulbright.com/knowledge/publications/52195/differences-between-the-uk-bribery-act-and-the-us-foreign-corrupt-practices-act|archive-date=2018-03-09|url-status=live}}</ref><ref>{{cite journal|last=Breslin|first=Brigid|author2=Doron Ezickson|author3=John Kocoras|year=2010|title=The Bribery Act 2010: raising the bar above the US Foreign Corrupt Practices Act|journal=Company Lawyer|publisher=Sweet & Maxwell|volume=31|issue=11|issn=0144-1027|page=362}}</ref> The International Organization for Standardization introduced an international anti-bribery management system standard in 2016.<ref>{{cite web|url=http://knowledge.freshfields.com/m/Global/r/1698/new_global_framework_for_anti-bribery_and_corruption|title=New global framework for anti-bribery and corruption compliance programs Freshfields knowledge|website=knowledge.freshfields.com|access-date=2018-03-09|archive-url=https://web.archive.org/web/20180508010837/http://knowledge.freshfields.com/m/Global/r/1698/new_global_framework_for_anti-bribery_and_corruption|archive-date=2018-05-08|url-status=live}}</ref> In recent years, cooperation in enforcement action between countries has increased.<ref>{{cite web|url=https://www.freshfields.com/globalassets/services-page/global-investigations/publication-pdfs/gi-abc-guide-2017.pdf|title=Anti-bribery and corruption: global enforcement and legislative developments 2017|date=January 2017|publisher=Freshfields Bruckhaus Deringer|access-date=9 March 2018|archive-url=https://web.archive.org/web/20170905112405/https://www.freshfields.com/globalassets/services-page/global-investigations/publication-pdfs/gi-abc-guide-2017.pdf|archive-date=5 September 2017|url-status=live}}</ref>

==== Influence ====
The FCPA's influence has been profound, changing how companies operate worldwide and how governments enforce against corruption. The Act not only led to heightened awareness and enforcement of anti-corruption measures in the United States but also encouraged other nations to adopt similar laws,<ref>{{Cite journal |title=The FCPA and the Rule of Law Abroad |journal=The Foreign Service Journal |date=June 2016 |url=https://afsa.org/fcpa-and-rule-law-abroad |access-date=2024-04-23}}</ref> fostering a more coordinated international approach to combating bribery and corruption.FCPA and other anti corruption laws also provided companies with increased investor confidence,<ref>{{cite web |url=https://www.corporatecompliance.org/foreign-corrupt-practices-act-economic-impact-targeted-firms |title=The Foreign Corrupt Practices Act: Economic Impact on Targeted Firms &#124; SCCE Official Site }}</ref> allowing them to judge a companies' governing board by how ethically sound and compliant to FCPA they are and whether or not they deal and run their business in good faith.<ref>{{cite web |url=https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=6896&context=faculty_scholarship}}</ref> Not only did it influence companies to become more self aware of possible corruption within their companies, but it also allowed for a growth in business ethics education. There are now certifications and dedicated courses that provide students and up and coming business professionals with the necessary knowledge needed to avoid and terminate possible corruption within companies and foreign markets.<ref>{{cite web |url=https://www.businessatoecd.org/hubfs/Shaping%20the%20values%20for%20a%20sustainable%20future%20-%20Education%20for%20the%20fight%20against%20corruption.pdf?hsLang=en}}</ref>

=== Debates Surrounding Foreign Corrupt Practices ===
Dealing with foreign corrupt practices has many issues in itself.<ref>{{Cite news |last=Baruch |first=Hurd |date=1979-01-01 |title=The Foreign Corrupt Practices Act |url=https://hbr.org/1979/01/the-foreign-corrupt-practices-act |access-date=2024-04-25 |work=Harvard Business Review |issn=0017-8012}}</ref> It presents many conversations pertaining to the potential for political interference in an organization, jurisdiction, and political differences across capitals. International organizations may be impeded by differences in legal systems and diplomatic relations. The Government Accountability Office (GAO)<ref>{{Cite web |last=Office |first=U. S. Government Accountability |title=Impact of Foreign Corrupt Practices Act on U.S. Business |website=U.S. Government Accounting Office |url=https://www.gao.gov/products/115367 |access-date=2024-04-25 |language=en}}</ref> revealed in a report that while many companies supported the act and its efforts to improve corporate codes of conduct, there was also major dissatisfaction in regards to certain standards that the act had in place for financial reports. Arguing that there wasn't enough clarification about what the companies needed to report on, especially concerning money. This debate over financial reports has led to the concept of "materiality standard".<ref>{{Cite web |website=Securities and Exchange Commission |title=Assessing Materiality: Focusing on the Reasonable Investor When Evaluating Errors |url=https://www.sec.gov/news/statement/munter-statement-assessing-materiality-030922 |access-date=2024-04-25}}</ref>