Trumping recidivism: Assessing the FCPA corporate enforcement policy
Columbia Law Review , Volume 118 - Issue 6 p. 135- 152
Bribery and corruption violations are often hard to detect. For this reason, the U.S. enforcement authorities typically struggle to produce the right incentives for corporations to cooperate with public enforcement efforts in anticorruption cases. In November 2017, following the successful implementation of an eighteen-month pilot program, the Trump Administration announced its revised Foreign Corrupt Practices Act (FCPA) Corporate Enforcement Policy. The new policy offers significant benefits to corporations that voluntarily self-report their involvement in corruption, cooperate with the Department of Justice’s investigation, and take remediation actions. However, under the FCPA Corporate Enforcement Policy, corporate recidivists—repeat violators of the FCPA—are not eligible for the policy’s benefits. Although in many respects the new policy may represent an important step toward the establishment of an efficient cooperative-enforcement regime, a closer examination of the policy reveals its major shortcoming—that is, the very exclusion of recidivists. This Piece assesses the expected effect of the new policy on a corporation’s motivation to cooperate with enforcement authorities. In addition, this Piece suggests that the exclusion of FCPA recidivists not only weakens the overall positive impact of the revised policy but may also render the entire policy counterproductive to its own enforcement goals. Following a law and economics approach, this contribution proposes amendments to the policy that will increase its social desirability.