The Foreign Corrupt Practices Act, or FCPA, is an act that was put into place in 1977 to control the dealings US persons or entities would have with foreign officials. The act make it unlawful for any US party to pay, whether it is directly or indirectly, with money or anything else of value, to a foreign official in exchange for obtaining or retaining a business (FCPA Enforcement). In addition to this, any company that trades securities in the US is required to file periodic report to the Securities and Exchange Commission to have record of any business transactions in order to maintain effective internal controls (Department of Justice). In the US, most contracts are formed privately allowing entities to control their business effectively preventing the problem the FCPA tries to resolve. No party is going to take a bribe that is not in their benefit and most of entities do not have jurisdiction over the contracts of others to be able to take any control. In many other countries, however, it is quite the opposite. It is the government that controls the contracts for major construction and manufacturing. Because of this, many entities in these countries will pay or bribe officials in order to get business contracts in their favor. Since this type of policy also applies to foreign entities doing business in these countries, many US businesses would follow this practice even though in the US this was not the norm (Miller & Hollowell, 2011, p. 22). For this reason the FCPA was created. It allowed the US to keep entities from using foreign business as a way to pay their way into beneficial contracts which they could not in the US. It also prevents foreign entities from having this advantage if doing business in the US. The r... ... middle of paper ... ...mber 15, 2011, from FindLaw: http://library.findlaw.com/1997/Jan/1/126234.html Miller, R. L., & Hollowell, W. E. (2011). Business Law: Text & Exercises 6th Edition. In R. L. Miller, & W. E. Hollowell, Business Law: Text & Exercises 6th Edition (pp. 22-23). Mason: South-Western Cengage Learning. Smith, Gambrell& Russell, LLP. (n.d.). The Foreign Corrupt Practices Act. Retrieved September 15, 2011, from Smith, Gambrell& Russell, LLP: http://www.sgrlaw.com/resources/trust_the_leaders/leaders_issues/ttl15/836/ Stackhouse, D. (1993, April 21). Retrieved September 13, 2011, from IceMiller LLP: http://www.icemiller.com/publication_detail/id/45/index.aspx Steskal, C. J. (2008, January 29). United States: The Foreign Corrupt Practices Act: The Next Corporate Scandal? Retrieved September 16, 2011, from mondaq: http://www.mondaq.com/unitedstates/article.asp?articleid=56616
The Sarbanes-Oxley Act was drafted to encourage and protect whistleblowers from retaliation after the fraud scandal that cause the collapse of Enron in 2001. In a 2010 Senate Report found that “external auditors detected only 4.1 percent of uncovered fraud schemes, “whistleblower tips detected 54.1% of uncovered fraud schemes in public companies” and were thirteen times more effective than external audits” (Turpan, 2016). Whistleblowers serve an important service to the public and are more effective than external audits. The CFAA has been used to by employers to retaliate against employees who act as informants for agencies like Internal Revenue Service or Security Exchange Commission to expose fraud. There employees, not to their financial gain, gather information as evidence of fraud by the company. With a broad interpretation of CFAA, the employee would "exceed their authority" and was "unauthorized" to access the information, therefore allowing the company to hide their illegal
Webb, P. (2005). The United Nations Convention Against Corruption: Global achievement or missed opportunity? Journal of International Economic Law, 8(1), 191-229.
—. Spotlight on Foreign Corrupt Practices Act. 14 November 2012. Web. 20 February 2014. .
Sabino, Anthony Michael, and Michael A. Sabino. "From Chiarella to Cuban: The Continuing Evolution of the Law of Insider Trading." 2011.Web.
The FCPA applies to any person who has a certain degree of connection to the United States and involves in foreign corrupt practices. The Act also applies to any act by U.S. businesses, foreign corporations trading securities in the United States, American nationals, citizens, and residents acting in furtherance of a foreign corrupt practice whether or not they are physically present in the United States. In the case of foreign natural and legal persons the Act covers their actions if they are in the United States at the time of the corrupt conduct. The Act governs not only payments to foreign officials, candidates, and parties, but any other receiver if part of the bribe is ultimately attributable to a foreign official, candidate, or party. These payments are not restricted to just monetary forms and may include anything of value.
The major provision to the FECA that resulted from the misuse of money and Watergate scandal is the prohibition of donations directly from corporations, labor organizations, and national banks. There were also prohibitions against donations from government contractors, foreign nationals, ca...
This was the question asked in the case Mathews v. United States in 1988. The defendant, an employee of the Small Business Administration (SBA), was the contact for James DeShazer, the president of a company, which participated in the SBA (“Mathews v. United States”). DeShazer believed that he was not being provided with all of the benefits of the program, so he worked together with the FBI to request a loan from the defendant, attached to a bribe. The defendant agreed to these conditions and met up with DeShazer to exchange the money. The defendant was immediately arrested on a federal offense for accepting a bribe in exchange for an official act (“Mathews v. United States”). The defendant asked for an entrapment defense but the Court struck down his motion because the defendant would not agree to all the elements, and the Judged ruled that the jury would not hear an instruction of
Despite the longstanding acceptance and promotion for the crime-fraud exception, it appears that the use of the exception to report fraud has been relatively scant and use of ethical rules to sanction lawyers is similarly rare. For those that may favor private regulation or the ability of the market to dictate its own terms it seems that the equilibrium reached was one without lawyers disclosing of their own accord. This could be just viewed as an information failure problem—even if the ability to report fraud up the ladder was technically already available, lack of knowledge may have prevented lawyers from reporting fraud when they otherwise would have done so.
Often times, Americans do not realize the corruption that surrounds them in their nation. Capitalism is an economic and political system in which the country’s trade and industry is controlled by private owners for profit, rather than by the state. Business owners, CEO’s, corporations, and large businesses have the propensity of taking extreme advantage of the power capitalism brings. For decades companies and corporations have been taking unexplainable benefit of the power they have. Capitalism in the Unites States leads to corruption.
The cons to the argument for saying the Foreign Corrupt Practices Act is obsolete is discussed in the article With Wal-Mart Claims, Greater Attention on a Law by Charlie Savage. In this article Charlie Savage argues that the FCPA has always been a useful tool in stopping corruption but in recent years with companies becoming more globalized other countries gradually adopted similar laws, the United States has started to enforce it more strictly. The dollar amount of fines imposed by the Justice Department and the Securities and Exchange Commission has increased even more, including a record-setting $800 million paid by Siemens in 2008. Enforcement under the act has soared, from just two enforcement actions in 2004 to 48 in 2010. There are currently at least 100 open investigations, specialists estimate.
While some of this bribery can simply expedite decisions and actions, other situations may involve a distortion of business outcomes. Meanwhile, government officials in positions to alter the firm’s overall profitability may receive substantial payments. Funds that rightfully belong to the public may be diverted into private hands. Firms that would have paid fees to the government may be able to reduce their financial obligations. Corruption distorts free market outcomes, resulting in business and government decisions that reduce efficiency and so reduce a nation’s aggregate production. Some investors may reject potential business dealings in certain cultures because of the presence of corruption. Recent years have witnessed global attempts to reduce corruption, and many nations now treat corruption as a crime. In this context, management encounters issues that challenge ethical positions and that involve risks of legal prosecution, as well as impacting potential
[7] Cavendish Lawcards Series (2002) Company Law (3rd edn), p.15 [8] [1976] 3 All ER 462, CA. [9] Griffin, S. (1996) Company Law Fundamental Principles (2nd edn), p.19 [10] [1990] Ch 433. [11] Lecture notes [12] Lecture notes [13] [1939] 4 All ER 116.
The purpose of this paper is to be able to provide an example of a recent scandal about usual unethical behavioral occurrences in Mexico. This paper aims at addressing the principal factors; actors involved, consequences and outcomes of unethical behavior, it also analyzes the impairment done to workers, companies, oil Mexican industry and the Mexican government. This paper is an attempt to shed light among Mexican citizens and provides an international perspective of the white-collar crime perpetrated by Oceanografia, PEMEX and CitiBank Inc. In addition, implications and penalties faced by each person engaged
Corruption is a cancer that spreads rapidly all over the body. It’s a big hurdle in the prosperity of the nations. Due to concrete measures in Australia, Canada and few European countries corruption has dropped extensively, nevertheless in developing and underdeveloped countries (especially Afghanistan and Somalia) it is still a critical problem. According to the Global Corruption Barometer 2013 released by Transparency international, a worldwide survey conducted with 114,000 people that analyze bribery and political corruption in 107 countries. It was found in the report that, bribery and corruption are widespread across both developed and underdeveloped countries. More than 50 percent of the respondents from survey said that the corruption had worsened in the recent past, and 27 percent of them admitted to offering bribes in order to get their work done in public services and institutions (Wills 2013).
The existence of bribery and unethical behavior is rampant in the world market and may not change overnight. The question of bribery has been distilled in business literature as a question of ethics. In this situation at the airport with the customs officer, it is important to distinguish between business ethics and personal ethics. In a business ethics situation, the Foreign Corruption Practices Act would prohibit offering any bribe to the custom office – for example to free a shipment of goods that was lost in red tape (Pitman & Sanford, 2006). Most companies also have policies against bribery as well. In this situation, however the main issue at hand is that of personal ethics. When in a situation where your company is unknown and there is no business being conducted, normal business ethics and laws (including FCPA) do not apply only personal ethical standards.