Antibribery Track Record: Republicans vs. DemocratsAlexandra Wrage Corporate Counsel
10-24-2012
Yesterday, we examined the bribery schemes of two former congressmen—one a Democrat and the other a Republican—currently sitting in jail for their crimes (“In Politics and Bribery, Neither Party Has Clean Hands”). Today, we look at the successes and failures of Republican and Democratic presidencies as they worked to control the crime of corruption.
I do have to note one significant caveat: Everything that has occurred during a Republican president’s term is attributed to that party, and everything that occurred during a Democratic presidency is attributed to that party, even when the correlation between the activity and the administration is weak. Indeed, diplomatic efforts move so slowly that some of these victories may well be attributable to the previous administration.
Laws and Conventions
Domestic public corruption has always been criminalized by the laws of the United States, but it wasn’t until 1977 that the bribery of foreign officials was criminalized. In response to an inquiry by the Securities and Exchange Commission, hundreds of U.S. companies revealed illegal payments to foreign officials. Congress decided to do something about it, and under the Democratic administration of President Jimmy Carter enacted the Foreign Corrupt Practices Act in 1977.
Game-changing first point: Democrats.
It was also during a Democratic administration—Bill Clinton’s—that the Inter-American Convention Against Corruption was signed in 1996 and ratified in 2000, within the framework of the Organization of American States. The stated purpose of the convention is to promote and strengthen each state’s ability to prevent, detect, punish, and eradicate corruption. It provides for cooperation between law-enforcement bodies in the signatory states, and allows for the freezing and seizure of assets where warranted.
First team effort: Democrats.
The United Nations Convention Against Corruption (UNCAC), on the other hand, was signed during the administration of Republican President George W. Bush in 2003 and ratified in 2006. The UNCAC has been signed by 140 nations.
Most widely attended anticorruption event: Republicans.
During the past two and a half decades, three U.S. presidents have welcomed 27 countries into the antibribery camp, as each in turn has acceded to the Organisation for Economic Co-operation and Development (OECD) Convention and begun the process of implementing it. During President Clinton’s administration, 16 countries signed the convention; under his successor, President Bush, nine countries signed on; and under President Barack Obama, two countries, Israel and Russia, have acceded to the OECD Convention.
Most OECD victories: Democrats.
Innovation
Beyond the enactment of laws and the negotiation of international conventions, various U.S. administrations have focused a great deal of attention on new initiatives. Some of these programs involve international bodies such as the World Bank, which are not under the control of any U.S. administration (although nominating the bank’s president is the prerogative of the President of the United States, subject to confirmation by the World Bank’s Board of Governors).
George W. Bush’s Republican administration dominates the record of innovation, presiding over three initiatives. He issued Presidential Proclamation 7750, more commonly known as “No Safe Haven,” in 2004. The proclamation gives legal authority to the Secretary of State to deny entry into the United States to individuals involved in public corruption. Next was the introduction in 2007 of the Stolen Asset Recovery (STaR) Initiative, a World Bank and United Nations program designed to help nations recover assets stolen by corrupt leaders. This Bush administration also led the National Strategy to Internationalize Efforts Against Kleptocracy in 2006 , which draws on the enforcement capabilities of a number of different agencies in order to deny corrupt foreign officials safe haven in the United States for themselves or their assets.
Innovation hat trick: Republicans.
Asset recovery really got underway, however, when the U.S. Department of Justice under President Obama introduced the Kleptocracy Asset Recovery Initiative in 2010. This initiative allocates more resources to asset recovery and facilitates international cooperation so that U.S. authorities can assist other countries to recover illicitly obtained assets. The first forfeiture judgment ever obtained under the new asset recovery initiative was issued earlier this year, when the DOJ successfully pursued $401,931 in assets belonging to the former governor of a Nigerian state.
Keeping up the pressure on the opposition: Democrats.
Existing Laws and New Initiatives toward Anticorruption Enforcement
FCPA Enforcement
The Department of Justice is of course independent of the executive, but the Attorney General who leads the department does establish priorities in accordance with the policies of the administration—and here, the Democrats have pulled ahead.
Prosecutions under the FCPA were sluggish during the early years after the law’s enactment. Only after accession to the OECD Anti-Bribery Convention (under President Clinton) and implementation of the 1998 amendments to the FCPA did enforcement of the law begin to be applied in earnest. A notable increase in enforcement activity, however, did not occur until the later years of the Bush administration. Linking corruption to national security, the Bush White House began aggressively enforcing the FCPA, and President Obama has continued on the same path. Some critics of the FCPA believe that a Mitt Romney administration would result in a slowdown of FCPA enforcement activity, but if history is any indication, this seems an unlikely outcome.
Leading in enforcement: Democrats, but with multiple assists from Republicans.
FCPA Enforcement by President
With points given to both Democrats and Republicans, I am not courageous enough to proclaim a winner between the two parties with respect to antibribery efforts—especially in concurrence with the only presidential debate on foreign policy. However, as with the debates and any other election-year events, observers are likely to declare their own party the winner.
Alexandra Wrage is the president of TRACE, an antibribery compliance organization offering practical tools and services to multinational companies. TRACE offers several antibribery training resources to members and non-members including the training DVD, Toxic Transactions: Bribery, Extortion, and the High Price of Bad Business. TRACE recently launched TRAC, a publicly accessible platform that establishes a global standard for baselines due diligence and makes the information available to companies at no cost.
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