WASHINGTON, DC – Last month, Tyco International paid the United States government $26 million in penalties for bribing officials in Thailand, Turkey, and elsewhere. In the last three years alone, fines for violations of the US Foreign Corrupt Practices Act (FCPA) – under which corporations with ties to the US face criminal penalties for paying bribes to foreign government officials – have exceeded $2.1 billion. Similar laws are enforced in more than 20 countries.
Beyond showing that the US and others are taking seriously the governance failures that frustrate citizens everywhere, the fines create an opportunity to stamp out corruption. Rather than treat the fines as national revenue – as in the US, where they are deposited directly into the national treasury – governments should apply them to addressing the root causes of corruption worldwide.
Congress enacted the FCPA in 1977, in the wake of Watergate, after revelations that more than 400 American companies had paid bribes totaling more than $300 million to foreign government officials and politicians. Over the last 35 years, the US Department of Justice has established strong enforcement mechanisms, leading to enhanced compliance efforts by firms.
Meanwhile, social movements in the Middle East, India, Russia, Malawi, the US, and elsewhere have challenged corruption, demanding increased accountability and transparency from governments and business leaders. Citizens are rejecting fraudulently negotiated mining contracts that imply high environmental and social costs and few benefits for the public. They are protesting poorly constructed water and transportation infrastructure. And they are demanding to know why essential medicines disappear before they reach patients.