America


U.S. Corruption Law Makes Business Less Competitive


In an era of raging recession, businesses are foundering under restrictive regulations.


A BY CHUCK GREEN


merican businesses lose billions of dollars each year to foreign companies that are all too happy to


lay down a little baksheesh in order to grease the wheels of international commerce — while U.S. companies have to compete with one hand tied behind their backs, hindered by restrictive regulations that experts say put them at a serious disadvantage. Enemy No. 1 in the battle to make


U.S. business more competitive abroad, they say: the Foreign Corrupt Practices Act (FCPA), designed to pre- vent U.S. companies from engaging in bribery as they do business abroad. The U.S. Chamber of Commerce


has launched a lobbying effort to amend the law. The cham- ber argues the act is vague, overbroad, and detrimental to U.S. businesses. But Sec- retary of State Hillary Clin- ton has come to the act’s defense, saying the Obama administration is “unequiv- ocally opposed” to weaken- ing the FCPA. According to Jon May, a Miami-based attorney who specializes in defending tar- gets of FCPA probes, the act is pun- ishing corporations for circumstances that are beyond their control. “You simply can’t obtain certain services, such as licenses and permits,


14 NEWSMAX | AUGUST 2012


WALMART WOES Walmart is being targeted after allegedly using bribes to obtain permits for its Mexico presence, though experts say payoffs are part of the business climate there.


in various countries without paying the responsible official,” says May. He adds that prosecuting American businesses and CEOs when they try to compete abroad means “they can’t engage in commercial activity in that foreign venue.” No one questions the


ROAD PAVED Carter enacted FCPA in 1977.


law’s good intentions. It was enacted in 1977 during the presidency of Jimmy Cart- er, an era characterized by an emphasis on restoring America’s moral credibility following Watergate and the Vietnam War. “The act is a relic of the 1970s, enacted in a different era and when the world was a much less competitive and complicat-


ed place,” said Daniel Wagner, the CEO of Country Risk Solutions, a firm that provides risk-management solu- tions to investors, traders, and lenders doing business overseas.


Several major U.S. corporations,


including Walmart and the casino company headed by billionaire Shel- don Adelson, have been targeted for investigations by the government, after allegations of undue influence. In Walmart’s case, the Justice Department opened a FCPA inves- tigation in late 2011 after the firm’s Mexican subsidiary allegedly bribed officials at the municipal and state level in order to obtain permits and licenses. That the permits and licens- es might otherwise be impossible to obtain is apparently irrelevant. In February 2011, Adelson’s Sands


casino company revealed it was the target of a FCPA investigation, alleg- edly for involvement with Chinese organized crime groups at its gaming operations in Macau. But corruption there is described as a “major and growing problem,” according to a 2011 report from the U.S. Congressional- Executive Commission on China. May


WALMART/FRANCISCO GUASCO/EPA/NEWSCOM / CARTER/AP IMAGES


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