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As the Department of Justice Tuesday abandoned a large-scale foreign bribery case, the U.S. Chamber of Commerce pressed corruption watchdogs for guidance on a law prohibiting American companies from paying off foreign government officials.
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The Chamber sent a letter to the Justice Department's criminal chief and the Securities and Exchange Commission's enforcement director about companies struggling to conduct business internationally under the Foreign Corrupt Practices Act, a Watergate-era law that has seen new life under the Obama administration.
Obama's Justice Department in 2010 scored a record $1.8 billion in settlements. Yet prosecutors often cut deals in FCPA cases, which are lodged against U.S.-based companies or those listed in U.S. stock exchanges.
The Justice Department has had a difficult time when prosecutions do go to trial, as was the case Tuesday when a court agreed to dismiss indictments against 16 defendants after two hung juries, three acquittals and no convictions; there were three guilty pleas resulting from an investigation that ended in a Las Vegas sting operation netting 22 businessmen.
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Without case law to follow, corporations say regulators must better define what constitutes a "foreign official" or an "instrument" of a government. The business lobby has long complained about the vague definitions, creating pitfalls for companies operating in foreign markets where governments have a heavy presence.
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"It is often difficult for companies to determine when they are dealing with 'foreign officials,' particularly in markets in which many companies are at least partially state-owned," the Chamber's letter said. "The result of these circumstances has been a chilling effect on legitimate business activity."
The Chamber's gripe with the FCPA is that it is difficult to apply the law to real-world situations. The group's letter questions whether wining and dining foreign officials is a violation; asks for a liability shield when buying another company with a history of corruption; and requests tips on setting up a compliance program.
While the Chamber is asking for some guidelines, it has been lobbying Congress to narrow the FCPA's scope. The group hired Michael Mukasey, a former federal judge and President George W. Bush's attorney general.
FCPA Guidance Letter 02-21-2012
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