Enforcing the FCPA: International Resonance and Domestic Strategy

The Foreign Corrupt Practices Act (“FCPA”), which bans corporations from offering bribes to foreign government officials, was enacted during the Watergate era’s crackdown on political corruption but remained only weakly enforced for its first two decades. American industry argued that the law created an uneven playing field in global commerce, which made robust enforcement politically unpopular. This Article documents how the executive branch strategically under-enforced the FCPA, while Congress and the President pushed for an international agreement that would bind other countries to rules similar to those of the United States. The Article establishes that U.S. officials ramped up enforcement only after the United States successfully concluded the Organisation for Economic Co-operation and Development (“OECD”) Anti-Bribery Convention in 1997, twenty years after the enactment of the FCPA. Afterward, U.S. officials, desiring to maintain industry support for the FCPA, prosecuted both foreign and domestic corporations, thereby minimizing the statute’s competitive costs for American companies.

This Article argues that the OECD Convention was critical to the dramatic expansion of FCPA enforcement because it allowed American prosecutors to adopt an “international-competition neutral” enforcement strategy, investigating domestic corporations and their foreign rivals alike. The existence of the treaty was decisive because it established anti-bribery as a binding legal principle and legitimized U.S. prosecutions of foreign corporations. Today, seven of the ten highest FCPA penalties have been against foreign corporations.

This Article advocates, on a theoretical level, for a reevaluation of the multidirectional relationship between international and domestic law in transnational issue areas, such as foreign bribery. National laws are most often viewed as self-contained legal rules that develop or decline based on domestic officials’ policy decisions. The evolution of the FCPA, however, demonstrates that some statutes may require “international resonance” to be meaningfully enforced: a domestic statute can create pressure for national leaders to conclude an international agreement, and then that agreement provides the means for the national law to develop into a robust national policy. As this Article establishes, the OECD Convention owed its existence to the FCPA and, in turn, the FCPA owes much of its development and strength to the OECD Convention. A greater appreciation for international resonance’s feedback mechanisms is essential to understanding national enforcement of a wide range of transnational commercial, financial, and environmental statutes.

A Cost-Benefit Analysis–Based Interpretation of Reciprocity Under Clean Air Act Section 115(c)

Section 115 of the Clean Air Act provides for the regulation of international pollutants, and has been considered as a potential source of authority for regulating greenhouse gas emissions. In order to trigger the authority of the Environmental Protection Agency (“EPA”) to regulate under Section 115, EPA’s Administrator must determine that the relevant foreign countries have given the United States “essentially the same rights” as Section 115 gives those countries. This Note proposes a novel interpretation of this reciprocity requirement based on cost-benefit analysis (“CBA”). On this CBA-based interpretation, the reciprocity requirement is satisfied where the benefits that the United States receives from all countries’ emission reductions outweigh the costs of reducing its own emissions.

The CBA-based interpretation is consistent with trends in administrative law toward requiring agencies to consider the costs and benefits of regulation, and with a plausible reading of Section 115 as giving foreign countries the right to mutually beneficial emission reductions. The CBA-based interpretation also has legal and policy advantages: it may help avert challenges to regulation of greenhouse gas emissions under Section 115 based on the major questions doctrine, it may show that climate regulation is cost justified based on domestic climate benefits even if ancillary benefits and foreign benefits are not considered, and it may represent a rational strategy for approaching international environmental negotiations that could lead to an efficient outcome in the case of climate change if adopted by all parties.

This Note illustrates the CBA-based interpretation of reciprocity by applying it to the United States’ pledge under the Paris Climate Agreement.

Legislative Underwrites

This Article introduces a widespread but virtually unacknowledged practice in Congress and state legislatures. Not only do legislatures override judicial decisions when they disagree with judicial rulings and doctrine, they also underwrite judicial decisions when they agree with those rulings. For all the literature on the adversarial communication evidenced through legislative overriding, there is not a single paper devoted to legislative underwrites, which reflect more collaborative dimensions of interbranch interaction. This Article begins to fill that void, and in so doing, frames practical and theoretical lessons for legislative, judicial, and scholarly audiences.

More specifically, this Article defines the contours of an underwrite and identifies the diversity of underwrite initiatives in Congress and state legislatures. It then normatively evaluates costs and benefits that might flow from a more self-conscious approach to underwrites, analyzing these pros and cons as they operate at pragmatic, doctrinal, and conceptual levels.