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FCPA: An act of punitive moralism

Walter Olson | May 8, 2018

Scenario: an American city hires an Asian-based bank to float a bond deal. Scandal! Turns out the bank wined and dined the mayor and council and treated them to sports events. After an investigation, the Asian bank agrees to put things right by paying millions of dollars to the government of France.

That’s crazy, right? What does any of this have to do with the government of France? But it’s certainly no crazier than the workings of our own Foreign Corrupt Practices Act, under which European companies have been made to pay penalties of $398 million and $240 million to the U.S. government over bribes paid to officials in Nigeria and Iran, respectively.

Enacted in 1977, the Foreign Corrupt Practices Act is a feel-good exercise in over-criminalization that tempts revenue-hungry American regulators to insult coequally sovereign governments by meddling in overseas wrongdoing they would have been willing to check into and punish...

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