王的盛宴韩信最后:What Can India Learn from the U.S. Battle on Bribery?

By Josh Goodman

Danish Siddiqui/Reuters
A supporter of veteran Indian social activist Anna Hazare waves the national flag in Mumbai.
As the lively public debate over how to tackle corruption in India continues, the U.S. government has been fighting its own battle against bribery. In the most recent development, a trial concluded in a landmark case involving a dramatic sting operation targeting a group of military equipment dealers.
The sting was carried out in 2009 by U.S. government agents posing as representatives of the defense minister of Gabon. They managed to snare 22 businessmen for participating in an alleged scheme to bribe the minister in order to win a multi-million dollar military contract. No Gabonese officials were involved.
But on Jan. 31, the case against three of the businessmen caught in the sting ended in a mistrial after the jurycouldn’t agree on a verdict. The previous day, the same jury acquitted two other defendants in the case. Last summer, a prior trial also arising out of the sting ended in a hung jury.
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While commentators are branding the failure to obtain any convictions as a setback to U.S. anticorruption prosecutors, the Gabon case and its aggressive undercover tactics signal how seriously the U.S. government is taking the war against corruption by multinational businesses. It is a robust law enforcement effort that has yielded billions of dollars in corruption fines.
Yet, as recently as a decade ago, the U.S. law that bans businesses from bribing foreign government officials — the Foreign Corrupt Practices Act — was largely forgotten and rarely enforced.  With India’s own proposed anticorruption reforms continuing on the legislative agenda, there are a few lessons that might be drawn from the striking turnaround in the American fight against international corporate bribery in recent years.
Lesson number one is that the laws on the books matter little without the political will and the resources to back up enforcement. The Foreign Corrupt Practices Act was enacted in 1977 following revelations related to the Watergate scandal involving U.S. President Richard Nixon.  But the law remained mostly dormant until federal prosecutors in the early 2000s seriously began launching investigations and bringing cases. This history provides an interesting perspective for the ongoing debate over the provisions of the proposed Lokpal bill, which would create an anticorruption ombudsman for India. While the specifics of any anticorruption scheme are important, legal tools cannot function without the will and resources to investigate and charge violations.
The Gabon sting case neatly illustrates another key element of the U.S. strategy: Making an example of high-profile defendants.
Corporations with multinational operations have followed the Gabon case closely and, even though no defendants have been convicted at trial, the high stakes drama of the case has captured the attention of companies and businessmen. Similarly, the U.S. has settled other bribery cases against well-known companies with enormous fines. German multinational Siemens AG paid $1.6 billion in joint U.S. and German fines to settle bribery charges in 2008, and Daimler AG paid $185 million to settle charges in 2010. Both companies were also required to retain outside monitors to supervise their anti-bribery efforts. In Daimler’s case, the company retained Louis Freeh, the former director of the U.S. Federal Bureau of Investigation. It takes only a few such high-profile cases to demonstrate that the government is serious about combating corruption and to create a powerful deterrent effect.
Making an example of major defendants carries with it a cautionary corollary, however: Beware of overreaching. The U.S. enforcement push against multinational bribery has been so successful that some business groups are now lobbying the U.S. Congress to limit the anti-bribery laws. A recenteditorial in The Wall Street Journal also argued that while the U.S. “bribery law has served a useful purpose over the years,” now “overzealous prosecution is leading to uncertainty and injustice.”
This backlash may result in part from prosecutors pressing ahead too quickly, without giving the business community time to adjust to the robust enforcement of the law. Aggressive enforcement tactics, like stings, may be best reserved for the most egregious of violators.
The Daimler and Siemens cases also illustrate another anticorruption technique the U.S. government has used effectively: Enlisting private sector allies and assistance in anti-bribery enforcement. Many companies that have settled U.S. bribery charges have been required to hire legal or law enforcement professionals to supervise their future behavior, like Mr. Freeh in Daimler’s case. U.S. advisory sentencing guidelines also suggest lighter penalties for firms that have implemented a serious program to prevent bribery by their staff, including by hiring outside professional advisers. In India, where the focus is more on government corruption than corporate behavior, the principle of enlisting outside support might apply in different ways. For example, the government could contract top consultants, law firms and accountants to independently audit governmental functions and propose plans to reduce corruption.
Perhaps the central lesson of the American experience is the importance of creating stakeholders in the fight against corruption. U.S. law enforcement efforts have created a community of professionals and businesses dedicated to helping combat corporate bribery most effectively. This community includes business executives, auditors and lawyers who work at multinational corporations, outside law firms, accountants, and consultancies, as well as analysts and academics. While prosecutors pursue criminal corruption charges, this community of professionals works proactively by cultivating ethical business practices and by teaching and advising the staff of multinational corporations on promoting transparency.
Research shows that it is easiest to beat bad habits – like eating an unhealthy diet or smoking – with a supportive social network. The same is true in fighting corruption. The proposed Lokpal bill would create official stakeholders in India’s fight against graft by forming a government office with an anti-corruption mission, but the U.S. experience teaches that meaningful support from the private sector and from civil society is critically important.
To be sure, there are differences between the scourge of official corruption targeted by recent reform efforts in India and the international business corruption targeted by the U.S. Foreign Corrupt Practices Act. Yet, at bottom, the fight against both types of corruption aims to protect the integrity of political institutions and to promote fairness, freedom, and equality of opportunity for businesses and individuals. These values are paramount for any thriving democracy. The recent bribery enforcement wave in the U.S. may therefore offer valuable lessons to the world’s largest democracy as it confronts its own corruption challenge.
Josh Goodman is an attorney in Washington, D.C. and a former editor of the Harvard International Law Journal.