Chamber Music: Corporations Attain Harmony with Federal Corruption Laws

Is the U.S. Chamber of Commerce backing off its years-long campaign to gut the False Claims Act (FCA) and the Foreign Corrupt Practices Act (FCPA)?

One gets that impression from a new report by the Chamber’s Institute for Legal Reform, Lighting the Way: FCA Reform and Compliance Program Credit. The report by the legal advocacy arm of the pro-business Chamber makes no mention of weakening the FCA or the FCPA, the federal government’s key anti-corruption weapons. Instead, it strikes a conciliatory tone, asking the Department of Justice to incentivize companies to do right by both laws through a policy of rewarding companies that have strong corporate compliance and ethics programs. Rewards include reduced monetary penalties and helping corporate violators avoid suspension or debarment from federal contracting.

The FCA allows the government to recover taxpayer money stolen through fraud and protects those who blow the whistle on fraud and waste in government programs. Since 1986, it has enabled the government to recover more than $56 billion. The FCPA makes it illegal for companies to make payments to foreign government officials in order to obtain or retain government contracts, licenses, and other concessions. This 41-year-old law has enabled the government to hold accountable companies caught paying bribes to foreign officials.

For many years, the Chamber and other business interest groups have lobbied for so-called “reforms” intended to significantly weaken both laws. In the case of the FCA, they have sought added restrictions on whistleblowers’ ability to file lawsuits, and limits on monetary penalties. In the case of the FCPA, they have proposed removing liability for subsidiaries, allowing mergers to immunize past misconduct, imposing a higher burden of proof on the government, and narrowing the definition of a “foreign official.”

Lately, however, the business community seems to have de-escalated its war against both laws. Instead of seeking changes to the laws, the Chamber is pushing for a less extreme, more proactive “self-policing” policy of guaranteeing lenient treatment for companies that meet certain compliance and ethics benchmarks.

Of course, having effective compliance and ethics programs won’t ensure upstanding business behavior. The Project On Government Oversight’s Federal Contractor Misconduct Database and Good Jobs First’s Violation Tracker make abundantly clear that even the purportedly "most admired" and "best-regarded" companies often have track records replete with misconduct.

The FCA and FCPA are conspicuously absent from the issues listed in the Chamber’s most recent lobbying disclosure records. Perhaps corporate America has rethought its previous hardline stance and is more willing to cooperate with the government. Even the Chamber openly acknowledges the FCA “is the government’s most important tool to uncover and punish fraud against the United States” and “is essential to protect the government.” Pro-business interests currently control all three branches of government, and the Justice Department is aggressively seeking to dismiss "meritless" FCA lawsuits while pursuing an FCPA enforcement policy based on carrots rather than sticks. Still, we can hope that the Chamber’s recognition of the importance of these laws means it will stop trying to undermine them.