8/4/2019 Raymond Baker Letter to Rep Jim Sensenbrenner

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A Program of the Center for International Policy

1319 18th Street, NW, Suite 200 | Washington, DC | 20036Tel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfip.org

Director: Raymond Baker Managing Director: Tom CardamoneAdvisory Board: Lord Daniel Brennan (Co-Chair), Krishen Mehta (Co-Chair), Jack Blum, John Heimann, Ken Jensen, Eva Joly,

David Landes, Robert Morgenthau, Moiss Nam, Ngozi Okonjo-Iweala, Thomas Pogge, John Whitehead

6 September 2011

Congressman Jim Sensenbrenner2449 Rayburn House Office BuildingWashington, D.C. 20515-4905

Dear Chairman Sensenbrenner;

I write with the support of many others to express alarm that an attempt might be

forthcoming to reduce corporate liability under the U.S. Foreign Corrupt Practices Act.

Some of my views on this issue appeared in the Huffington Post on December 9, 2010,and I continue to be seriously concerned about the potential harm that could be done toAmerica by such legislative action. For 50 years I have been involved in business andresearch all over the developing world and know first-hand the evils of corruption and theadvantages to our investment and commercial interests in rigorously avoiding bribery.

The U.S. FCPA stood virtually alone on the global stage in the fight against corruption untilthe late 1990s, when the great majority of other nations began adopting similarprohibitions. Today, the FCPA is buttressed by the UN Convention Against Corruption, the

OECD Anti-Bribery Convention, regional conventions, and a strong focus on the issue bythe G20. With U.S. leadership, curtailing bribery has been a hugely successful effortacross nearly 35 years.

The United States Chamber of Commerce asserts in its paper Restoring Balance thatthe central aim of the FCPA is to prohibit the payment of bribes to foreign officials for thepurpose of obtaining or retaining business. This narrow understanding misses the largerpoint of the FCPA, which is to promote efficiently functioning global markets where bothAmerican and foreign companies can compete on the merits of their products and servicesin stable business environments guided by the rule of law.

The argument is made that subsidiaries of multinational companies should be given aloose rein on bribery. A parent companys control of the corporate actions of a foreignsubsidiary should not expose the company to liability . . . where it neither directed,authorized, nor even knew about improper payments. In a world where so much of globalbusiness is done by companies via hundreds, even thousands, of subsidiaries, gutting theFCPA in this way would subject the United States to ridicule.

8/4/2019 Raymond Baker Letter to Rep Jim Sensenbrenner

2/3

A Program of the Center for International Policy

1319 18th Street, NW, Suite 200 | Washington, DC | 20036

Tel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfip.org

The argument is also made that companies should not have successor liability in casesof mergers and acquisitions. The Chambers paper asserts that a corporation, irrespectiveof whether or not it conducts reasonable due diligence . . . should not be held criminallyliable for historical violations of FCPA prohibitions. Aggressive due diligence might be areasonable defense, but a free pass for acquired problems irrespective of due diligence

is far too lax a standard.

The paper goes on to complain that a company can face criminal penalties for a violationof the FCPA even if it (and its employees) did not know that its conduct was unlawful. Inother words, ignorance of the law would be an excuse when bribing a foreign official.

Corruption is an insidious force, undermining stability, security, and peace in manycountries around the world. American military commanders in Afghanistan and Iraq withwhom I have spoken cite corruption as one of the greatest problems confronting U.S.progress in these strife-torn countries. Is it now suggested that U.S. firms should be givengreater leeway to bribe in order to gain business in these countries? Who will inform our

service men and women risking their lives, their safety, of this double standard?

The Arab Spring is in good part a testimony to the power of anti-corruption forcessweeping the world. Citizens in Egypt, Tunisia, Libya, and other countries are pursuing theproceeds of corruption obtained by their former leaders and officials. The U.S. StateDepartment and the United States Agency for International Development support manyefforts to repatriate the proceeds of corruption, and our foreign policy would be harmed byan attempt to gut or weaken the FCPA.

I have seen corruption contribute to death and deprivation in many countries around theworld. When bribery puts money into private hands it strips resources from the state,

thereby limiting funds available for health and education. Who will persuade our friends inBrazil and Kenya and India and elsewhere that gutting or weakening the fight againstcorruption is in their best interest, or indeed in our best interest?

Legislation prohibiting bribery of government officials in this country is clear andunequivocal. Why should our laws be different when we do business in other countries?What kind of example does that set to nations we are seeking to draw closer into thedemocratic-capitalist system? The notion that our laws lead to a loss of business overseasmay on very rare occasions be correct, but that occasional loss is vastly offset by theadditional business we gain through upholding high investment and commercial standards.

I sincerely doubt that the major employers in your district and its greater environs, such asJohnson Controls, Allen Edmonds, Gehl, Quad-Graphics, Wal-Mart, Target, and others,wish to create jobs through contracts obtained by foreign bribery.

I sincerely doubt that your local media, including The Milwaukee Journal-Sentinel, WISN,WMTU, WITI, WLIP, WRJN, WHAD, and others, would lend their editorial support toefforts to gut or weaken the FCPA.

8/4/2019 Raymond Baker Letter to Rep Jim Sensenbrenner

3/3

A Program of the Center for International Policy

1319 18th Street, NW, Suite 200 | Washington, DC | 20036

Tel. +1 (202) 293-0740 | Fax. +1 (202) 293-1720 | www.gfip.org

I sincerely doubt that religious leaders in your district and its environs, includingArchbishop Jerome Listecki, Reverend Jeff Barrow, Reverend Mark Schroeder, ReverendDavid Rutschow, Reverend John Wille, and others, would support efforts to ease the fightagainst corruption.

I sincerely doubt that your major campaign contributors, such as Honeywell, Lockheed

Martin, General Electric, Microsoft, and others would take a public position or perhapseven a private position in favor of you leading an effort to gut or weaken one of Americasproudest and most laudable achievements of recent decades. I cannot imagine that yournext election campaign will be enhanced by advocacy of an issue so inimical to Americaninterest.

Having spoken with a great many people about this matter in recent months, I have nodoubt that an effort to gut or weaken the FCPA will be vigorously opposed by businessgroups in this country and abroad, by civil society organizations in this country and abroad,and by foreign governments in Latin America, Europe, Africa, the Middle East, and Asia.Our stance against bribery and corruption is a testament to our American values, an

example of our leadership on issues crucial to achieving peace and prosperity in our time.It is a stance that must be maintained.

Quite simply, an effort to gut or weaken the U.S. Foreign Corrupt Practices Act will notsucceed.

I and others will be pleased to discuss with you measures by which the U.S. Department ofJustice can clarify aspects of the Act as may benefit U.S. businesses seeking andobtaining legitimate business around the globe.

Permit me to give you a copy of my book, Capitalisms Achilles Heel: Dirty Money and How

to Renew the Free-Market System(John Wiley & Sons, 2005). Should you have anopportunity to read the sections on Pakistan, Indonesia, Congo, Russia, China, and othercountries, I believe you will appreciate the devastating impact corruption has on our worldand will share with me and others a determination to strengthen, not weaken, our nationsfight against this global scourge.

Yours sincerely,

Raymond W. BakerDirector