U.S. Businessmen Challenge the U.S. Anti-bribery Statute
 
November 19, 2001
 

Two Texas businessmen, charged with authorizing a $75,000 bribe to an Indonesian official to reduce a $3.2 million tax bill, are challenging the U.S. government’s enforcement of the Foreign Corrupt Practices Act (FCPA). Congress passed the FCPA in 1977 to stop the widespread bribery of foreign officials by U.S. corporations. At the core of its anti-bribery provisions, the FCPA prohibits U.S. companies from gaining a business advantage by paying bribes to foreign officials. The U.S. Securities and Exchange Commission (SEC), the agency responsible for enforcing the FCPA, considers that a payment to avoid an exorbitant bill falls within the FCPA, even though, the plaintiffs argue, in this case there was no business to attain or to retain. The SEC has brought previous enforcement actions against companies whose actions were not immediately related to a business deal. However, as most cases are settled, this is the first time the SEC will have to defend its interpretation of the statute in court. A victory for the plaintiffs could force the SEC to narrow its interpretation of what constitutes a bribe under the FCPA.