A U.S. law designed to keep American businesses from bribing foreign officials is causing more financial pain for foreign companies than it is domestic ones.
Of the 10 companies that have paid the most money in settlements with the U.S. government, only one is American — Halliburton subsidiary KBR, The New York Times reports.
The list also includes Daimler, Siemens, Alcatel-Lucent and Japanese consulting firm JGC.
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Foreign companies are under the gun because the definition of “American” in the Foreign Corrupt Practices Act has grown since the law was enacted in 1977 to encompass foreign companies that are listed on U.S. stock exchanges or do business here.
Many of the foreign companies end up in trouble because in their home countries bribery is accepted and/or they don’t realize that the U.S. law applies to them, according to The Times.
The Justice Department probably had an easy time going after the foreign companies, as much of the alleged bribery took place years ago, before the firms were fully aware of the law.
“Many of these are ‘cash cow’ cases for Justice,” Michael Koehler, an assistant professor of law at Southern Illinois University, tells The Times. “It’s a government program that is profitable to the U.S. Treasury.” The feds also feel a moral obligation to prosecute, he says.
U.S. companies aren’t too happy about the law either. “Business groups have long pressed for clarity on the law, which they argue is vague, over-broad and detrimental to U.S. businesses,” blogger C.M. Matthews writes in The Wall Street Journal.
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