Foreign bribery in Congress: 'The way business is done'?

Blog: Responsible Statecraft

Abstract

Earlier this month, Democratic Texas congressman Henry Cuellar was indicted by the U.S. Department of Justice on charges of "bribery, unlawful foreign influence, and money laundering." The accusations revolve around a set of deals in which Cuellar allegedly accepted money from a state-owned Azerbaijani oil company and a Mexican bank in exchange for an agreement to push U.S. foreign policy in their favor.As concerning as this may be, it's not even the first such indictment against a sitting member of Congress this year. In March, Sen. Bob Menendez (D-N.J.) received a superseding indictment which expands further upon earlier accusations that the former Senate Foreign Relations Committee chairman took bribes to advocate on behalf of the Egyptian and Qatari governments. These cases make it clear that foreign bribery, in which representatives of one country pay money to manipulate the representatives of another, is still a serious problem in the United States. As the world's most powerful and interventionist nation, no other government has more influence over the rest of the world's affairs — influence which can be bought. The recent charges against Rep. Cuellar and Sen. Mendendez show how significant of a problem bribery and undue influence has been for the U.S. congress, while also drawing attention to the ongoing efforts to prevent this corruption from continuing.Bribes offered in exchange for political favors are nothing new in Congress. The first congressional bribery investigation on record took place in 1854, when a lobbyist attempted to bribe members of Congress into extending the patent for the Colt revolver handgun. The question of bribery across borders, however, did not receive much attention in Congress until fairly recently. Concerns about foreign bribery emerged most forcefully in the mid-1970s as a result of the Watergate investigation and the Church Committee, which investigated abuses by U.S. intelligence agencies. These investigations identified slush funds run by large companies that could be used for illegal political donations and undisclosed foreign payments, including several U.S.-based corporations with overseas operations. In the words of then-committee chairman Sen. Frank Church (D-Ida.), the Church Committee was "concerned with the foreign policy consequences of these payments by U.S.-based multinational corporations… It is no longer sufficient to simply sigh and say that is the way business is done. It is time to treat the issue for what it is: a serious foreign policy problem."There are two types of foreign bribery: attempts by foreign figures to bribe U.S. officials, and attempts by U.S. figures to bribe foreign officials. The Church Committee began by looking into the latter, focusing on political contributions that U.S.-based oil and defense companies had made abroad. What they found was shocking: oil companies were funding politicians in South Korea and Italy; Northrop was paying off a Saudi general; and Lockheed spent millions on bribes to foreign officials in Japan, the Netherlands, Indonesia, and more. Lockheed even sought to claim tax deductions for its bribes, a practice which was legal until 1975.These and other revelations caused major scandals abroad. Congress was rattled by the way that some countries reacted to the corruption, including the Peruvian government's expropriation of assets belonging to a corrupt U.S. oil company. Combined with the American public's disgust towards the corruption of the Watergate scandal, conditions were ripe for serious reform. In 1977, the Foreign Corrupt Practices Act (FCPA) was signed into law, making it illegal for U.S. citizens to bribe foreign officials. Until this rule was turned into a treaty 20 years later, the U.S. was alone in the world in adopting this form of anti-corruption policy.For much of the U.S.'s history, political corruption was both common and partially normalized, explained away as a necessity to achieve political and business goals. When a corrupt middleman helping U.S. weapons companies make deals in Saudi Arabia explained his role to Pentagon officials in 1973, one official present described the activities as "an inexpensive economic aid program." It was the fallout from Watergate and the Church Committee that turned bribery into a proper taboo. This sharp cultural change caught some off guard: one key Lockheed executive who was ejected from the company due to the bribery scandal complained that "all of a sudden, there's a different set of standards… I looked at these payments as necessary to sell a product. I never felt I was doing anything wrong." The public's attention next turned to the flip side of foreign bribery: foreign representatives paying off U.S. officials. While the FCPA criminalized foreign bribery committed by U.S. citizens, it did not fully criminalize foreign bribery aimed at U.S. citizens. New investigations into bribes directed at members of the U.S. congress helped to demonstrate the scale of this issue.In the "Koreagate" scandal of the late 1970s, a well-connected South Korean businessman offered bribes to U.S. members of Congress in exchange for favorable treatment of the nation's dictatorship. Many lawmakers were implicated, and one was sent to jail. Congress launched investigations into alleged bribery campaigns by Iranian and South African officials in 1979 and 1980, respectively, but ultimately found "no evidence of intentional misconduct." Little did they know that something much larger was brewing beneath the surface.In 1980, NBC News revealed that the Federal Bureau of Investigation had conducted a large-scale sting operation against corrupt politicians. "Abscam," short for "Arab scam," involved FBI agents posing as the agents of a wealthy Middle Eastern sheikh and offering bribes to seven members of Congress, all of whom were eventually convicted. This investigation, controversial for the use of tactics which many might consider entrapment, formed the basis of the 2013 comedy film "American Hustle."Abscam was the last major entry in this burst of investigations, but new scandals continued to emerge over the years. After congressman Jay Kim (R-Cal.) narrowly won his 1992 reelection campaign, it was revealed that more than a third of his campaign contributions were illegal, including money with its origins in South Korea and Taiwan. Five years later, Rep. Corrine Brown (D-Fla.) pressured Turkemenistan's ambassador to the U.S. on behalf of a Florida-based company seeking a natural gas deal with the country; the same company had previously paid for her trips overseas. She also was accused of accepting a car from a Malian businessman as a gift for her daughter.The next large scandal came in the form of congressman William J. Jefferson (D-La.), who was convicted of a litany of crimes in 2009. Jefferson accepted large bribes from U.S. companies in exchange for promoting their business interests across western Africa. He was finally caught after accepting a $100,000 cash bribe from a woman who instructed him to pass it on to the vice president of Nigeria. What he didn't know was that the woman was an FBI asset wearing a wire; the Bureau raided his Capitol Hill apartment days later.These issues have continued into the 2020s, even before the bombshell indictments of Rep. Cuellar and Sen. Menendez. In 2022, congressman Jeff Fortenberry (R-Neb.) was convicted of lying to the FBI about illegal campaign money which originated from a Nigerian billionaire. His conviction was later reversed on technical grounds, but new charges were filed against him earlier this month.Recent efforts have helped to strengthen U.S. laws against foreign bribery. President Biden signed the Foreign Extortion Prevention Act into law late last year, making it illegal for foreign officials to demand or accept bribes from U.S. citizens. This reform directly addresses the "demand side" of the bribery issue which the FCPA left untouched. In addition, the Securities and Exchange Commission has stepped up its enforcement of the FCPA ever since creating a "specialized unit" to enforce the law in 2010. However, there is more that can be done to strengthen the law. For example, Congress could repeal the 1988 amendment to the law which creates an exception for "facilitating or expediting payments."Other reforms can help in fighting corruption. Congressional ethics committees need to be strengthened in order to identify and address ethics violations more quickly. Stronger enforcement of the Foreign Agents Registration Act could make it harder for middlemen acting as agents of foreign governments to hide in the shadows.Members of Congress must also have a zero tolerance policy for their colleagues who are caught engaging in foreign bribery. Senator Menendez has already faced calls for resignation from the majority of senators from his own party; although he gave up his leadership role on the Senate Foreign Relations Committee, he continues to cling to office. Rep. Cuellar, on the other hand, has faced little opposition from his Democratic colleagues so far.Finally, these scandals should lead Washington to reconsider U.S. foreign policy more generally. The United States frequently intervenes in the affairs of other nations, even in contexts where it makes little sense. Members of Congress can use this global reach to line their own pockets; simultaneously, this same power makes them prime targets for foreign interests who wish to manipulate the way that the United States interacts with the rest of the world. A foreign policy that turns away from coercive interventionism while still encouraging international cooperation would provide fewer opportunities for foreign bribery to occur in the first place.U.S. foreign policy should be dictated by the interests of the American people, not the personal financial interests of politicians, wealthy businessmen, and foreign governments. The cases of Rep. Cuellar and Sen. Menendez are only the most recent in a substantial history of such behavior. To fix U.S. foreign policy, we need to clean up Congress and put an end to foreign bribery.