A country once renowned for glorifying corruption now leads what may be the furthest-reaching anti-corruption investigation in history. Brazil, once typified by its "Brazilian jeitinho" way of creatively navigating social problems,' now executes "Operation Car Wash," bringing down political and business leaders by the dozens. So too has Brazil's Congress adopted a series of dramatic, and effective, new anti-corruption laws, in response to public outcries for reform. It is deeply ironic, but not at all coincidental, that Brazil concurrently hosted the Summer Olympics. This paper chronicles the extraordinary series of events that connect - in a line that is straight but certainly not obvious - Brazil's modern anti-corruption movement with its hosting of the 2016 Summer Games.
Brazil's modern democracy is but three decades old. With the Brazilian people now taking to the streets in protest at public corruption, the government is enacting new laws and learning to effectively enforce them. The nation is thus feeling the growing pains of an emergent commitment to transparency. In this, the window between Brazil's hosting of the 2014 FIFA World Cup and the 2016 Summer Olympics, it is timely to ask what the spotlight of these two events has revealed about the nation's anti-corruption measures. How is the government responding to exposed corruption risk? Will the Olympics ultimately make good on their promise to be an agent of positive change? This brief article discusses issues related to Brazil's federal anti-corruption laws generally, its changing procurement laws and the Olympic contracts and governance organisations.
Professor Peter Reilly addresses concerns that practitioners in this space have privately and publicly debated for years. What exactly is cooperation credit? Can we quantify it? The government promises that self-reporting is in our self-interest, but the government's interest in saying so is obvious enough. What evidence can the government provide? The difficulty of measuring this credit is somewhat ironic, given the government's dependence on cooperation. As this essay will show, our modern enforcement regime, which has four components—the internal or independent investigation, voluntary disclosure, cooperation credit, and a negotiated settlement—is the government's method of maximizing general deterrence with finite resources. Ensuring that defendant companies see sufficient incentive to self-report is therefore critical to advancing the policy goals that inhere in anti-bribery enforcement. Hence the value of Professor Reilly's critique. He argues that the government "must provide greater transparency regarding specific and calculable benefits that can be achieved through self-reporting and cooperation" in FCPA settlements. And indeed, it may be powerful evidence of his argument's force that very recently, the government has taken measures to do that very thing. Put another way, Professor Reilly's is an idea whose time has come. This Essay provides both background and foreground to Professor Reilly's article. It first explains the role of self-reporting and cooperation in anti-bribery enforcement, suggesting that the government is essentially seeking to adjust both the numerator and denominator of a ratio that might be called Deterrence Per Dollar. This Essay will then describe and endorse Professor Reilly's critique of FCPA enforcement, and show how the government seems to have recently responded to that critique with a flurry of important reforms. Finally, I briefly discuss the prospects of adopting additional reforms, and conclude by sounding a hopeful note that these would likewise command Professor Reilly's support.
International law does not currently regard an act of official corruption as the violation of a human right. But as recent steps by Chinese leaders, political shifts in India, the EuroMaidan in Ukraine, and the Arab Spring all reflect, an international consensus is emerging that corruption is a pervasive and pernicious social problem, structural obstacle to economic growth and threat to global security.
This Comment is the first in a series of publications on Brazil's efforts and, we hope, its successes in reducing corruption in the 2016 Olympic Games. It is written as part of a course at the University of Richmond School of Law entitled "Brazil, Corruption, and the 2016 Summer Olympics"-the co-authors are eight students and their pro- fessor. While the ultimate product will be a comprehensive analysis of the role of Brazilian law in controlling corruption, this Comment has a more modest purpose. It will discuss the various trends and forces that have converged on Brazil's hosting of the Games, discuss the various allegations of corruption that are made in relation to the Olympics, and generate a series of research questions to pursue in the coming months. Accordingly, Part I describes the rising anti-corruption dialogue in Brazil specifically and in sports generally. Part II looks at corruption allegations surrounding the FIFA World Cup, both broadly and in Brazil specifically. Part III then introduces the broader history of corruption surrounding the Olympics and the recent Sochi Winter Games. The Comment concludes with a series of questions to which the international community still needs answers.
This Article is the third installment in a long-term research project that examines the effects of the U.S. Foreign Corrupt Practices Act in relation to its underlying policy goals. It first reiterates the various data points showing that enforcement now has the unintended effect of reducing investment in higher-corruption markets. Because this amounts to the withdrawal of capital from developing countries in protest of their political conditions, I call this the "sanctioning effect." The paper then seeks to push the envelope of current anti-bribery debates by exploring connections to four fields of academic inquiry not typically associated with the FCPA. First, this Article argues that the FCPA deserves a prominent place in the broader securities law discussion of the "bonding thesis," which examines why foreign companies enter U.S. capital markets despite higher costs and liability. The Article explains that because entering the U.S. capital markets triggers jurisdiction over foreign companies, securities laws that are designed to induce such listings can help remedy the sanctioning effect. Second, the Article explores the principle, recently adopted by the Obama Administration, that corruption is properly understood as a human rights issue. It argues that truly embracing this principle as the cornerstone of our anti-corruption agenda would transform FCPA enforcement. Third, the paper shows that the theories of criminal punishment that explain the current enforcement regime are general deterrence and incapacitation, and that these compound the sanctioning effect. It then draws on the contemporary restorative justice debate to begin sketching the contours of an alternative paradigm. Finally, the Article describes several examples of foreign policy concerns dramatically altering FCPA enforcement outcomes and suggests that a more coherent and transparent treatment of the FCPA's foreign policy implications may require establishing a new federal office. The paper provides a preliminary mapping of these uncharted corners in anticipation of future academic (ad)ventures.
As the financial crisis draws U.S. business overseas and developing countries rise in influence, the regulation of international business has never figured so prominendy in federal law. But the dominant paradigm through which academics and policymakers continue to view that law-the so-called Washington Consensus-proves deeply misleading. A more accurate account of the components, origins, and aims of U.S. international business law reveals two striking ironies. First, in discrete but critical ways, the United States no longer represents the comparatively laissez-faire approach to federal business regulation. Rather, owing to its origins in the Progressive Era, U.S. federal law directs corporations toward noneconomic social goals, particularly combating corruption (for example, the Foreign Corrupt Practices Act) and promoting human rights (for example, the Alien Tort Statute or economic sanctions). By contrast, the alternative legal regime to which the United States is frequendy comparedChina- largely allows companies to pursue profits internationally without regard to their impact on corruption and human rights. Though it remains true that the U.S. regime and its principal alternative are distinguished by the extent to which the state restricts business conduct to achieve social goals, the roles are now reversed. Second, the rise of an alternative model now substantially thwarts the goals of U.S. progressive regulation. Empirical research in political science and economics demonstrates that because the U.S. regime increases the costs of doing business in emerging markets, U.S. companies tend to invest less. The resulting void in capital is filled by companies from China and other countries that similarly lack prohibitions on bribery and human rights violations. Ironically, enforcement ofU.S. progressivism creates the very conditions in which corruption and human rights violations occur.
Although the purpose of international anti-bribery legislation, particularly the U.S. Foreign Corrupt Practices Act (FCPA), is to deter bribery, empirical evidence demonstrates a problematic collateral effect. In countries where bribery is perceived to be relatively common, the present enforcement regime goes beyond the deterrence of bribery, and ultimately deters investment. Drawing on literature from political science and economics, this Article argues that anti-bribery legislation, as presently enforced, functions as de facto economic sanctions. A detailed analysis of the history of FCP A enforcement shows that these sanctions most often occur in emerging markets, where historic opportunities for economic and social development otherwise exist and where public policy should encourage investment. This effect is contrary to the FCPA's purpose which, as the legislative history shows, is to build economic and political alliances by promoting ethical overseas investment. These perverse and unanticipated consequences create two policy problems. First, the sanctions literature suggests that capital-rich countries that are not committed to effectively enforcing anti-bribery measures may fill the resulting foreign direct investment void. This dynamic creates myriad ethical, economic, and foreign policy problems, as observed, for example, in China's aggressive investment in Africa, Latin America, and Central Asia. Second, by enforcing these laws without regard to their sanctioning effects, developed nations are unwittingly sacrificing poverty reduction opportunities to combat bribery. This Article concludes with various proposed reforms to the text and enforcement of international anti-bribery legislation that would further the goal of deterring bribery without deterring investment.
