The “Reverse Marshall Plan” calls for liberal democracies to take the lead in rolling out an effective anti-corruption regime in light of the United States’ decreasing enforcement of anti-corruption laws.
In the article, “A Reverse Marshall Plan for Anti-Corruption: Liberal Democracies Can Fill the Void Left by the Changes in U.S. Policies,” Stephen Kohn, a leading anti-corruption lawyer, argues that the international community is well-equipped to take on Foreign Corrupt Practice Act (FCPA) prosecutions.
The data shows that 62 countries have cooperated with U.S. FCPA investigations and over 71% of sanctions obtained from FCPA cases over the past 10 years have come internationally.
Furthermore, 46 countries have approved the Organized for Economic Co-operation and Development’s (OECD) Anti-Bribery Convention and have adopted their own version of the FCPA. These countries can revamp these laws to match the effectiveness of the U.S. FCPA.
With President Trump’s Executive Order that paused U.S. FCPA enforcement, and the US taking an overall step back on foreign prosecutions, it’s more important than ever for democracies all over the world to take the lead on anti-corruption enforcement.
The Six Steps to Global Anti-Corruption Enforcement
The “Reverse Marshall Plan” outlines six steps that democracies should follow to fill the void left by the U.S. and to maintain the global anti-corruption regime.
Step 1: Build Off the Progress Made by the OECD
The OECD has already laid the foundation for an effective transnational anti-bribery regime by creating the legal instruments that established a consensus around the best practices to combat international bribery in business transactions. Countries should build off of this foundation and focus on the potential to have larger jurisdictional reach and impact than the current U.S.-based FCPA.
Step 2: Recognize that the Current U.S. FCPA Program is Already Transnational
Nations must recognize that the majority of FCPA cases are initiated by non-U.S. whistleblowers prosecuting foreign entities. In other words, the hub of anti-corruption enforcement is already outside the United States, making the adoption of enforcement by these nations a natural step.
Step 3: Take Advantage of the Foreign Law Enforcement Agencies that are Already Participating in Successful FCPA Prosecutions
Foreign authorities are already actively assisting in FCPA prosecutions, such examples include the United Kingdom’s Serious Fraud Office, Norwegian National Authority, and Swiss Office of the Attorney General. Countries should take the further leap to strengthen their FCPA and increase their attention on enforcing existing laws.
Step 4: Adopt Laws Consistent with the OECD’s Findings on the U.S. FCPA
The OECD has praised U.S. anti-corruption law for its robust detection, reporting, and investigation mechanisms. The U.S. program takes a holistic approach which allows it to prosecute bribery cases “comprehensively with effective, proportionate, and dissuasive sanctions, while also providing legal certainty to the companies involved.”
Step 5: Implement Anti-Corruption Programs that can be Profitable and Generate Funds to Compensate Victims, Offset the Costs of Prosecution, Fund Pro-Democracy NGOs, and Return Billions to Taxpayers
The U.S. FCPA’s success can notably be attributed to its sanction system as it allows for the compensation of victims and reinvestment into NGOs committed to advancing democracy. This reward system should be adopted by nations worldwide to promote greater detections of fraud.
Step 6: Recognize that Whistleblower Incentives are the Most Successful Detection Method for Foreign Bribery and other Corruption-Related Crimes and Must be Incorporated into Modernized FCPAs
The U.S. FCPA follows a two-part economic model that was advocated by the Nobel Prize winning economist Gary Becker. First, it uses the whistleblower incentives found in the Dodd-Frank Act to increase the detection of hidden and hard to prove crimes. Awards make it economically rational for an individual to take the risk of reporting crime. Second, the penalties on the corrupt actors are sufficiently high to make those who consider paying bribes fearful.
A report by the Royal United Services Institute that examines the effectiveness of the U.S. whistleblower awards program stated that “whistleblower intelligence can give law enforcement ‘the inside track,’ facilitating real-time investigations and enabling the targeted deployment of covert techniques.”
Incentivizing and protecting whistleblowers should be recognized by countries as crucial to detecting foreign corruption.
