Foreign-Funded U.S. Chamber Of Commerce Advocates For Weakening Law Against Bribing Foreign Governments

As ThinkProgress has documented, the “U.S.” Chamber Of Commerce has for years received at least hundreds of thousands of dollars from foreign-owned corporations. While the Chamber claims that the foreign funds it receives do not fund its $75 million in partisan attack ads, it would be highly unusual for these foreign corporations to be donating to the organization without expecting some sort of political activity on their behalf. Now, a new Chamber paper advocating for a change in a U.S. law intended to crack down on American-based multinational corporations bribing foreign governments may provide an answer as to why these foreign firms are doling out cash to the right-wing lobbying group.

Yesterday, the Chamber kicked off its U.S. Chamber Institute For Legal Reform Legal Reform Summit 2010, where it is advocating for its pro-corporate “legal reform” agenda. As a part of the agenda, the Chamber is presenting a paper at its summit titled “Restoring Balance: Proposed Amendments to the Foreign Corrupt Practices Act.”

Since 1977, when it was first enacted, the Foreign Corrupt Practices Act (FCPA) has been the government’s main enforcement mechanism to stop American-based multinational firms from bribing foreign governments in order to win special business advantages. The anti-corruption law has been especially strong during the Obama Administration, during which FCPA-related fines collected by the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) dramatically increased — in just the first two months of 2010, they totaled $1.2 billion, far more than the measly $87 million collected in all of 2007 by the Bush Administration.

Therefore, it makes sense that, now, with the “likelihood of a Republican wave in midterm elections” being increasingly high, the Chamber would release a paper proposing amendments to the law that would serve to gut many of its core provisions:


Limiting a company’s successor criminal FCPA liability for prior acts of a company it has acquired: The Chamber’s paper advocates for restricting the amount of liability a company can take on from a firm it merges with that is guilty of FCPA violations. This would allow companies to engage in corrupt practices and then merge with other businesses and reduce the penalties they face. (page 14)

Limiting a parent company’s civil liability for the acts of a subsidiary: This amendment would restrict the ability of the SEC and DOJ to hold American companies accountable for the actions of their foreign subsidiaries as long as the American parent firms could reasonably prove that they were not aware of the actions of their foreign subsidiaries. The problem with changing the law in this way is that it could greenlight corruption abuses by foreign subsidiaries that the parent company would profit from but not be held accountable for. (page 22)

Clarifying definition of “foreign official”: The Chamber complains about a 2009 case by the Obama DOJ and SEC where they fined Control Components, Inc. for bribing state-owned companies in China, Malaysia, South Korea, and the UAE. The government defined bribing state-owned companies as the same as bribing foreign governments. The Chamber seeks to limit this definition, which it believes is too broad. Overly restricting the government’s ability to hold firms accountable for bribing state-owned companies just as if they were bribing foreign governments would potentially open up new channels of corruption. One of the Chamber’s cited cases of supposed abuse of this government authority is for fining defense contractor KBR for bribing a company that is 49 percent owned by the Nigerian government. Presumably, 49 percent is not a high enough threshold for the business lobby to consider it corrupt influencing of a foreign government. (pages 24–26)

In trying to weaken the FCPA so as to allow corporations greater leeway in engaging in corrupt practices, the Chamber is not simply acting out of ideological solidarity with the big business interests it champions. Numerous members of — and donors to — the Chamber have engaged in FCPA violations or are currently under investigation. Here is a short but far from comprehensive list:

Dow Chemical: Dow, which donated $1.9 million to the Chamber last year, paid a $325,000 settlement with the SEC in 2007 for FCPA violations.

Shell: Petroleum giant Shell is a dues-paying member of the Chamber that refused to quit the organization despite its climate change denialism last year. The company is currently nearing a settlement with the DOJ and SEC over an FCPA violation related to bribing Nigerian officials. Analysts expect it to pay at least $30 million.

General Electric: Chamber member General Electric (GE), while denouncing its climate change denialism, also refused to quit the organization over it. GE settled with the SEC with a $23 million settlement earlier this year for FCPA violations related to the Iraqi oil-for-food scandal.

Halliburton: Halliburton, a proud member of the U.S. Chamber of Commerce, had a record-breaking settlement with the SEC in 2009, paying $800 million for an FCPA violation related to bribery in Nigeria.

While the Chamber of Commerce continues to use the slogan “Fighting For Your Business,” it is increasingly apparent that the people it fights for above all else are its funders — multinational corporations whose loyalty is not to American consumers or transparency and good governance, but rather to their own bottom lines.