Hiking the Cost of Bribery
The Justice Department crackdown on corrupt practices overseas ensnares both U.S. and foreign companies
But not everyone is so sanguine. Some companies fear that the rising penalties in such cases—including a record $44 million fine in one involving energy firm Baker Hughes Inc.—make self-disclosure less desirable, especially if the violation would be difficult for investigators to discover otherwise. What's more, worldwide enforcement is spotty; although members of the Organization for Economic Cooperation and Development, which includes most major industrialized countries, began enacting antibribery measures in 1998, few countries have launched many prosecutions. "There needs to be much stronger enforcement," says former State Department official Alan Larson, chairman of the board of Transparency International USA, a group that tracks bribery worldwide. Targeting foreign companies and individuals like Sapsizian may be one way to push other countries, especially as globalization extends the reach of U.S. law.
Not everyone buys the deterrent theory, whether stateside or global. "When you do something with one company, it doesn't stop the practice; it just requires other companies to be more careful," says Roy Kahn, the lawyer for Sapsizian (who pleaded guilty). But prosecutors disagree, and they believe the newfound help from the business community is making a difference. "One voluntary disclosure by one company could lead to several investigations of companies in the same industry in the same area," says William Jacobson, assistant chief of the Justice Department's fraud section. "Things sort of increase exponentially." At least, that's what the feds are banking on.
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