A Positive-Sum Game: Why A Qui Tam Provision in the FCPA Would Benefit Both Whistleblowers and Covered Entities

By David Levintow

ABSTRACT

In ancient Persia, a judge who accepted a bribe was flayed alive and his successor was required to sit on a chair made from the predecessor’s skin, lest he forget the penalty for perverting justice when handing down judgments.1 Though we penalize corruption in less grisly fashion today, the seriousness with which it is dealt remains. Bribery of foreign government officials distorts the marketplace, destabilizes governments, and erodes public trust. The Foreign Corrupt Practices Act is the United States’ principal statutory scheme to detect, punish and deter these acts. Its passage and enforcement have sparked a nearly global effort to root out bribery of foreign officials. Notwithstanding the progress that has been made, the FCPA can and should be improved. An amendment to the FCPA to include a qui tam provision, which allows whistleblowers to bring private suits against companies engaged in misconduct, would address two shortcomings in the law. First, whistleblowers could take advantage of an improved mechanism by which to hold wrongdoers accountable, with all the incentives of the SEC’s existing whistleblower program, but a greater likelihood of success. Second, the long-term interests of covered entities would be served by the development of new case law to guide their conduct, decision-making, and potential disclosures. Because domestic bribery statutes have been interpreted by U.S. courts more narrowly than the DOJ and SEC interpret the FCPA, covered entities would also benefit if courts imposed reasonable limits on prosecutorial discretion.