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FCPA Blog Daily News

Entries in sStephanie Connor (1)

Tuesday
Mar232010

Speaking Freely

The Miller Center of Public Affairs at the University of VirginiaThe Miller Center of Public Affairs [at the University of Virginia] has a long tradition of luring influential people to speak to engaged citizens, but this genteel practice degenerated on Friday, March 19, at an appearance by the lawyer who wrote the infamous “torture memos” that the Bush Administration used to justify waterboarding terrorist suspects. While irate audience members shouted at the interrupters, the Center’s programs director, George Gilliam, scolded disruptive protesters during the talk by University of California at Berkeley law professor John Yoo. -- Uncivil discourse: Protesters disrupt Yoo at Miller Center, The Hook

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Free speech is something most Americans say they believe in. But some don't act that way. Shouting down a speaker because his or her view is unpopular isn't free speech. It's using more volume to drown out less volume. If we're honest, many of us would say we believe in free speech for ourselves but not for our neighbors. That's why we all need the First Amendment.

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Andy Spalding's views of FCPA enforcement as a de facto economic sanction against developing countries aren't always popular. But they force us to look again at national and global anti-corruption policy. We think Stephanie Connor's response to Andy's most recent comments in this space sum up the counter-argument nicely. She says,

Dear Andy,

Don’t get me wrong, I think your analysis of the FCPA as a de facto sanction is downright brilliant. But we have to distinguish between increases in investment and decreases in poverty. As many commentators have noted over the last several decades, foreign direct investment does not impact poverty because of corruption. This is one of the most significant factors playing into the relationship between resource wealth and economic failure. Corruption prevents the proceeds of investment from spreading throughout an economy because it creates strong incentives for political actors to control the access to resources. 

Moreover, we cannot gloss over the practical realities that “black-knights” will face when they invest in corrupt economies, and what that means for long-term investment. For example, when the Angolan government rejected IMF funding in 2007, China stepped in as Angola’s benefactor. But the Chinese government soon grew exasperated with the rampant corruption, and demanded greater transparency.

You and I agree that we need robust international anti-corruption enforcement. But others are abusing a short-term analysis of the FCPA's impact on investment to reach the opposite conclusion. I’m referring to a recent suggestion that FCPA enforcement will undermine Haiti’s recovery. For the first time in its sad history, Haiti is getting some attention from the international community, an influx of donor money, and an opportunity to rebuild. This is not the time to advocate for bribery.

No amount of FCPA enforcement will completely stamp out corruption. There will always be local officials who demand bribes, and there will always be free-riding foreign companies who choose to ignore the law. The FCPA seeks to punish comparatively wealthy actors who benefit from and sustain a lack of transparency. We should give the law some time to work.

Sincerely,

Stephanie Connor