Tagged: SEC

NGO on FCPA reform: fines should compensate victims.

The SERAP (Socio-Economic Rights and Accountability Project) has added its voice to the calls for FCPA reform.

In a press release, the Nigerian NGO proposes that the US DOJ and SEC allocate a percentage of funds from fines exacted on corporations to aide the actual victims of corrupt government officials and agencies.

SERAP argues that since the FCPA and other anti-corruption laws do not provide for civil actions (apart from under the the Alien Torts Act) and moreover since there is little possibility of recovering damages in the country where the corruption occurred, the US government should share civil penalty and disgorgement proceeds with the victims.

Last week the DOJ replied to the US Chamber of Commerce’s reasonable pleas to “restore balance” and provide clarity on the law (their letter is here) by agreeing to discussions. The DOJ owes a similar response to SERAP. While the NGO lacks the backing of the hundreds of large corporations represented by the USCC, its argument is one that needs to be taken seriously.

SERAP provides some guidance on how civil penalty and disgorgement proceeds should be distributed in a systematic and fair manner to NGOs and the US Congress should invite them to testify in hearings on FCPA reform. That’s probably unlikely though since we probably won’t see any substantial progress on the issue until after the US presidential elections this November.

Updated: The FCPA Professor blog examines this issue in further depth.

 Photo: Rory Mullholland