US Congress to tackle anticorruption legislation, including bill to outlaw foreign bribe solicitation

A slate of US anticorruption legislation, including a bill that would outlaw the solicitation of bribes by foreign officials, awaits Congress as it returns from its summer recess. The bills enjoy a better political environment than similar measures in the past after the formation of a bipartisan anti-kleptocracy caucus and a renewed White House interest in fighting corruption.

Last week, a Democratic and a Republican House member rolled together distinct pieces of anticorruption legislation into the Counter-Kleptocracy Act. It has been assigned to the House Judiciary and Foreign Affairs committees.

All of the individual bills in the package have both Democratic and Republican co-sponsors. Four have been introduced in both the House and the Senate, and three have been introduced in the House. Some are already out of committee and on legislative calendars. The bills could pass as stand-alone measures or as part of the consolidation.

Foreign extortion

A bill of particular importance to US companies conducting international business is the Foreign Extortion Prevention Act — House legislation that would punish foreign officials who solicit bribes that affect US interstate commerce.

The bill, co-sponsored by Rep. Sheila Jackson Lee, a Texas Democrat, and Rep. John Curtis, a Utah Republican, would fulfill a long-standing goal of anticorruption officials and advocates to criminalize the demand side of bribery. It would impose a maximum prison sentence of 15 years.

At present, the Foreign Corrupt Practices Act only outlaws the offering or paying of a bribe. Its maximum prison term is five years.

Another bill would require the State Department to rank the countries of the world by their control of corruption and consider sanctioning the worst. Other bills would strengthen visa sanctions against corrupt politicians.

Anticorruption caucus

The surge of anticorruption legislation coincided with the formation of the bipartisan Caucus against Foreign Corruption and Kleptocracy this summer.

Jackson and Curtis, along with the House members who introduced the consolidated Counter-Kleptocracy Act — Steve Cohen, a Tennessee Democrat, and Joe Wilson, a South Carolina Republican — are among its members. Curtis is a caucus co-leader with fellow Republican Brian Fitzpatrick of Pennsylvania and Democrats Tom Malinowski of New Jersey and Bill Keating of Massachusetts.

The Caucus dubbed June "Anti-Corruption Month" and introduced an anti-graft bill each week of the month.

The coordinated fashion in which these bills were introduced contrasts sharply with the history and fate of past anticorruption legislation.

For instance, legislation that would mandate disclosure of beneficial ownership of companies — a measure aimed at closing down anonymous shell companies — was introduced time and again in the last decade by Democratic Representative Carolyn Maloney of New York. After a series of revisions and amendments addressing privacy and regulatory burden counterarguments, the legislation finally passed at the very end of the last Congress as a rider on a defense bill. The Treasury Department is now developing rules to implement the law.

Jackson in the last Congress introduced legislation outlawing the solicitation of bribes; it never had a committee hearing. Ed Perlmutter, a Colorado Democrat, previously introduced House bills that would have given businesses a private cause of action to file lawsuits against foreign officials seeking bribes. Those bills also went nowhere.

Senator Ben Cardin, a Democrat from Maryland, unsuccessfully introduced legislation that would require the State Department to assess the prevalence of corruption in the countries of the world and rank them accordingly.

This year, he has teamed with Senator Todd Young, an Indiana Republican, and reintroduced a revised version that was also joined into Cohen and Wilson's consolidated bill. It would require State to assign each country of the world to one of three tiers, depending on their control of corruption.

The new bill, Combating Global Corruption, sanctions politicians for substantial acts of corruption and human rights abuses. Malinowski and Representative Maria Elvira Salazar, a Florida Republican, have co-sponsored corresponding House legislation. Both bills are in the consolidated package.

Cardin's bill was reported out of the Senate Foreign Relations Committee on June 24, and the House version has been referred to the Foreign Affairs and Judiciary Committees of the chamber.

CROOK Act

Cardin and Republican Senator Roger Wicker of Mississippi additionally have introduced two anticorruption bills that weren't included in the consolidated Counter-Kleptocracy Act.

The first, the Countering Russian and Other Overseas Kleptocracy (CROOK) Act, would tack on an extra $5 million fine to any FCPA penalty exceeding $50 million and put the surcharge into an "Anti-Corruption Action Fund" that would finance anti-graft programs in foreign countries.

The CROOK Act has a companion House bill, sponsored by Keating and Fitzpatrick, that has been reported out of committee. The Senate version has not.

Cardin and Wicker have also co-sponsored a bill to make permanent the Global Magnitsky Act, which sanctions foreign officials and their associates who engage in human rights abuses or substantial acts of corruption. It was reported out of committee in June.

Biden priorities

The bills are moving through Congress against the backdrop of a White House that has spotlighted corruption in its high-level foreign policy agenda. Not only has the tone of the Oval Office changed from the days when it was occupied by Donald Trump, who once called the FCPA a "horrible law," but President Joe Biden three times early in his term directed his administration to do more to fight corruption.

Provisions in the bills, such as extra visa restrictions in response to corruption and foreign assistance funding for anti-corruption programs, would codify recommendations and directives from the White House.

Biden has scheduled a Summit for Democracy for Dec. 9 and 10 and named the fight against corruption one of the its three pillars. The other two are defending against authoritarianism and promoting human rights.

And in June, Biden issued a national security memorandum calling for a 200-day review of executive branch authorities and actions against corruption, and recommendations for developing a national anticorruption strategy.

Further, at the end of July, the White House issued a strategy for stemming migration from Central America, and listed corruption as a major root cause. The administration said it would strengthen prosecution against corruption in the region, particularly when it effects US trade, and would sanction corrupt leaders.