Wednesday, December 17, 2008

Corruption: Shouldn’t We All Just Say No?

As I stumbled through the internet doing some follow-up research on the Foreign Corrupt Practices Act (FCPA) (following up on my post from a couple of weeks ago), as I was surprised to find that I'm not the first one to look to Chevron while investigating the FCPA: Charles James, the general counsel and head lawyer for Chevron recently spoke at U.C. Berkeley's law school, Boalt Hall, at a conference on global corruption.

While there wasn't a full transcript on the event, it seems from the summary of remarks that James identified himself as "not a big fan of the Foreign Corrupt Practices Act" and heavily criticized the enforcement of the law, seemingly arguing that when the law is enforced, companies like Chevron are at put at a competitive disadvantage.

James' remarks offered a very different perspective than the other panelists. Judith Miller, general counsel of engineering giant Bechtel corporation, argued that the short-term pain of losing business to companies that do pay bribes is well worth the payoff of curbing corruption, since bribes hurt the countries that receive them AND the companies that pay them (since the bribes retard development of the countries, encourage further corruption, and force the companies to incur additional operating costs to secure contracts). However, James doesn't seem to see it this way, only seeing the FCPA as putting Chevron at a competitive disadvantage because they can't legally pay foreign officials for preferential treatment.

You would think a company running a massive p.r. campaign to show their good corporate governance – the "human energy" initiative – would embrace the FCPA. But under Charles James, I guess not.