COUNTERPOINT: Time for Aggressive Enforcement is at Hand
Lawmakers, take corporate corruption seriously and enforce the laws we already have on our books.
By Cyril Tuohy, managing editor of Risk & Insurance®
Other than lawyers, perhaps, hardly anyone would argue in favor of more laws. But nearly everyone can agree that what we need is to enforce the laws that are already on the books, whether they be criminal or civil laws, or regulations adopted to implement the laws.
One of those laws is the Foreign Corrupt Practices Act of 1977. Another is the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The FCPA is short and straightforward, and its provisions apply to all companies reporting to the SEC.
Dodd Frank is more voluminous, and was passed in the wake of the Great Recession where we all nearly lost our shirts because of the recklessness of a few. The spirit of both laws to the make the goings-on in companies fair and transparent; that way we all benefit.
What we need is swift enforcement of these laws. If that means beefing up the enforcement divisions of the SEC or the Treasury Department, so be it. A single Pentagon weapons program could fund a platoon of white-collar enforcement officers for a lifetime. Understaffing on account of budgets isn't the real issue.
If companies don't agree with the fines and charges, there is an appeals process for that as well.
Companies need to take these laws seriously and comply with them, which they will necessarily do if our government enforces the laws. Strong compliance is a necessary component for all companies as well. A solid record reassures investors, management, employees and customers. Adhering to best compliance practices is its own risk-management reward.
If corporations want relief, they have the clout to push for change. They don't need to circumvent laws.
Critics of the lawmaking-process regularly refer to laws as "Swiss cheese," in reference to the number of loopholes in the law ripe for exploitation. U.S. companies have always been able to compete successfully in the domestic or global marketplace; our free -market system almost guarantees it. Things go awry when the rules don't apply equally to everyone in the ring, domestic or global.
That's why we need to enforce the laws already on the books, and why companies need a robust compliance strategy, even if we all have to pay a little bit more.
March 1, 2013
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