Under the Biden administration, various corruption-related challenges are emerging and demanding novel solutions. A dominant piece of legislation regarding anti-corruption policy is the Foreign Corrupt Practices Act (FCPA). This act prevents individuals from engaging in bribery to influence foreign officials or foreign organizations. Additionally, it prevents foreign officials from making corrupt payments in the United States. A variety of current challenges, however, transgress the scope of the FCPA and require increasingly flexible and powerful policy responses to battle corruption. These challenges have arisen due to both reductions in anti-corruption regulations during the Trump administration and failures to address existing inadequacies in the policy.
In the context of the COVID-19 pandemic, the widespread distribution of vaccines creates ample opportunities for corruption, particularly in supply-side chains. For instance, distribution systems may lack complete security; theft and unofficial breaches in funding are issues that may arise. The potential for resale of vaccines in black markets is large particularly because the pandemic creates conditions where the demand for vaccines greatly exceeds the supply. With limited resources, individuals are likely to keep vaccines for their personal use and contribute to illicit distribution networks for profit. Such issues significantly threaten public welfare because they compromise the quality and efficacy of healthcare systems. In terms of vaccine procurement, risks related to market collusion exist; some suppliers may monopolize the vaccine market and eliminate smaller distributors. Market monopolies present a legal challenge because they allow the quick distribution of vaccines to dominate a need for oversight. In a collusive market environment, a few suppliers dominate vaccine dissemination, and enforcing a common set of standards becomes a challenge.
In addition to risks related to vaccine distribution, whistleblower protection is another current legislative challenge tied to corruption. Whistleblowers are essential in helping to expose corrupt practices and breaches of conduct, especially as they constitute the largest group of individuals who reveal wrongdoing in public institutions. Recently, however, many whistleblowers face threats on both domestic and international fronts. These individuals face a variety of grave risks; they risk losing their reputations, close relationships, financial assets, and jobs. Currently, eighty-four percent of OECD countries have whistleblower protection laws in place. Still, there are issues in the efficacy of such laws; according to evaluations conducted by the OECD Working Group on Bribery in International Business Transactions, a minimum of twenty-seven Parties to the Convention fail to effectively protect the welfare of whistleblowers in the private sector. Anonymous reporting is essential to giving whistleblowers a sense of security in speaking out. According to an OECD survey, forty-seven percent of respondent countries have companies that do not allow anonymity in reporting corruption. To strengthen whistleblower protections, a key step is to rebuild public and private reporting mechanisms in both domestic and international spaces. Mechanisms must include secure, confidential hierarchies for reporting and give whistleblowers a sense of safety in making their statements.
Handling recidivist banks and financial institutions present an additional challenge for anti-corruption policymakers. Started during the Trump administration, there has been a recent moratorium on the use of corporate monitors; however, these monitors are an essential force in battling corruption. When a financial institution is identified as a recidivist or corrupt, it can enter a Deferred Prosecution Agreement (DPA) with government regulators to avoid potential prosecution. A corporate monitor, which is a non-governmental organization, functions by overseeing the financial institution’s cooperation with their DPA. Corporate monitors, via the enforcement of a DPA, provide corrupt institutions opportunities to remedy their behavior and avoid major penalties. The moratorium on the use of corporate monitors facilitates corruption because it removes a layer of oversight from the enforcement of anti-corruption policy; financial institutions thus have less of an incentive to avoid corrupt practices. During the Biden administration, an appropriate policy action would be to increase oversight in financial institutions by lifting the moratorium on corporate monitors.
Anti-corruption policy regarding human rights violations also needs to be reexamined. A recent trend in corporate oversight has been an increasing emphasis on human rights. Under the Biden administration, it is crucial for this framework to remain and for the trend to continue. The UN’s Guiding Principles on Business and Human Rights (UNGP) suggest procedures and legal consequences related to both human rights violations and their handling. A key function of this framework is requiring domestic business enterprises to protect human rights that may transgress national boundaries but still fall into their operational networks. In particular, the UNGP includes multiple provisions that facilitate anti-corruption enforcement across borders. Corporations engaging in international activity are required to maintain transparency regarding all their global operations. Also, a set of common standards has been developed to regulate overseas investments to prevent discrepancies in such treaties between various countries. As human rights protections are maintained and possibly expanded under the Biden administration, it is crucial that states are equipped to oversee their businesses’ implementation of policies. Specifically in the realm of international human rights law, “states individually are the primary duty-bearers.” Especially if an enterprise is closely tied to its state, the state is primarily responsible for overseeing that the enterprise abides by human rights policies. Not only must states effectively watch over their enterprises’ potential human rights violations, but standard methods of monitoring and enforcement must be in place. There must be ways for states to ensure that common practices are used to measure compliance and impose penalties.
According to the Dodd-Frank Act signed in June 2010 under the Obama administration, US companies were required to publish all of their payments to any governments receiving their funds. This piece of anti-corruption legislation was effective in increasing transparency and accountability as it created an opportunity for corrupt practices to be exposed to the public eye; each company was required to reveal its payments on a project by project basis. During the Trump administration, US legislators repealed this section of the act. Opponents of the “publish what you pay” rule of Dodd-Frank argue that the legislation is unnecessary as the FCPA already bars individuals from engaging in bribery with foreign officials. What they fail to consider is that Dodd-Frank not only bars foreign bribery but also creates a mechanism for bribery to be revealed to the public in the event that it does occur. By forcing companies to publish what they pay to governments, they are further incentivized to avoid corrupt practices. Under the Biden administration, the new Senate configuration indicates that a policy shift is possible. In order to bring transparency and accountability back to the forefront of business practices, the new administration must revitalize the Dodd-Frank Act and renew the “publish what you pay” provision.
Regarding anti-corruption policy, the Biden administration must prioritize increased oversight and transparency through continued engagement with multilateral institutions. By shifting the policy focus from domestic to international, standards for anti-corruption can be standardized and enforced in common ways across different states. Integrating anti-corruption policy into a multilateral framework offers great advantages. Many jurisdictions are overlapping in instances of handling corruption and enforcing penalties related to it; thus, cooperation across different jurisdictions is crucial. As many of the US Department of Justice’s FCPA cases originate from foreign agencies, it is important to build an environment in which both US and foreign officials can take on collective approaches to solving cases.
To protect public welfare in the context of the COVID-19 pandemic, anti-corruption policies must ensure the quality of vaccines amidst vast distribution networks prone to breaches. Anti-corruption measures dismantled during the Trump administration need to be reconstructed. In particular, corporate monitors and the “publish what you pay” provision under the Dodd-Frank Act must be reinstated to increase transparency and accountability for US companies. Human rights protections and whistleblower protections are paramount issues concerning anti-corruption policy. Policies must be used to make whistleblowers feel safe in speaking out, and clear reporting mechanisms must be in place. Finally, the increasing incorporation of human rights protections into the framework of corporate behavior is a valuable trend that needs to be protected. The Biden administration must address each of these challenges through multilateral engagement with international agencies and prioritize the enforcement of standard practices in each area. By creating, amending, or reinstating the relevant legislation for each area, the Biden administration can mend existing gaps in anti-corruption enforcement.