Reference no: EM132299920

Urgent need help ...please read the below discussion and put your opinion in 4 paragraphs ... please make sure cover all the aspect of the discussion

"Is the Foreign Corrupt Practices Act Obsolete?" was an interesting read because of its focus on the legal aspect of it which, as a law student, had me quite intrigued. In the passage arguing that yes, the FCPA is obsolete, Joseph W. Yockey argues that there are three main issues with the current structure and enforcement of the FCPA. First, he argues that the threat of sanctions limits the ability for government agencies to deter wrongdoing. Second, the current structure encourages firms to act now and defend later. Third, the FCPA does not address international firms compliance with national regulations.

While all of these arguments have merit to them, the one that stuck out to me is his first argument, that the FPCA limits governments agency's ability to deter wrongdoing. Yockey believe that the firms the FPCA means to target are so large, that there is no way to systematically change the way they operate. He argues that, because of this difficulty, regulators will try to crack down on as many operations as possible, even if it means going after smaller entities, allowing the larger ones to operate with little regard for compliance with the FPCA. He further argues that, if the FPCA were reformed in such a way that sanctions were increased in severity, that the costly burden would ultimately be handed down to the consumer, much to the chagrin of both the entity and consumer.

Yockey presents a solution that is not only from a legal standpoint quite feasible, but also makes sense as a way to change the culture of corporations. Essentially, his suggestion is that the principal agency relationship between employee and employer is eliminated when acts committed by an employee are in violation of the FPCA. This option makes sense on two fronts.

First, it would eliminate the sense of security for an employee committing these acts because under the current model, the entity ultimately is responsible for the acts of the employee. As Yockey puts it: "As long as bribery is profitable and sanctions are borne primarily at the entity level, managers have little incentive to try to stop it." This is spot on. Its basic human nature to take risks when you bear no liability for failure. If you as an individual could not suffer harm from your actions,why wouldn't you act with reckless disregard?

Second, it could promote the concept of whistleblowing, harkening back to our reading from a few weeks ago. As Yonkey puts it "Rules and commands are rarely as effective in preventing internal misconduct as a system that hires for and seeks to reward and perpetuate a culture of compliance." While I don't want to focus too much on our previous readings, I couldn't help but be reminded of the Citimortgage case and how Sherry Hunt was put through tremendous pressures from her superiors to keep quiet about the fraudulent actions they were committing, for no other reason than they knew the punishment the entity would face should they be discovered. What if that was eliminated? What if, when a few rouge employees act in a fraudulent or deceitful way to benefit financially, those individuals are punished, rather that the entity? Would the entity's chief officers be as inclined to try and silence those who attempt to expose the truth? It can be argued that they would not be, as the entity would rather a few bad apples be cut from the branch than face incredibly high monetary fines, sometimes climbing into the billions.