EMBRACING FRAGILITY IN OUR DATA: A CAUTIONARY EXAMPLE FROM RESEARCH ON THE FCPA AND VOLUNTARY DISCLOSURE

Peter Leasure*

  1. INTRODUCTION

     Enacted by the United States in 1977 as part of the Security Exchange Act of 1934,[1] the Foreign Corrupt Practices Act (FCPA) was one of the first of its kind in the area of foreign official anti-bribery legislation.[2] Despite increasing levels of enforcement[3] and a litany of scholarly critiques, statistical data and analysis on the FCPA is hard to find. In fact, the Organization for Economic Cooperation and Development (OECD) has noted this gap. In a Phase 2 Report, the OECD stated:

[T]here are no clear, documented, formal processes between agencies to underpin the vital exchange of information and reporting of suspected violations, and a corresponding absence of statistics.  This results in a lack of transparency and of data, which, if captured, could serve useful analytical purposes in reviewing the workings of the FCPA.

     To fill this gap, some authors have begun to address various FCPA empirical questions with statistical analysis by building their own datasets.[5]  Unfortunately, some of these studies suffer from severe methodological flaws.

     The current paper aims to critique one of these studies[6] which explored whether companies with FCPA transgressions received a benefit to voluntary disclosure.  The goal of this paper is to show that those involved in FCPA research, especially those publishing legal journals, could greatly benefit from a better understanding of statistics.  Though this paper will demonstrate that the previous study possesses several flaws, this author does not argue for the abandonment of statistical research in FCPA research.  On the contrary, the present study shows that a better understanding of statistics is indeed vital for FCPA research to progress. . . .

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Suggested Citation:
Peter Leasure, Embracing Fragility in Our Data: A Cautionary Example from Research on the FCPA and Voluntary Disclosure, Cumb. L. Rev. Online (Aug. 28, 2017, 5:00 pm), https://cumberlandlawreview.com/2017/08/28/embracing_fcpa

* Peter Leasure is a Ph.D. candidate in the Department of Criminology and Criminal Justice at the University of South Carolina. His research focuses on corporate compliance and collateral consequences of conviction. His work has appeared in journals such as the Journal of Financial Crime, Journal of Experimental Criminology, Journal of Money Laundering Control, and Yale Law and Policy Review Inter Alia.

[1]  See 15 U.S.C. §§ 78m(b), 78dd-1, 78dd-2, 78dd-3 (2006).

[2] See Mike Koehler, The Facade of FCPA Enforcement, 41 Geo. J. Int’l L. 907, 911-13 (2010). For reviews of the statutory provisions of the FCPA and its penalties, see Elizabeth Spahn, International Bribery: The Moral Imperialism Critiques, 18 MINN. J. INT’L L. 155, 157 (2009).

[3] TRACE International Global Enforcement Report (2014), available at http://www.traceinternational.org/wp-content/uploads/2014/08/TRACE-Global-Enforcement-Report-2014.pdf.

[4] Org. for Econ. Co-operation and Dev., Application of the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the 1997 Recommendation on Combatting Bribery in International Business Transactions, 27 (October 2002), https://www.oecd.org/daf/anti-bribery/anti-briberyconvention/1962084.pdf.

[5] See generally Bruce Hinchey, Punishing the Penitent: Disproportionate Fines in Recent FCPA Enforcements and Suggested Improvements, 40 Pub. Cont. L.J. 393 (2011); Annalisa Leibold, Extraterritorial Application of the FCPA Under International Law, 51 Willamette L. Rev. 225 (2014).

[6] See generally Hinchey, supra note 4.

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