The Corporate Watergate

Abstract

US claims on illicit corporate payments came to dominate global anti-corruption debates in the 1990s. This chapter traces the steps that led to the re-launch of global claims-making in 1989 and shows how the US concern with illicit/corrupt payments emerged in the first place. The main reason for the US initiative of 1989 was the FCPA, which can be seen as a product of Watergate, as much as a product of the ITT aftermath. While the ITT affair triggered debates in the United States on the foreign policy repercussions of corporate misconduct, Watergate made these debates more domestically oriented. It was the combined work of the Subcommittee on Multinational Corporations, the Watergate Special Prosecution Force, the SEC and a number of follow-up Senate committees that shed light on the illicit payments problem and informed much of the thinking behind the FCPA. The US congressional hearings on multinational corporations and foreign corporate payments provide testimonies on the putative condition out of which global claims on corruption emerged. The chapter further establishes the re-emergence of claims after the 1988 Amendment to the FCPA, when the US chose the OECD as the appropriate international forum to achieve consensus on corrupt practices.