National Geographic under Investigation for Violation of Foreign Corrupt Practices Act

The UK-based Independent (among others) reports that world-renowned magazine National Geographic is under investigation by the U.S. government over payments it made over a span of many years to Zahi Hawass, former Secretary General of Egypt's Supreme Council of Antiquities and Minister of Antiquities of Egypt for a brief period in 2011.

Hawass, himself a controversial figure in the scholarly community, claims that the payments were contractual in nature and not a bribe. However, the Foreign Corrupt Practices Act (FCPA) gives the U.S. government the authority to prosecute businesses and individuals for conduct that is not illegal, and perhaps seen as routine, in other countries. Earlier this year, for example, Wal-Mart was investigated for payments to local authorities in Mexico made to speed up permitting processes. 

Critics of the FCPA say that it puts U.S. businesses at a competitive disadvantage where certain payments which would be considered bribes in the U.S. may be expected or even required by officials. As the New York Times DealBook blog reported in May:

As the corruption investigations have ramped up, the United States Chamber of Commerce has pushed back against the law by arguing that it hampers American businesses because of how broadly it can be applied. Recent cases against pharmaceutical companies, like Pfizer for payments to foreign doctors who are part of state-controlled health systems show how the law can be used in areas once thought to fall outside its purview.

In response to criticisms about how the law was being applied, the Justice Department and S.E.C. issued a resource guide last November that outlines their views about the scope of the law. Companies hoped that the guidance would take a more restrictive view of the Foreign Corrupt Practices Act by providing clearer guideposts on when the statute does — and more important does not — apply to a transaction.

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