Before the FCPA's passage, its opponents argued that criminalizing foreign bribery would put American companies at a disadvantage against international competitors from countries with looser laws -- some governments actually allowed corporations to deduct their bribe payments from their taxes -- and would discourage them from doing business in corruption-prone parts of the world. In 1995, John Hines, Jr. of Harvard's Kennedy School released a paper arguing U.S. companies were in fact investing less in countries where bribery was prevalent than they might have otherwise. When the members of the Organization for Economic Cooperation and Development agreed on an international convention against bribery, the Clinton administration pushed Congress to adopt it by arguing it would level the playing field for U.S. businesses, which were allegedly losing $30 billion a year in business to less scrupulous competition.

Even after the convention was adopted, the FCPA still remained largely beneath the radar. That changed dramatically in 2007. The graph below, based on annual report by the law firm Shearman & Sterling, shows how the yearly number of Department of Justice cases brought against corporations more than doubled in middle of the last decade.





The penalties paid out by companies also surged, peaking at more than $1.7 billion in 2010.

What brought on the sudden shift isn't entirely clear. The Sarbanes Oxley Act's accounting reforms might have made it more difficult for companies to hide bribes on their books. Meanwhile, the United Nations adopted its own convention on corruption in 2003, and there may have been a sense that the United States needed to show good faith by enforcing its own laws more stringently. If you're to believe comments from Justice Department officials at the time, the Bush Administration simply thought that combating graft was important to the growth of global business. Others have been skeptical of the DOJ's motives. A 2010 Forbes article argued that the only beneficiaries of the government's crusade seemed to be white collar defense lawyers, who reaped hundreds of millions of dollars worth of fees from companies conducting lengthy internal investigations.

What are these prosecutors accomplishing? Maybe they are fighting for truth and justice. Maybe, that is, it makes sense for the U.S. to hold its corporations to a higher standard of integrity than the French or Chinese outfits they compete against when trying to win business abroad. The prosecutors, though, are doing something else at the same time. They are creating a lucrative industry -- FCPA defense work -- in which they will someday be prime candidates for the cushy assignments.

Regardless of why, the reality is that the FCPA has transformed into one of the most fearsome elements in the SEC and Justice Department's arsenals. Some of the cases have involved fairly small stakes. Take the American couple who were sentenced to six months in jail for bribing organizers of a Thai film festival. Others, however, have been blockbusters. In 2009, Halliburton agreed to pay $559 million to settle charges that a former unit had bribed Nigerian officials while building a gas plant. German engineering firm Siemens has coughed up the largest settlement so far, paying $800 million in 2008 to put to rest allegations over the company's pervasive use of bribes in its global operations.