Letter to Senator Feinstein About Keeping California Companies Competitive Abroad

By Zein E. Obagi

This is a letter Mr. Obagi wrote to Senator Feinstein about updating federal regulations to keep Californian companies competitive abroad.

As a Candidate for California's 33rd Congressional District and fellow Democrat, I am writing to ask you to show our party's understanding of international trade by updating and clarifying the Foreign Corrupt Practices Act. As you know Senator, both sides of the aisle have put forth efforts to clarify the FCPA, to assist in its enforcement and also keep America competitive with foreign nations' trade practices.

International trade has evolved substantially since the passage of the Foreign Corrupt Practices Act in 1977. For this reason American business leaders and your Senate Judiciary colleagues Senators Klobuchar (D-MN) and Coons (D-DE) have called upon the Department of Justice to amend certain aspects of the FCPA. If we are to compete in the global marketplace, then the FCPA must be updated so it aligns with the anti-corruption standards of other global trade nations like the United Kingdom. We can modernize the FCPA and still ensure that US Companies uphold ethical business practices abroad.

We need to clarify who qualifies as a "foreign official." The definition of that term includes an "instrumentality [of a foreign official]," but instrumentality is not defined nor is its definition here logically apparent. This vagueness can lead to confusion and apprehension on the part of businesses looking to grow abroad, and we all want to see American businesses succeed internationally. By defining who does and does not constitute a foreign official, we can alleviate this confusion, facilitate commerce with foreign nations and make it easier for the DOJ to prosecute violations of the FCPA by making them clearer.

We should also add a rebuttable presumption that gifts, offers and reimbursements that ordinarily pertain to a business relationship are not violations of the FCPA when they are made to a foreign government that is acting as a market participant, after a business relationship with that government has been consummated in writing.[1] These expenditures are natural aspects of maintaining client relationships, but the FCPA still classifies them as violations. Moreover, these activities could be grounds for costly investigations, litigation and adverse judgments for California businesses. Our companies should not be penalized for maintaining foreign trade relationships just as they would with domestic trade partners.

Right now, California businesses expend enormous resources with insufficient assurances that they will not run afoul of the FCPA. Reforming the FCPA will go a long way toward restoring business confidence to expand into new markets. Senator, we have a real opportunity to help reverse the economic slowdown and help American businesses create the jobs and prosperity we desperately need. I'm asking you to stand with me as a Democrat who understands the complexities of international trade and support these reforms on behalf of California's businesses.

Very truly yours,

Zein E. Obagi, Jr.

California Business Attorney

Candidate for California's 33rd Congressional District

[1] Under this revision, if a company representative gave a foreign government a bottle of California sparkling wine after signing a contract with that government, the company would receive the benefit of a rebuttable presumption that it did not violate the FCPA.