Two Democratic senators looking to amend the Foreign Corrupt Practices Act urged U.S. Attorney General Eric Holder to clarify what the Department of Justice considers a bribe of a foreign official. They said the lack of transparency has made it expensive for companies to comply with the law.
Sens. Chris Coons, D-Del., and Amy Klobuchar, D-Minn., also asked Holder to explain under what circumstances it would pursue a bribery case.
The letter comes as law enforcement agencies have stepped investigations in to possible violations of the act, including an investigation into Wynn Resorts Ltd.'s $135 million donation to the University of Macau and its gaming licenses in the Chinese territory.
The Securities and Exchange Commission, which announced its inquiry in a Feb. 8 letter, said its investigation also relates to a dispute between Wynn Resorts and its largest shareholder, Kazuo Okada, which includes Okada's demand for release of company financial records.
On March 1, Las Vegas Sands Corp., which has long had a casino in Macau and will soon open a much larger resort there, revealed that the SEC and Justice Department are investigating possible violations of the Foreign Corrupt Practices Act.
The 1977 federal law prohibit U.S. citizens or corporations from offering bribes to a foreign official, individual or business to obtain or retain a business advantage.
"We don't want to discount the SEC investigation," Credit Suisse analyst Joel Simkins said Friday. "With that said, from what we can read and observe from the outside, everything that has taken place to date ... appears on the up and up. We view Wynn as doing its best to be a good corporate citizen in Macau."
In a Wynn Resorts research report, Simkins said if an amicable resolution cannot be found, he suggested Wynn buy out Okada's stake. Okada's 24.549 million shares would imply a market value of $2.8 billion as of the closing share price of $112.67 on Thursday.
Simkins said the SEC investigation has weighed on Wynn Resorts' share price. Wynn Resorts shares, up 2 percent on the year, have lagged the Standard & Poor's 500, which has risen 8 percent; MGM Resorts International, up 41 percent; and Las Vegas Sands, up 25 percent.
The U.S. government has stepped up enforcement of the Foreign Corrupt Practices Act, doling out $1.8 billion in sanctions to 23 companies in 2010, according to the industry blog named FCPA Blog.
The SEC announced 15 settlements of violations to the act last year, totaling more than $251.78 million, according to case files posted on the agency's website.
In a two-page letter sent Thursday to Holder, the senators asked the Justice Department to outline the benefits granted to companies that self-report a violation and cooperate with an investigation and to explain what it considered an adequate compliance program.
"It has become apparent that too many companies are devoting a disproportionate amount of resources to FCPA compliance and internal investigations," the senators said in the letter.
Klobuchar and Coons, both of whom sit on the Senate Committee on the Judiciary, said a climate of responsible corporate behavior begins with "clear rules," which are fairly and transparently applied.
"It is our hope that effective guidance will allow law-abiding companies to comply with the FCPA more efficiently, while not diminishing the government's ability to enforce the law," the senators said.
In November, the Justice Department said it would release guidance on the 1977 law. The guidance was expected to come in the form of updates to a document called the "Lay-Person's Guide to the FCPA."
Contact reporter Chris Sieroty at email@example.com or 702-477-3893.