Cashing In on Corruption

But equally important has been a step-up in enforcement -- 38 cases brought last year, compared with fewer than 10 in most previous years. At the Justice Department, a team that used to have the equivalent of two people assigned to FCPA now has as many as 12 prosecutors, assisted by a new team of FBI agents dedicated to these cases. Both agencies are receiving lots of valuable help from foreign governments since the signing of a global convention that for the first time made corporate bribery illegal in other countries and gave U.S. investigators access to secret bank accounts and foreign tax records.

But even those changes would not have generated the increase in enforcement actions if it hadn't been for the rush of confessions from the companies themselves. Consistent with its general approach to corporate crime, the Bush administration had made clear it would be willing to accept significantly reduced penalties if companies voluntarily disclosed violations rather than covering them up.

Voluntary disclosure also got a push from the post-Enron Sarbanes-Oxley Act, which, among other things, required corporate directors to pay particular attention to "internal controls" -- a responsibility that includes not only accounting standards but ethical ones as well. If for no other reason than to protect themselves from legal liability and attacks on their reputations, directors now are quick to order up an outside investigation whenever even the hint of bribery is alleged by customers, employees or competitors.

And don't think law firms aren't playing off those fears by aggressively marketing their services as investigators, risk mitigators and compliance counselors.

The result is sudden flood of labor-intensive legal work for both partners and associates, particularly in the local offices of big international firms. One longtime practitioner estimates that the FCPA segment has grown tenfold in the past decade, with lots of litigators and white-collar defense attorneys now jumping into the act. And while it is likely to peak in the next year or two, FPCA work, along with the coming flood of subprime mortgage litigation, should be enough to keep Washington's legal industry humming, even as the rest of the economy slips slowly into recession.

Steven Pearlstein can be reached at pearlsteins@washpost.com.