"It is clear that the questionable payments problem must be taken seriously. The number of U.S. firms implicated has been relatively small, but the pattern of improper behavior involved cannot be tolerated. It is totally inconsistent with American values. It threatens to harm our foreign relations. If allowed to continue, it could badly erode public and international confidence in American business and American institutions."
- June 14, 1976 White House Release: Statement by the President on Questionable Corporate Payments Abroad
Out of the Watergate scandal came an unrelated revelation: hundreds of companies had illicitly funneled millions of dollars to foreign agents and officials. Few doubted that such payments should be prohibited, but many wondered about jurisdiction and enforcement. Some considered protecting the integrity of financial reporting more important than prosecuting bribery. Political friction abounded as Congress, the U.S. Securities and Exchange Commission and the White House all grappled with these issues.
Stanley Sporkin, Director of the SEC Division of Enforcement, was watching the Watergate hearings when he realized that the corporate political payments being discussed must have been made without proper disclosure. His staff uncovered secret slush funds that had been used not only for political purposes but also for commercial endeavors abroad. Visit the Three Approaches, One Law in Wrestling with Reform: Financial Scandals and the Legislation They Inspired Gallery for primary and original materials and information on the development and 1977 enactment of the Foreign Corrupt Practices Act.
"The thing that has given me great pleasure is to bring to a meeting with you an inside General Counsel or CEO who has heard that you are a devil or madman and then hear him report to his board that you are hardly an unreasonable person."
- May 7, 1977 Letter to Stanley Sporkin from Manuel Cohen
The virtual museum and archive is grateful to generous donors that have made possible the preservation and sharing of the remembrances of persons from across the spectrum of financial regulation, including interviews with:
The virtual museum and archive is copyrighted by the SEC Historical Society. The Society reserves the right to restrict access to or use of the museum by any user at any time.
Users are prohibited from sharing or downloading any material for publication or commercial purposes without written permission from the Executive Director. Requests for permission must be submitted by email and specify the material requested and for what purpose.
Material used with the Society's permission should be credited to: www.sechistorical.org.