THE RESPONSIBILITIES AND LIABILITIES OF CORPORATE OFFICERS, DIRECTORS, AND MANAGERS UNDER THE FEDERAL SECURITIES LAWS WERE GREATLY INCREASED BY THE PASSAGE OF THE FOREIGN CORRUPT PRACTICES ACT OF 1977. WHILE THE LAW DOES PROHIBIT BRIBING FOREIGN OFFICIALS AND POLITICIANS, NOT ALL OF THE PRACTICES DEALT WITH ARE CORRUPT, NOR ARE ALL OF THEM FOREIGN. THE MOST IMPORTANT PROVISIONS ARE THOSE EQUALLY APPLICABLE TO THE DOMESTIC OPERATIONS OF ALL COMPANIES THAT REPORT TO THE SECURITIES AND EXCHANGE COMMISSION (SEC). TO IMPROVE THE EFFECTIVENESS OF EXISTING LAWS, THE SEC SPONSORED LEGISLATIVE PROPOSALS WHICH BECOME THE RECORDKEEPING AND INTERNAL CONTROLS SECTIONS OF THE 1977 ACT. THE LAW ATTACKS THE THREE BASIC RECORDKEEPING PROBLEMS UNCOVERED BY IMPROPER PAYMENT INVESTIGATIONS, I.E., RECORDS THAT FAIL TO RECORD IMPROPER TRANSACTIONS AT ALL, RECORDS THAT FALSIFY ASPECTS OF IMPROPER TRANSACTIONS, AND RECORDS THAT CORRECTLY SET FORTH QUANTITATIVE ASPECTS BUT FAIL TO RECORD QUALITATIVE ASPECTS WHICH WOULD REVEAL THEIR ILLEGALITY. TRANSACTIONS WHICH MUST NOW BE PROPERLY DOCUMENTED INCLUDE POLITICAL CONTRIBUTIONS, PAYOFFS TO GOVERNMENT OFFICIALS, AND ILLEGAL REBATES TO CUSTOMERS. INTERNAL CONTROLS PROVISIONS STATE THAT TRANSACTIONS MUST BE EXECUTED IN ACCORDANCE WITH MANAGEMENT'S GENERAL OR SPECIFIC AUTHORIZATION, MUST BE PROPERLY RECORDED, AND MUST REFLECT ACCURATE ACCOUNTABILITY OF ASSETS. BUSINESSMEN ARE PROHIBITED, UNDER PENALTY OF A $1 MILLION FINE, FROM BRIBING OR ATTEMPTING TO BRIBE FOREIGN OFFICIALS. ALTHOUGH THE ACT IS RELATIVELY NEW, THE SEC HAS ALREADY FILED CHARGES AGAINST COMPANIES FOR VIOLATING IT. BOTH COMPANIES AND EXECUTIVES HAVE BEEN NAMED IN THE CHARGES, AND ANY EXECUTIVE WHO WILLFULLY VIOLATES ANY PROVISION OF THE ACT CAN BE IMPRISONED FOR UP TO 5 YEARS AND FINED UP TO $10,000, WITH THE EXCEPTION OF THE FOREIGN BRIBERY FINE SPECIFIED EARLIER. THE MOST VULNERABLE CORPORATE OFFICIALS INCLUDE THE FINANCIAL VICE PRESIDENT, CONTROLLER, TREASURER, TAX DIRECTOR, AND INTERNAL AUDITOR. (LWM)