You would think that knowing the corruption risks created by use of third-party agents that every company — big and small — would focus on due diligence and anti-corruption compliance for its third-party consultants and agents.   But that is not the case.  Numerous companies have faced the daunting task of applying anti-corruption controls to its third-party agents.  It takes perseverance and commitment.  A dedicated compliance or...

Without effective corporate governance there cannot be effective compliance.  A good maxim to follow and a basic point which makes sense.  The number of articles, books and thought leaders dedicated to corporate governance is overwhelming.  But somehow we read every week about some new scandal, and how a corporate board was dysfunctional.  Compliance is just one small aspect of corporate governance but a compliance program...

“No brilliance is required in law, just common sense and relatively clean fingernails,” John Mortimer (author and creator of Rumpole of the Bailey). Lawyers and compliance professionals like to pat themselves on the back.  Or as I like to say — “don’t break your arm patting yourself on the back.” In the anti-corruption compliance area, we professionals like to advise everyone  to “document, document and...

The SEC is starting to repair its image.  The Madoff scandal dealt a terrible blow to the reputation and morale of the SEC staff. The SEC is quietly increasing its enforcement efforts.  For fiscal 2011, the SEC brought a record number of enforcement cases.  While such figures are impressive, some critics claim that the SEC’s cases do not match the impact of cases brought in the...

The Justice Department bought itself some time to try and help themselves in the FCPA enforcement area.  The Chamber of Commerce and others have criticized DOJ for its failure to provide clear guidance on the meaning of the FCPA and how to comply with the law. The news from the last FCPA industry meeting was supposedly big – Assistant Attorney General Breuer announced that DOJ...

Common sense ain’t common.  — Will Rogers Corruption challenges should rarely prevent a company from entering a country’s market.  Assuming that the business case can be made for entering the market, a decision not to enter a market because of corruption reflects a lack of problem solving and compliance creativity.   It is easy to say “no” and list all the reasons not to enter a...

The FCPA, which was passed in 1977, contains an exception for facilitating payments.  The exception was expanded and made more explicit in the 1988 amendments to the FCPA – to include a facilitating or expediting payment made to “expedite or secure the performance of a routine governmental action.” With the global anti-corruption movement, there has been a marked trend against allowing facilitation payments.  The OECD...

Last year, the Securities and Exchange Commission (SEC) sent shock waves through the securities industry when it issued inquiry letters to financial institutions, and private equity and hedge funds focusing on anti-corruption compliance.  This year, Richard Alderman, the Director of the Serious Fraud Office in the United Kingdom, increased industry concern when he gave a series of speeches outlining the enforcement focus of the SFO against the private equity industry....

It is surprising that companies have not really instituted more procedures for conducting due diligence of third parties.  The 2011 Deloitte Anti-Corruption Practices Survey has some surprising results.  Corporate leaders were pessimistic about their company’s anti-corruption compliance.  The four most cited reasons for this lack of confidence is the absence of a stand-alone anti-corruption policies; infrequent anti-corruption audits; lack of due diligence and monitoring of...

The Securities and Exchange Commission (SEC) has focused its regulatory and enforcement efforts on interactions between financial institutions, investment funds and private equity funds, and foreign sovereign wealth funds.  The SEC’s action is predicated on a legal determination that managers at the sovereign wealth funds fall under the FCPA’s definition of a “foreign official.”   As of July 2011, sovereign wealth funds totaled $4.7 trillion under asset management, an...