Anti-bribery enforcement is a real risk

I have sometimes gotten a sense of annoyance from executives — even the ones who are fairly ethically oriented — when it comes to the specter of the Foreign Corrupt Practices Act: the country’s primary statute to combat international bribery.  The law can hold a US company culpable for the actions of its people overseas, even something as (arguably) remote as an independent contractor sales agent being too lavish in entertaining a doctor who works at a foreign state-owned hospital. Somehow, the law’s sweep, and its ambitious aim of leveling the commercial playing field by prohibiting what for years had been viewed as an unavoidable way of doing business, seems to make some execs resent the serious work needed to avoid a violation. (It reminds me of sitcom cliches about getting kids to do math homework: “It’s so haaaaard. Do I hafta?”)

Yes, you hafta — and for potent proof see a new criminal plea that was in the news last week:

WASHINGTON, June 29 /PRNewswire-USNewswire/ — A former executive of Philadelphia-based Nexus Technologies Inc. pleaded guilty today in connection with his participation in a conspiracy to bribe Vietnamese government officials in exchange for lucrative contracts to supply equipment and technology to Vietnamese government agencies, in violation of the Foreign Corrupt Practices Act (FCPA),…

This was not a big FCPA case against a big company. Siemens wound up shelling out some $800 Million in fines and disgorgements. But Lukas could wind up with ten years in the slammer.

So I think the Lukas case is a more potent warning. It says that FCPA enforcement won’t be limited to monster claims against ginormous companies. Any company can get nailed, and more to the point, executives who are not little Madoffs can still go to jail.  Consider that, next time you hear an exec acting like her  lawyer’s warnings about FCPA are the compliance equivalent of the Boy Who Cried Wolf.

And on the positive side, setting up the training, and systems, and monitoring, to mitigate the risk of FCPA violations can pay corollary benefits in terms of setting”tone from the top.” You can always quote JFK, and say your team should do it because it’s hard.

Lawyer sport: nice plea, Bernie

Anybody read all of Bernie Madoff’s allocution when he pled guilty? I pasted it, below.

It sounds like an odd mea culpa. But it’s actually  a neat, precise bit of lawyering. Put aside the lives he shattered, and you can almost enjoy the way his defense team tracks the required elements of the crimes to which he pled guilty — foreclosing any challenge to the judge’s acceptance of the plea — and still closes the door on any broader culpability by Madoff or his cohort.

I like what I saw one compliance guy say – that he’s tired of being asked at parties about Madoff, because it means people are confusing blatant criminal behavior (which criminals will always engage in) with insidious unethical behavior (which may be mitigated).

(Tip for those of us with, um, tired vision — click towards the bottom right corner of the frame below to see the allocution in “full screen” mode.)

[slideshare id=1136984&doc=bernard-statement-allocution31209-090312111816-phpapp01&type=d]