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.

Ethics in ethics training

Interesting appellate decision spotted by lawyer Howard J. Susser of Boston’s Burns & Levinson LLP: The copyright case is a cautionary tale to compliance trainers who build their course materials by cutting, pasting, borrowing, and lightly paraphrasing from somebody else’s course, like maybe from a PowerPoint made available at a conference or from a course provided by a vendor that their company’s not using anymore. (I’m shocked, shocked….)

Well, that’s copyright infringement. In Situation Management Systems, Inc., v. ASP Consulting, LLC (1st Cir. March 19, 2009), the First Circuit Court of Appeals nails one training company for using another’s course materials as a template for its own. (The opinion is available at the Court’s website.) The Court says those courses are “original expression,” even if they are “vapid” and “filled with generalizations, platitudes, and observations of the obvious.”

In his article posted by the firm, Mr. Susser concludes: “What this decision means is that companies and individuals risk exposure when copying for commercial purposes any training materials or other commercial business materials from competitors or other sources.”

We ought to know better, given our concern with compliance. It’s kinda like a movie exec downloading bootleg films. Hurts to be hoisted on one’s own ethical petard.