The Magazine of Corporate Responsibility

Report Cites “New Era” in Global Anti-Corruption Fight

by Michael Connor

Efforts to combat transnational bribery and corruption could be enhanced by the creation of a top level U.S. government task force with a mandate to develop diplomatic and other incentives for other countries to adopt laws similar to the U.S. Foreign Corrupt Practices Act (FCPA), according to a new report published by The Conference Board, a nonprofit business research and membership organization.

The report, co-authored by attorneys Andrea Bonime-Blanc and Mark Brzezinski, suggests that the task force – comprised of officials from the U.S. Departments of Justice, State and Commerce - approach the issues of bribery and corruption in the same way that the U.S. government promoted international adoption of anti-money laundering legislation.

Bribe"After two decades of lax enforcement and half-hearted commitment, global anti-corruption efforts appear poised to intensify," the reports says. "But achieving the goal shared by both policymakers and international businesspeople to eradicate at least the most blatant forms of public corruption will require a more concerted and integrated approach—not only within companies and governments but across industries and borders."

Signs of progress on the international anti-corruption front, according to the report, include more multilateral agreements such as last year’s adoption by 38 member countries of the Organization for Economic Cooperation and Development (OECD) of guidelines for voluntary private sector compliance with the OECD Anti-Bribery Convention. In the United Kingdom, Parliament earlier this month passed a groundbreaking anti-corruption bill that has even more expansive enforcement and punishment provisions than the FCPA.

The report follows a wave of major criminal and civil prosecutions and settlements involving transnational bribery by large global companies including Siemens, BAE and Daimler.   Only last week, Avon Products Inc. disclosed that it had suspended four senior executives while it investigated charges of bribery in China and other countries.  Hewlett Packard has also confirmed an investigation of several of its former employees in connection with possible bribery and business contracts in Russia.

“The first year of the Obama Administration has seen a surge in FCPA enforcement, producing  a buzz among corporate executives that the old ways of doing business with ‘a wink and a nod’ are over, and that business decisions taken years ago may result in serious liability,” the report states.

In addition to the top-level government task force, according to the report, other possible steps to enhance enforcement include an increase in multilateral anti-corruption efforts with an eye toward greater collaboration with international police (InterPol), national prosecutors, and local ministries of justice and the interior.   Another step would be the creation of a federally-funded anti-corruption institute that could tap monetary settlements by FCPA violators to finance research on “what works and what doesn’t” regarding anti-corruption efforts.

The reports says the “interests of the public sector, whether the U.S. government or any other responsible government, in eradicating corruption are clear: corruption is the scourge of economic development, seems to be correlated to more authoritarian and despotic regimes, and is the depriver of goods and services to the masses in favor of the few. Indeed, corruption is associated with a variety of other forms of criminal behavior, including organized crime and terrorism.”

Private sector interest in opposing corruption is also growing, the report adds, in part because it is increasingly costly to engage in corruption. “If a business pays bribes, it not only loses the money paid but it becomes automatically beholden, through extortion, to the payee (and others in the know),” the report states.  “Moreover, when a business is caught in the act of bribing, it can suffer serious legal, criminal, and reputational consequences.”

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