The Anti-Corruption Report

The definitive source of actionable intelligence covering anti-corruption laws around the globe

Recent Issue Headlines

Vol. 1, No. 3 (Jul. 11, 2012) Print IssuePrint This Issue

  • Ten Strategies for Avoiding FCPA Violations When Making Charitable Donations

    Charitable donations by companies and their employees present at least two FCPA-related risks.  First, charitable donations may be – or may appear to be – intended to improperly influence foreign government officials associated with a charity.  Second, even bona fide donations may violate the books and records provisions of the FCPA if inadequately accounted for.  Accordingly, companies and employees contemplating charitable donations must contend with potential FCPA consequences.  Unfortunately, in the case of charitable donations – as with many other recurring business questions with potential FCPA implications – there is little authoritative guidance.  Business decision-making in this area is typically guided by experience and best practices.  The purpose of this article is to distill best practices with respect to avoiding FCPA violations when making charitable donations.  In particular, this article: discusses in greater detail the intersection of the FCPA and charitable giving; summarizes the modest volume of relevant precedent (including an ongoing investigation of a big name in the gaming industry); then details ten strategies for approaching charitable donations in a manner intended to mitigate FCPA risk.  In the background of this discussion is a macro trend.  It is becoming increasingly apparent that good corporate citizenship is good business.  As communication channels proliferate, both in terms of technology and access, the number of global customers is increasing and the average customer is becoming better informed.  Customer choices are being swayed by factors beyond product and service quality – factors including corporate reputation.  Reputation, in turn, is powerfully affected by a corporation’s charitable undertakings in the areas where it operates.  A well-orchestrated, well-positioned and judiciously publicized charitable campaign can boost the social profile of a company, which can impact revenue more quickly and directly than ever before.  But a bungled charitable campaign – for example, one that trips up the FCPA – can conjure up the uncharitable old adage: “No good deed goes unpunished.”  Companies should engage in smart charity, and doing so entails staying on the right side of the FCPA.  This article provides a roadmap for doing so.

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  • An Interview with Judge Stanley Sporkin, the “Father of the FCPA” (Part One of Two)

    The FCPA Report recently had the privilege of conducting a wide-ranging interview with the esteemed Judge Stanley Sporkin, who is widely credited with developing the books and records provision of the FCPA in the 1970s.  Judge Sporkin, a former federal judge in the District of Columbia, was Director of the Division of Enforcement of the SEC from 1974 to 1981, and General Counsel to the Central Intelligence Agency from 1981 to 1986.  He now advises private companies on compliance and is the Ombudsman for BP America.  Judge Sporkin was a driving force behind the creation of the FCPA, and this interview is perhaps the deepest conducted to date with a person whose depth on the topic cannot be surpassed.  In light of the length of our interview, we are publishing the transcript in two parts.  In this first part, Judge Sporkin offers valuable insight into, among other things: the origins of the FCPA following the Watergate hearings; his contemporaneous view on the difficulty of substantiating anti-bribery claims; the origins of internal investigations; the pro-business orientation of the FCPA; and more.  The second part will include Judge Sporkin’s comments on: self-reporting; the new FCPA Unit at the SEC; his proposal for amnesty (or a “flu shot,” as he calls it); the biggest mistake companies make when it comes to corruption; the movement to amend the FCPA; the potential importance of ombudsmen; and combining anti-corruption audits with annual audits.

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  • Seven Steps Companies Can Take to Incentivize Internal Reporting of FCPA Violations

    When real or potentially unlawful conduct is occurring at a public company or regulated entity, learning of it in real time and addressing it quickly is critical to that entity’s ability to respond and manage reputational and financial fallout.  The Securities and Exchange Commission’s Whistleblower Rules (promulgated under Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act), which award whistleblowers a percentage of the penalty paid by the company to the SEC as a result of the information from the whistleblower, contain certain key provisions.  In a guest article, Thomas Sporkin, a Partner at BuckleySandler LLP, outlines seven ways in which these provisions can be leveraged by entities to incentivize whistleblowers to report information internally, thereby providing the company with additional time to properly understand, contain, remediate and, in certain instances, self-report potential violations of the federal securities laws, including the FCPA.  See “When and How Should Companies Self-Report FCPA Violations? (Part Two of Two),” The FCPA Report, Vol. 1, No. 2 (Jun. 20, 2012).

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  • Lessons Learned on Crafting FCPA Compliance Programs from the Largest FCPA Case in History

    With the recent criminal and civil charges brought against former Siemens executives, a new chapter in the Siemens case has begun.  Siemens paid a record-setting fine to the U.S. government of $800 million in 2008 and over $800 million to German authorities, and conducted an internal investigation with a $1 billion price tag.  What did we learn – and what are we still learning – from this groundbreaking case?  In a guest article, William P. Olsen and Anne M. Eberhardt, Principal and Senior Manager, respectively, in Grant Thornton’s Forensic and Valuation Services practice, review the history of a company that revolutionized the world’s communications and electrical industries, follow its move to a business model that was almost entirely based on corruption, and analyze its landmark settlement with U.S. officials and the pending individual indictments, addressing the key compliance precedents the Siemens matter has set.

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  • Ernst & Young’s 2012 Global Fraud Survey Highlights Significant Challenges in Dealing with Corruption and Bribery Risks

    Ernst & Young (E&Y) recently released the results of its 12th Global Fraud Survey.  Through an independent research firm, E&Y interviewed 1,758 company executives across 43 countries to gauge their perspectives on the current prevalence of bribery, fraud and other corruption, and their attitudes towards practices that might run afoul of anti-corruption rules.  The survey also provides insight on attitudes, risks and regulations in the emerging markets of Africa, Brazil, China, Eastern Europe and India.  This article summarizes the key takeaways from the survey.

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  • Orthofix International Agrees to Pay $7.5 Million to the SEC and DOJ to Settle Charges that It Bribed Mexican Officials with “Chocolates”

    In a July 10, 2012 complaint, the SEC charged a Texas-based medical device company, Orthofix International N.V., with engaging in a seven-year bribery scheme involving its Mexican subsidiary Promeca S.A. de C.V. (Promeca).  The SEC alleges that Promeca employees referred to the bribe payments, which totaled over $300,000, as “chocolates.”

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  • Miller & Chevalier and Matteson Ellis Law’s 2012 Latin American Corruption Survey Results Shows Increasing Awareness of the FCPA

    U.S. law firms Miller & Chevalier and Matteson Ellis, in cooperation with a number of Latin American law firms, have conducted a survey of 439 corporate executives at companies that do business in Latin America to gauge their perceptions of corruption there and the effectiveness and prevalence of various efforts to combat corruption.  The results reflect a fairly sobering view of the prevalence of business and government corruption in Latin America, but also show increasing awareness of the FCPA and the importance of taking measures to avoid corruption risks.  This article summarizes the key findings of the survey.

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  • M. Scott Peeler Joins Stroz Friedberg to Lead New Compliance Division within Business Intelligence & Investigations Practice

    On July 9, 2012, Stroz Friedberg, a global digital risk management and investigations firm, announced that M. Scott Peeler has been named Managing Director and will lead the new Compliance Division within the Business Intelligence & Investigations practice based out of New York City.

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  • Miller & Chevalier Expands Export Controls and Economic Sanctions Practice with the Addition of Barbara D. Linney

    On June 5, 2012, Miller & Chevalier Chartered announced that former Blank Rome LLP partner Barbara D. Linney has joined the firm’s Export Controls and Economic Sanctions practice as a Member.  Kuang Chiang, a former licensing officer with the U.S. Department of Treasury’s Office of Foreign Assets Control, also joined the firm.  For analysis of a recent survey conducted by Miller & Chevalier, see “Miller & Chevalier and Matteson Ellis Law’s 2012 Latin American Corruption Survey Results Shows Increasing Awareness of the FCPA,” above, in this issue of The FCPA Report.

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