Tag: Charitable donations

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31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 12 – Policies on Charitable Donations

What should your compliance policy and procedures on charitable donations look like? What should you prohibit or even caution against? The starting point is the 2012 FCPA Guidance regarding charitable donations. The information on the red flags from the Opinion Releases and the best practices, as set out in the 2020 FCPA Resource Guide, have been available for some time. From the Schering-Plough and Lilly enforcement actions, your policy should consider the timing of charitable donations to see if they are at or near the time of the awarding of new or continued business. Finally, in managing the relationship, you now need to look at overall increases in sales to determine if they are tied to a pattern of charitable donations. By looking at the timing and quantum of charitable donations, internal audit may be able to ascertain that a spike in sales is tied to corrupt conduct.

Three key takeaways:

1.What are the basic inquiries to make around charitable donations?

2.Use all of the communication tools the DOJ has provided; written guidance, enforcement actions and Opinion Releases to inform your charitable donation policy.

3. Document, Document, and Document the basis of your charitable donations risk assessment.

For more information, check out The Compliance Handbook, 4th edition, here.

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31 Days to More Effective Compliance Programs

One Month to More Effective Written Standards: Day 11 – Charitable Donation Enforcement Actions

When is a rose not a rose? When it is a charitable donation not made for philanthropic purposes and violates the FCPA. This was a feature of the Eli Lilly and Company (Lilly) FCPA enforcement action brought by the SEC in 2012, involving a bribery scheme utilized by Lilly in Poland. The scheme and FCPA violations mirrored an earlier FCPA enforcement action, also brought by the SEC as a civil matter, rather than by the DOJ as a criminal matter, against another U.S. entity Schering-Plough, for making charitable donations in Poland which violated the FCPA. One of the remarkable things about both of these enforcement actions, brought almost eight years apart, was that they involved improper payments to the same Polish charitable foundation to wrongfully influence the same Polish government official to purchase products from both of these companies.

Three key takeaways:

  1. Every compliance practitioner should study both the Lilly and Schering-Plough enforcement actions.
  2. What is the purpose of the charitable entity you are making a donation to?
  3. “Document, Document, and Document” your due diligence around donors.

For more information, check out The Compliance Handbook, 4th edition, here.

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31 Days to More Effective Compliance Programs

Opinion Release guidance on charitable donations


Opinion Releases can provide valuable information for the compliance practitioner. I agree with the statement found in the 2012 FCPA Guidance that “DOJ’s opinion procedure is a valuable mechanism for companies and individuals to determine whether proposed conduct would be prosecuted by DOJ under the FCPA. Generally speaking, under the opinion procedure process, parties submit information to DOJ, after which DOJ issues an opinion about whether the proposed conduct falls within its enforcement policy.” In the areas of charitable donations, the DOJ has provided four Opinion Releases which give solid guidance on this tricky issue under the FCPA. In each Opinion Release, the DOJ indicated that it would not initiate prosecutions based upon the fact scenarios presented to it.
Three key takeaways:

  1. You can utilize the Opinion Release process for a wide variety of issue.
  2. You must manage your charitable donations program even after the money has been donated.
  3. Never forget the Mendelsohn common sense approach to charitable donations.