Tag: US Strategy on Countering Corruption

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What 2021 Brought to Compliance

2021 was a very significant year for every compliance practitioner and compliance program. While there was a paucity of corporate FCPA enforcement actions, the three enforcement actions were significant with multiple lessons for the compliance professional. In Deutsche Bank, we learned about the costs of a corrupt culture and recidivism, in Amec Foster Wheeler, we saw happens to a company which pays bribes and then tries back out; the criminals they are dealing with have them in an untenable position that they must continue to pay the bribes and how catastrophic failure in pre- and post-acquisition due diligence can lead to massive FCPA violations. Finally, in WPP, we saw how accepted business incentives can become perverse, what happens when you ignore whistleblowers. However, there were two major policy announcements from the Biden Administration which every compliance professional needs to not simply be aware of but study and implement solutions based upon these announcements.
In late October, Deputy Attorney General Lisa O. Monaco gave a Keynote Address at ABA’s 36th National Institute on White Collar Crime (Monaco Speech). Her remarks were noted by many commentators. Her remarks should be studied by every compliance professional as they portend a very large change in the way the DOJ and potentially other agencies enforce the FCPA. This has significant implications for every Chief Compliance Officer (CCO), compliance professional and corporate compliance programs.
The key changes announced in the Monaco Speech were as follows: (1) “today I am directing the department to restore prior guidance making clear that to be eligible for any cooperation credit, companies must provide the department with all non-privileged information about individuals involved in or responsible for the misconduct at issue. To be clear, a company must identify all individuals involved in the misconduct, regardless of their position, status or seniority.” This portends a return to the strictures of the Yates Memo. (2) “The second change I am announcing today deals with the issue of a company’s prior misconduct and how that affects our decisions about the appropriate corporate resolution. (3) The final change I am announcing today deals with the use of corporate monitors.” This final change is a rejection of the strictures laid out in the Benczkowski Memo regarding the DOJ use of corporate monitorships.
In November, the Biden Administration released the United States Strategy on Countering Corruption (the “Strategy”); subtitled “Pursuant To The National Security Study Memorandum On Establishing The Fight Against Corruption as a Core United States National Security Interest”; in response to President Biden’s prior declaration of corruption as a national security issue of the United States. While obviously focused on the US government’s role in leading the fight against corruption, the entire document portends a major sea change in the approach of fighting bribery and corruption, literally on a worldwide basis. For this reason alone, it should be studied by all compliance professionals.
The Strategy has five pillars. Pillar 1 is Modernizing, Coordinating, and Resourcing U.S. Government Efforts to Fight Corruption, with  five strategic objectives (1) to enhance corruption related research, data collection, and analysis; (2) improve information sharing within the U.S. Government, with non-U.S.-Governmental entities, and internationally; (3) increase focus on the transnational dimensions of corruption; (4) organize and resource the fight against corruption, at home and abroad; and (5) integrate an anti-corruption focus into regional, thematic, and sectoral priorities.
Obviously, this more holistic approach is most welcomed. Corruption does more than simply steal money from the world economy. According to the Strategy, “Corruption robs citizens of equal access to vital services, denying the right to quality healthcare, public safety, and education. It degrades the business environment, subverts economic opportunity, and exacerbates inequality. It often contributes to human rights violations and abuses and can drive migration. As a fundamental threat to the rule of law, corruption hollows out institutions, corrodes public trust, and fuels popular cynicism toward effective, accountable governance.” I would add several others such damaging the fight against climate change, destroying ethic business practices and, of course, leading to transnational crime and terrorism.
I cannot wait to see what 2022 will bring the compliance community.

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Farewell to Dave Campbell and the US Strategy on Countering Corruption – Holding Corrupt Actors Accountable

We are exploring the recently released the United States Strategy on Countering Corruption (the “Strategy”); subtitled “Pursuant To The National Security Study Memorandum On Establishing The Fight Against Corruption as a Core United States National Security Interest”; in response to President Biden’s prior declaration of corruption as a national security issue of the United States.  Over this 5-part blog series I will be delving into the Strategy and considering how it will impact the compliance professional. We have considered Pillar 1, modernizing, coordinating, and resourcing US government efforts to fight corruption. Next, we took up Pillar 2, curbing illicit financing. With Pillar 3, we look at holding corrupt actors accountable.
If you grew up in Texas in the ‘60s, ‘70s, ‘80s, ‘90s or in the 21st century, there is one name you always associated with Texas high school football – Dave Campbell. “Dave Campbell’s Texas Football” magazine, which came out every August beginning in 1962 was the Bible of Texas High School football, detailing every team in every district across the state. As Richard Justice said in his Texas Monthly piece on Campbell, Dave Campbell Made Texas Football the Juggernaut It Is Today, “His decision to write about every team and every district in Texas, to give every single football fan in the state something that spoke directly to each of them, was a monumental task. In the beginning, it surely was a challenge to persuade high school coaches to take an hour of their time to provide scouting reports on their teams. Suddenly, Texans from as far away as El Paso and Beaumont cared about the Plano–Highland Park game and began following the careers of great coaches like Bob McQueen at Temple, John Wilkins at Odessa Permian, Gordon Wood at Brownwood, G.A. Moore at Celina, and many others.”
So, farewell to one of the greatest sportswriters I have ever read. He may not have been a household name outside the State of Texas, but his influence was far beyond the state borders. Picking up a copy of Dave Campbell’s Texas Football marked the start of the football season in Texas, and it was literally a reference guide throughout the year.
The Strategy lists out several areas detailing the invidiousness of corruption. It states, “authoritarian regimes and their proxies have been shown to engage in bribery and other corrupt acts as a means to advance their strategic goals, while exploiting the international financial system to offshore illicit gains, and influence elections and policies in democratic states. Corruption in the form of state-directed cross-border investments from authoritarian states, for example, has had a corrosive effect on institutions in developing countries. Such practices harm the competitive landscape of financial markets, and often have long-term corrosive impacts on governance and human rights standards.”
One of the clear mechanisms to fight this is through going after the bad actors directly. To help in this component of the fight against corruption, the US government will work “to address deficiencies and decrease the ability of corrupt actors to launder the proceeds of their activities through global markets, we will also hold accountable those who choose to engage in corruption. As part of this effort, the U.S. Government will enforce existing rules using proven tools, while also working with the Congress on new authorities to take on the corruption challenge as it stands today.” It will do so through current tools as such the Foreign Corrupt Practices Act (FCPA) and other anti-corruption laws. Interestingly, the Department of Treasury is establishing a pilot Kleptocracy Assets Recovery Rewards program. This whistleblower initiative “will provide payments to individuals for information leading to the identification and recovery of stolen assets linked to foreign government corruption held” in domestic financial institutions. It is designed to complement the US Government’s other anti-kleptocracy efforts.
The criminalization of those receiving bribes is also a top priority. Here the US will attempt to enact a law to compliment the FCPA which criminalizes the supply side of bribery and corruption by enacting legislation to make illegal the demand side of corruption; i.e., those who receive bribe payments. There will also be an effort to increase more robust use of existing laws such as the Patriot Act to prevent money-laundering.
Under Pillar 3, the US will work with NGOs to deepen support “initiatives and networks that facilitate the exchange of information and enhance foreign partners’ capacity to pursue accountability at the transnational level, including to the OECD Working Group on Bribery Law Enforcement Officials” and others. In addition to the whistleblower initiatives, the Strategy also recognizes the critical roles of journalists and journalism in the fight against bribery and corruption. The Strategy states, the US “will boost its ongoing efforts to support, defend, and protect investigative journalists and other civil society and media actors on the front lines of the fight against corruption. In recognition of the critical role that private sector actors play in combating corruption, as well as of the economic leverage that the private sector brings to bear, the United States will seek to enlist the private sector as a full-fledged partner in the fight against corruption, stimulating business self-regulation, promoting anti-corruption compliance measures, and unleashing private sector advocacy for anti-corruption reform.”
In other words, expect to see many more articles along the lines of the Panama Papers, Pandora Papers and Paradise Papers and have the US government use that information to prosecute. Pillar 3 ends with a note about the sharing of information with private parties and actors. This means for the compliance community increased information will be coming from the US government to help bolster compliance programs.
Join us tomorrow where we pay honor to El Rey and consider Pillar 4 – Preserving and Strengthening the Multilateral Anti-Corruption Architecture.