The FCPA Hyper-Transparency, and Doing the Right Thing

How do you see the FCPA Blog’s role in the anti-corruption and compliance arena, and has this changed since you founded the blog in 2007?

Our mission is the same today as it was in 2007 – to help anti-corruption professionals and others everywhere understand how corruption happens, what it does to people and institutions, and how anti-corruption laws and compliance programmes work.

As you know, the FCPA is both a regulatory and a criminal statute. Originally, most of the lawyers dealing with it were not criminal lawyers, they were corporate lawyers. So they were very nervous and uncomfortable talking about it.

Therefore we aimed to start an open discussion and dialogue, in plain English and in a more familiar and easy way to understand. The subject matter is expanding; we call it the FCPA Blog but we write about most aspects of white collar crime. We try to publish posts that are clear and concise, and written in an informal way. We don’t want readers to struggle with the material. We know how busy everyone is.
We also strive to present as many points of view as possible. I see the blog as a community bulletin board for the compliance community. So far, we’ve published posts by about 450 different authors representing all facets of the anti-corruption community. That’s the greatest strength of the FCPA Blog.

Being editor-in-chief of the FCPA Blog must keep you very busy. What do you see as the main challenge in this role?

The FCPA Blog has always been a team effort and I’m fortunate to be part of that team. I love the work and look forward to it every day.

I spend most of my time working with our authors, an incredibly hardworking and generous group. The main challenge is definitely working with the guest authors and outside contributors and the board of editors. It’s a team effort and it’s a big team. At any one time we have about 50 active authors who I work with; my job is to help them with the writing process.

I also spend time encouraging others to write for the FCPA Blog. It takes a lot of courage to be a public author. You’re exposing yourself and your ideas. So whenever I can help a new author, that’s what I want to do.

A lot of readers contact me, sometimes with questions, often with kind words about the FCPA Blog. I try to answer everyone.

What do you see as the upcoming hot topics in the field of corruption based on your experience as publisher and editor-in-chief of the FCPA Blog?

We’re now entering the era of global enforcement. In the past, it was just the FCPA. Today dozens of countries have strong foreign bribery laws, and enforcement is a world-wide phenomenon. That’s the biggest and most important development in our field, and that’s the change that’s having the most impact on companies, compliance officers, and enforcement professionals.

Most of the big issues that lawyers and compliance professionals are dealing with are caused by the expansion of the enforcement. How do you deal with multiplicity of enforcement actions? What about raised judicata and double jeopardy? What is the definition of full cooperation in the UK, the US, France, Germany, and Austria? Nobody knows the answers; it’s all being worked out.

Countries are developing different prosecution agreements and regimes to try to deal with it. Nobody wants to kill the companies on the first offence so enforcement agencies are trying to work out how this is going to fit together. There’s never going to be a perfect solution because there are so many competing interests, national sovereignty being the big one, and nobody is going to give that up, but that’s the hard part and the fun part at this point.

The prosecution of government officials for corruption is also a major trend. It’s happening more often now, and in more countries. Even heads of state are no longer immune. And their property, no matter where it’s located, is at risk.

Hyper-transparency and accountability are also characteristics of our age. Hyper-transparency is a phrase coined in an article on the FCPA blog by Alison Taylor and James Cohen and they were just exploring what it means now to have information flowing in such a free and unrestricted and unrestrained manner.

Think wikileaks, the Panama Papers, even YouTube. Keeping corporate ownership a secret is harder than ever. Moving illicit money now attracts the attention of bankers, enforcement agencies, journalists, and NGOs. Transparency in public contracting is becoming the new normal.
All this is great news. For anyone interested in enforcement and compliance, we’re living in the best of times (so far).

Do you see any drawbacks to an era of hyper-transparency?

It’s an era of adjustment. Decisions are going to be made differently in corporations. The private discussions are not going to be private anymore, and decisions will have to be made in a much more open way. They are going to have to be weighed as though they were already out in public. It’s almost a politicization of the corporate decision-making process.

Also there’s more exposure to civil actions where the causes of action are wider than in criminal law, the standard of proof is lower, there are more victims that can come forward because companies, whatever they do is going to become known. I started to see that early on with the car manufacturers: there were memos about giving up certain safety features in exchange for more profit, like seat belts or bumpers. And then it all became public and suddenly people say that that’s not a proper basis to make decisions.

How could you ever be opposed to that? But then again, companies have to make a profit, and now they have to find a slightly different way to do it. It’s not something that companies can ignore and it’s never going to go back to the way it was. It’s only going to continue to get more and more transparent, so everybody is going to have to adjust. The image of corporate decision-making with a bunch of old people sitting in a boardroom making a decision that is purely profit driven is not going to work anymore.

Do you have any predictions about the use of big data, blockchain, and artificial intelligence in the field of anti-corruption and compliance?

Everybody is talking about it, and no one has quite found a use for it, but something will emerge. It’s going to be important in making predictions and uncovering money flow patterns and behaviour patterns.

New technology is already being used with some success, for example they can carry out lookback analysis of communication patterns through emails and find relationships that have too much prominence. This has been used to compile evidence that has been turned over to enforcement agencies.

Blockchain already has a big role in money-laundering and in international bribery and there’s a real conflict with the privacy issues there and gathering the evidence. I’m encouraging people to write about technology, artificial intelligence, and blockchain and our posts from guests who are real experts in the field are popular.

But it’s still in a way a solution in search of a problem. It’s a funny time we’re in, this technological transition, because the people developing the technology, the technicians/ engineers may not have a complete picture of the compliance function or the enforcement function or the way corruption works. Their technology is being brought together with compliance professionals and enforcement agencies so we’re in that sort of developmental phase.

In the context of one of your recent articles published on the FCPA Blog (“Is this compliance idea as bad as it sounds?”, FCPA Blog, 06.04.2018) , does the fact of having clear and comprehensive anti-corruption policies guarantee that a company is doing the “right thing”, and what could be other signs which would make you think that a company is complying with ethical business standards?

There’s the positioning of the compliance professional within the company – literally – where do they sit? Who does the chief compliance officer report to? Is there direct access to the board or its audit committee? Where is the CCO’s office? Is it in or near the C-suite, or far from it? Is the compliance function well-funded or short of resources? Are they overworked? Is compliance really given the prominence within the company that it should have to be effective? And these are all the questions that literally go back to the beginning of the enforcement era that we’re in.

Does the company have a true commitment to anti-corruption training that works? Is the training engaging, or is it repetitive and boring? Who’s being trained? How often? Training comes in all sizes and shapes: there’s effective training and then there’s training that’s dry, repetitive, and boring, that is perhaps intended to check boxes. The answers to these and similar questions are the best way to gauge a company’s commitment to compliance.

Clear and comprehensive anti-corruption policies, procedures, and codes of ethics and behaviour are a good and proper foundation. But that’s just the starting point – they’re the first step and not the final flag.

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