Takeaways from the Inaugural FCPA Blog Conference: An international development practitioner’s perspective
Last week I had the honor of attending the inaugural FCPA Blog Conference held in New York as a scholarship recipient. I’ve written for the FCPA Blog with Alison Taylor of BSR, and I was excited to meet the crowd of fellow anti-corruption compliance enthusiasts!
I came to the conference with a slightly different perspective than most attendees as an international development practitioner. When Dick Cassin, Editor-in-Chief of the blog, asked who in the room were lawyers, then compliance officers, then journalist, this left myself and a few others as outliers. However, my background made for very interesting conversations during breaks, raising eyebrows and interest. For a number of compliance officers, having international development workers in the room was a reminder of corruption’s devastating impact.
A few of the main takeaways from the day were the challenge of enforcing the Foreign Corrupt Practices Act (FCPA), the challenges faced by compliance officers, and where the victims of corruption factor into compliance.
Cassin kicked the day off by praising the FCPA, its goal, and its impact. That said, the challenges of enforcing the FCPA came out speaker by speaker. Notably enforcing the FCPA has been a challenge, both in pursuing cases and the FCPA itself. Cassin flagged that only one publicly traded company has gone to trial under the FCPA. All other cases have been settlements. He argued this is due to companies feeling automatically liable in a case even if they do have a compliance system in place. In addition to this troubled starting point, the legal mechanisms to enforce the FCPA have not been fully adequate over time.
Turning to compliance officers, there were very interesting panels on examples of building up compliance programs and a fascinating conversation on just who do compliance officers work for? The title of the panel asked if they work for the company, the public, or the government. But speakers Thomas Fox and Michael Scher pivoted the conversation to suggest boards of directors should be far more involved in compliance and act as allies to Chief Compliance Officers. Scher further emphasized the challenge that compliance is in its infancy and CCOs in many cases are new entities, sometimes working against the gain for a company’s goals.
The challenges compliance officers face was emphasized to me when one compliance officer lamented frustrated reactions from sales reps in learning what they thought was standard practice — e.g. lavishing gifts on clients — was against a company’s rules. The compliance officer vented, “I’m not there to be the enemy, I’m there to help you. I’m there to keep you out of jail.” This point was brought up a number of times during the day, all leading to the need to reinforce and support the roles of compliance officers.
Finally, from my international development point of view, I was concerned at how little corruption’s impact on emerging markets appears to be considered. Cassin confirmed that initially in 1977 the FPCA was focused on the reputation of US business, not victims of corruption, but that this mentality is changing. To this end, he acknowledged a growing demand and willingness to reform the FCPA to address bribe takers as a measure to stem the root causes of corruption (for more on this reform and how it might work, see The Enough Project’s new report on US tools to address corruption ‘Bankrupting Kleptocracy: Financial tools to counter atrocities in Africa’s deadliest war zones’). But the perspective on victims may have been best summed up in a discussion between Cassin and Richard Bistrong on Richard’s experience being caught violating the FCPA. Dick asked Richard “Did it ever click with you that you were part of the problem of contributing to poverty”? Reflecting for a moment, Richard responded “You don’t see it. You fly business, go to nice hotels, and the local government makes some money. You justify bribery. It was a win-win. You become ethically numb.”
Based on the success of this year’s conference, I imagine next year it will grow and be even more impressive. I’d recommend expanding the diversity of voices next year by bringing in more people affected by compliance, particularly in emerging markets. It would be beneficial to learn what are their experiences and needs to integrate into global markets. After all, corruption is a systemic issue that needs to be addressed from a range of perspectives. I would also recommend three sessions. The first, have another group work session like Alan Spalding coordinated. The FCPA Blog pulled all these great minds and experience into the same room, let’s make the most of it. Second, let’s talk about how companies can work together to help influence markets to better fit with compliance so they are not just reacting to risk, but reducing the risk. Finally, open discussions about the challenges of implementing the FCPA were well received, especially Richard Bistrong’s session. I was talking to Richard during the post-conference reception and saw a number of attendees approach him to say how eye-opening his testimonial was.
Looking forward to next year!
