Joe Murphy: Here's why outlawing grease payments may mean very little
Wednesday, October 14, 2015 at 10:08AM
Joe Murphy in Bribery Act, Facilitating Payments

Andy Spalding asked in a post on the FCPA Blog why countries that allow facilitating payments seem to have lower levels of corruption? He didn't find a definitive answer. But I want to offer my own explanation of why countries that permit facilitating payments might have a better record than those that do not.

To me it is simple: It is easy to prohibit everything, when you intend to enforce nothing.

Countries that took a “holier than thou” approach and banned all kinds of things felt free to do so because they intended to be completely hypocritical and do no enforcement. It is easier to enact laws that look great than it is to actually take real steps to enforce any form of anti-bribery laws.

The U.S., which has taken enforcement seriously, limited the prohibition to things it could and would actually handle. I would be happy to see the FCPA law expanded, although I believe the DOJ’s interpretations of existing law probably extend far enough to handle bad cases otherwise thought to be facilitating payments cases.

Note, too, that even countries that supposedly prohibit facilitation payments and sincerely mean it (if there are any) are not likely to take on many, if any, such cases, because enforcement resources have to be devoted to where they are needed the most.

I fully agree that facilitating payments are wrong and are corrupt. But faced with a decision whether to pursue some working person who paid $10 to an appointments secretary to arrange a meeting (of course, the facilitating payments exception only applies when the inducement is not to do something illegal), and going after an executive who wired $2 million to a government minister to win a contract, I know where I want the effort focused. Thus, if there is a big foreign bribery case under the UK Bribery Act, I do not expect it to be about facilitating payments.

I believe this point solves the mystery, and makes the results fully consistent.

______

Joe Murphy is a Certified Compliance and Ethics Professional and author of 501 Ideas for Your Compliance and Ethics Program: Lessons from 30 Years of Practice (SCCE; 2008). He was co-founder and vice-chairman of the board of Integrity Interactive Corporation (now part of SAI Global). He serves on the board of the Society of Corporate Compliance and Ethics (SCCE). He can be contacted here.

Article originally appeared on The FCPA Blog (http://www.fcpablog.com/).
See website for complete article licensing information.