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« What is the S.W.A.M.P. Index telling us about state ethics agencies? | Main | DOJ reduces compliance role for monitors »
Monday
Oct152018

Too oppressed by corruption to talk about it

No wonder he doesn't want to talk about corruption. In his country, he told me, the military and police are corrupt. Crooked officials and bureaucrats make up the law. And prosecutors and judges are on the take.

He's from Africa and leads an important institution there. He has a plan to help transform a region of his country -- to bring jobs, more agriculture, better schools and health care, and a cleaner environment.

He's talking to people around the world about his plan. But he hardly mentions corruption. Bring it up and he tells you it's a terrible problem and a "dangerous" topic.

Plans to help people are good. But corruption ruins them. It's the “gateway crime,” as former U.S. Attorney General Eric Holder once said. It's the crime that allows other crimes to happen -- terrorism, gang violence, human trafficking, gun running, poaching, illegal logging, and so on.

So for anyone hoping to transform society, ignoring corruption never works. It's the first thing that has to be fixed, before anything good can happen.

At the UN, U.S. Ambassador Nikki Haley has urged colleagues to stop pretending corruption doesn't exist. During a debate in September about regional conflicts, she said: "[W]e fail to recognize the issue that is staring us in the face -- corruption."

"Nine out of the ten countries that Transparency International considers the most corrupt in the world are on the Security Council agenda. Nine out of ten," Haley said.

She continued,

In the most troubled countries in the world, corruption isn’t simply a part of the system. Corruption is the system. The governments in places like Venezuela and Iran don’t exist to serve their people and happen to do a little corruption on the side. They exist to serve their own interests and corruption is the means by which they do so.

Because corruption ruins everything it touches, the "head-in-the-sand approach is backwards," Haley said.

She was right. But people living under corrupt regimes know something else: If you've buried your head in the sand, at least you've still got your head.

What can the rest of us do? Are there ways we can encourage people in corrupt countries to speak up? Criticizing the silent ones won't help anyone. But can we find ways to support and protect them?

Your ideas about how to do that are welcome.

_____

Richard L. Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (2)

In the early 1990’s my friend Jeff Kaplan invited me to do ethics and compliance training with him, sponsored by the Department of Commerce, for visiting Russian executives following the fall of the Berlin Wall. Each two-day session saw great interest for a day and a half, followed by a late second-day malaise that would set in. One day I inquired why the change in attitude, and was told simply, “We loved everything you told us about what’s possible but, unfortunately, we must return now to a system that is impossibly corrupt.”

A decade ago I went to Lagos Nigeria at the request of my beloved sister, Olajobi Makinwa, the leader of anti-corruption initiatives for the United Nations Global Compact, to establish a network of ethics and compliance officers. While there I met with some 100 ethics, compliance, and legal executives, giving them a global perspective on ethical issues, ways to combat malfeasance, and encouraged them to work together, share best practices, and address the very serious issues of corruption in their country. Encouraged by the possibility, but also concerned by an overwhelmingly corrupt environment in which they lived and worked, they kept asking how they could make a difference. I told them before I left: “This much I know -- if you do form an organization, it will take one to two generations to seriously impact corruption in Nigeria. If you don’t commit here and now, however, nothing will ever change. You owe it to your children and grandchildren to start now.” Following my remarks, Mr. Frank Nweke, President of the Nigerian Economic Summit Group (whose members were comprised of large cap companies in the country), offered to support such a membership organization, and to encourage the CEOs among his members to fully support the development of ethics and compliance initiatives.

When I returned to the airport for my return flight from Lagos I noticed a sign in the terminal prominently displayed, “Bribery is not permitted in this airport.” It reminded me of a sign displayed at my hotel there, which read: “Money laundering will not be tolerated at this hotel.” Soon after entering the terminal, I approached the customs guard near the gate and quickly noticed two of his colleagues turning their backs and walking away. I sensed I was about to be hit up for a bribe just to board the plane. The agent asked for my passport, and I complied. As he flipped through the pages of my visa he asked the purpose of my trip, to which I promptly reported, “I am with the UN to establish anti-corruption initiatives.” Without even looking up at me, he asked me to repeat myself, which I did verbatim. Next, I saw his head rise slowly with a huge smile on his face, and then he said, “Did anyone stay to listen to you?” I boarded immediately thereafter, and sighed in relief when our aircraft went wheels up, mindful of the enormous challenges these fine ethics practitioners faced.

I have also spent considerable time in Southeast Asia over the years. During one of my Asian visits, my friends at PLDT (Philippine Long Distance Telephone), attorneys Blue Festin and Elmer Nitura, asked for me to stop by Manila for a meeting. At this meeting, attended by nine executives, they said they were inspired to start a membership organization for ethics, compliance and governance experts. I immediately offered my support, and some months later the Good Governance Advocates and Practitioners of the Philippines (GGAPP), a membership organization for ethics, compliance and governance practitioners was born. Once chartered, I was invited the following year to return to the Philippines and be the keynote speaker at the induction ceremony of their officers and directors. The organization since has grown considerably, wherein members share best practices, and bring subject matter experts to conferences and other events.

During my many visits to the Philippines, I worked closely with the Institute of Corporate Directors, and supported their taking the lead in creating a rating methodology for governance standards among large publicly traded corporations. This initiative enjoyed the support of the Philippine Securities and Exchange Commission, the President of the Philippine Stock Exchange, and the Institute of Internal Auditors. I also spent considerable time with numerous CEOs and other corporate leaders who were committed to build strong businesses on a foundation of ethics and integrity. During my visits I enjoyed the privilege of speaking on numerous occasions with many companies, and with over 250 directors of public corporations there. As a result of numerous private sector actions, along with significant government involvement in addressing public sector malfeasance, the Philippines enjoyed a period of large capital inflows, investment grade ratings for the first time, leading to GDP growth in excess of 8% under the leadership of then President Benigno Aquino. The country had also received high praise for their efforts to reduce corruption under Aquino’s leadership, and saw their ranking on Transparency International’s corruption index drop dramatically, from 141 in 2008 to 95 in 2015. It is a prime example of what’s possible when business and government work together against malfeasance and social ills.

I have long said that ethics is about progress, not perfection. In my life I have witnessed progress, which often comes too slowly, and sometimes experiences setbacks. In the mid-1970’s over 400 companies admitted to the SEC to making illegal or questionable payments. This led to the passage of the Foreign Corrupt Practices Act in 1977, making the U.S. to be the first country to criminalize bribes to government officials. In the mid-1980’s a major government contractor procurement scandal led to the creation of a self-regulatory body, the Defense Industry Initiative. The Wall Street perp walks in the late 1980’s turned the attention of the U.S. Sentencing Commission to crimes in the workplace, which led to Chapter 8 regarding “Sentencing of Corporations. Chapter 8 creatively incented corporations to embed an effective ethics and compliance program, and spelled out the elements of such program. Effectively, Chapter 8 gave birth to a profession, which has grown dramatically since. When the tech bubble burst in 2001, it exposed widespread issues of malfeasance. This led to the passage of the Sarbanes Oxley Act (SOX) in 2002, which gave laser focus to “tone at the top,” and responsibilities therein. In 2003, the Thompson memo called attention to the essential importance of organizational culture. In 2009 in Doha Qatar, the UN Convention Against Corruption convened, and 150 nations agreed not only to have laws against bribery and corruption, but also to hold each other accountable for enforcement. This also opened significant cross border cooperation between enforcement authorities, which was previously non-existent. Following the Great Recession, we saw the passage of Dodd-Frank in 2010, which among other things, provided for a whistleblower bounty program. To date there have been over 20,000 referrals to the SEC. That same year, the Bribery Act was passed in the U.K., thus expanding the focus on bribery. Numerous other nations have since advanced laws and enforcement thereto against bribery and corruption. In 2010, the OECD issued its “Good Practice Guidance,” which provided guidelines for its member nations for internal controls, drawing heavily on the Federal Sentencing Guidelines, and thus establishing a global expectation of enforcement authorities. Also beginning in 2010 the G-20 established corruption as an annual agenda item in their deliberations. Increasingly, transparency befriends those focused on addressing issues of corruption. In a transparent world, there are no secrets, there’s no place to hide.

Despite much progress, there are many places in the world that remain impossibly corrupt from military, to police, prosecutors and judges, and where no one is held accountable. I have long said that wherever there is money there is the potential for corruption. And wherever there is a lot of money, there is the potential for a lot of corruption. Governments, public infrastructure projects, major public events (World Cup, Olympics, national elections, etc.) are combustible opportunities for corruption, even here at home. Addressing it, whether in our corporations, countries, or across regions, will take a village, all of us working together, despite constant reminders of the extreme difficulties to evidence short-term progress. As my friend Yan Tougas reminds me, “We all have a responsibility to see the injustices around us, and to work toward its elimination, even if we never enjoy the fruits of our labor. We are not obligated to complete the work, but neither are we free to evade it” (ref. Rabbi Tarfon). Ethics and compliance professionals provide moral leadership in our respective organizations. Working together, I believe we can bend the moral arc of the universe toward justice (Theodore Parker), one step and one day at a time, however long the task.
October 16, 2018 | Unregistered CommenterKeith Darcy
Whistleblowers’ anonymity must be protected.
October 16, 2018 | Unregistered CommenterThomas Welch

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