Search

Editors

Richard L. Cassin Publisher and Editor

Andy Spalding Senior Editor

Jessica Tillipman Senior Editor

Elizabeth K. Spahn Editor Emeritus

Cody Worthington Contributing Editor

Julie DiMauro Contributing Editor

Thomas Fox Contributing Editor

Marc Alain Bohn Contributing Editor

Bill Waite Contributing Editor

Shruti J. Shah Contributing Editor

Russell A. Stamets Contributing Editor

Richard Bistrong Contributing Editor 

Eric Carlson Contributing Editor

Bill Steinman Contributing Editor

Aarti Maharaj Contributing Editor


FCPA Blog Daily News

Entries in United Nations (70)

Monday
Apr252011

Respecting Human Rights Through Due Diligence

I’d like to elaborate on Jeff Kaplan’s post on March 31, which discussed the role of Compliance and Ethics Officers in enabling their companies to respect human rights.

Click to read more ...

Wednesday
Apr062011

More Countries Debate Antibribery Laws

Following the lead from China and Russia, both Indonesia and India are working on their own versions of the FCPA.

Click to read more ...

Thursday
Mar312011

Respecting Human Rights: The Role Of Compliance And Ethics Officers

On March 24, the United Nations published its Guiding Principles for Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework, which, as described in an accompanying press release, offers “for the first time an authoritative global standard for preventing and addressing the risk of adverse human rights impacts linked to business activity.”

Click to read more ...

Wednesday
Mar162011

Coming Soon: Russia's FCPA?

Assistant Attorney General Lanny Breuer of the DOJ's Criminal Division spoke today in Moscow at the 3rd Russia and Commonwealth of Independent States Summit on Anti-corruption.

Click to read more ...

Monday
Jan242011

Naaman Argues For 'Time Served'

Enough already. Ousama Naaman's lawyers say he's already spent just shy of a year in prison in Germany awaiting extradition, and another seven months under strict conditions of release in the U.S.

Click to read more ...

Wednesday
Nov242010

Yup, We're Still Thankful

America isn't always right. And the DOJ should answer some tough questions. But there's no doubt about America's unequaled contributions to global compliance.

Click to read more ...

Wednesday
Oct202010

Where Is Canada, Really?

Why is Canada's anti-bribery enforcement moving at a crawl? Cyndee Todgham Cherniak says the answer may be found not in the similarities between U.S. and Canadian enforcement, but in the differences.

Click to read more ...

Monday
Oct042010

Someone Tell The Lawyers

About half of the world's lawyers haven't heard of the FCPA. Seventy percent are unaware of the U.K. Bribery Act, and four in ten don't know about the OECD and U.N. anti-corruption conventions.

Click to read more ...

Wednesday
Jun162010

Saving Guatemala

Carlos Castresana Fernández ranks as an anti-corruption superhero. For two-and-a-half years, the Spaniard headed the International Commission against Impunity in Guatemala, or CICIG, a partnership between the U.N. and Guatemala's government. It was set up to reassert the rule of law in the country after 36 years of civil war. And it succeeded beyond anyone's expectations.

But last week Dr. Castresana resigned. The former Public Prosecutor of the Supreme Court of Spain and a specialist in white collar and drug-related prosecutions said he needed a break. No one blamed him. His job was always dangerous because he took it seriously. Even through his resignation he managed to remove another corrupt official. This time it was the new attorney general, whom he accused in his final hours in the job of being tied to organized crime. Within a few days, the country's Constitutional Court ordered the AG out of office, the first time any court in Guatemala had acted against such a high-ranking office holder.

During Castresana's tenure, according to U.N. reports, some 2,000 Guatemalan police officers, or 15 percent of the force, were fired for corruption. Because of lack of cooperation, a prior attorney general, 10 prosecutors and three supreme court justices had been dismissed. Through criminal prosecutions, 130 people were sent to jail, including a former president as well as former ministers of defence, finance and interior. 

Castresana drove the process but credited success to "reliable police officers and prosecutors and with the support of some 90 per cent of the population and civil society and the private sector."

Police and judicial corruption is a special kind of nightmare. It strips power away from honest citizens and hands it over, irrevocably, to their enemies. Once that happens the system is powerless to fix itself. Outside intervention is the only way. That's where Castresana came in.

Guatemala hasn't been the subject of FCPA enforcement actions so it's off the usual compliance radar. But the country's 13 million people have suffered under the burden of corruption for a long time. No doubt they're worried today as their superhero packs his bags. They should be.

On Friday, the Guatemalan Times carried this item: "Yesterday also, four decapitated heads were discovered in prominent places of the city. Messages where attached to the heads directed at the Ministry of the Interior and the prison system. The real intent of this gruesome display of violence can also be interpreted as a very clear statement of the dark forces that promote impunity in Guatemala, who felt empowered after Dr. Castresana resigned. The groups wanted to send an unequivocal message to the population, to the justice system and to the President of Guatemala."

Wednesday
Jun022010

The Obama Doctrine

In a policy shift that could lead to the international arrest and trial of kleptocrats, the White House last week said it views widespread corruption as a violation of basic human rights and is working to advance that view globally.

According to the administration's May 2010 National Security Strategy, the U.S. will "promote the recognition that pervasive corruption is a violation of basic human rights and a severe impediment to development and global security." Although the prior administration linked corruption to global and national security, viewing graft as a human-rights violation is a new position.

The administration said:

Strengthening International Norms Against Corruption: We are working within the broader international system, including the U.N., G-20, Organization for Economic Cooperation and Development (OECD), and the international financial institutions, to promote the recognition that pervasive corruption is a violation of basic human rights and a severe impediment to development and global security. We will work with governments and civil society organizations to bring greater transparency and accountability to government budgets, expenditures, and the assets of public officials. And we will institutionalize transparent practices in international aid flows, international banking and tax policy, and private sector engagement around natural resources to make it harder for officials to steal and to strengthen the efforts of citizens to hold their governments accountable.

The International Criminal Court in the Hague hasn't been used against kleptocrats. The Rome Statute that created the court extends to "crimes against humanity" but no one knows if that includes graft. Commentators, academics and activists have been pressing the case that grand corruption should be internationally outlawed. This is the first formal indication that President Obama, who may be frustrated that the FCPA doesn't reach corrupt foreign officials, could be putting his weight behind the idea as well.

There's a catch. As of today, the United States isn't one of the 108 State Parties to the Rome Statute. Under the Clinton administration, the U.S. joined the 60 countries that supported the founding of the International Criminal Court. But the Bush administration reversed that policy, citing risks to national sovereignty, and never signed the Rome Statute.

Download the May 2010 National Security Strategy here.

Special thanks to an astute reader in Washington for help with this post.

Friday
Jan222010

Another Military Equipment Exec Charged In Bribe Case

Representatives of the United Nations are "foreign officials" under the Foreign Corrupt Practices Act. The key intermediary identified as “Individual 1” in this week's historic bribery indictment of 22 people from the military and police-equipment industry has been charged with conspiracy (18 U.S.C. § 371).

In a one-count criminal information filed in federal court in the District of Columbia, the DOJ accused Richard T. Bistrong of conspiring with others to violate the Foreign Corrupt Practices Act's antibribery provisions, 15 U.S.C. §78dd-1, its books and records provisions, 15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(5) and 78ff(a), and the Commerce Department's export license rules, 50 U.S.C. §§ 1701-1706 and 15 C.F.R. §§ 736.2, 764.2, and 774. The information was released on Friday.

Bistrong was a vice president for international sales at Armor Holdings, a former publicly traded military equipment manufacturer in Jacksonville, Florida. Amor became a subsidiary of BAE Systems after the British firm acquired it in 2007.

According to a report in the New York Times Friday by Diana Henriques, John Suttle, senior vice president for corporate communications at BAE's U.S. unit, confirmed that Bistrong had worked at Armor Holdings but was fired before BAE's acquisition. He said Armor had self-disclosed to the DOJ and SEC and that "all of these events occurred before BAE bought the company."

The New York Times also said sources confirmed that Bistrong -- or “Individual 1” as he's referred to in the earlier indictments -- introduced undercover FBI agents to senior executives in the arms and security-equipment business.

Tuesday's indictment of 22 people, including four Israelis and three Britons, was the first big undercover sting used in connection with alleged violations of the Foreign Corrupt Practices Act. It was also the biggest mass indictment in FCPA history. An FBI undercover agent posed as a military-equipment buyer for an African country. He told the sellers they would have to pay 20% commissions to an African government official for the sales. "Individual 1," according to the indictments, played a key role by introducing the undercover FBI agent to the various sellers.

In its charges against Bistrong, the DOJ alleged that from 2001 through 2006, he and others concealed about $4.4 million in payments to agents and other intermediaries who helped Armor Products obtain business from "foreign government customers" in Nigeria and the Netherlands. Payments for sales to the United Nations for its mission in Iraq were also involved.

The DOJ said in the information that an official of a "public international organization" is a "foreign official" under the FCPA. 15 U.S.C. §§ 78dd-l(f)(l)(A) and 78dd-l(f)(I)(B). The United Nations is a "public international organization;" therefore its offcials are "foreign officials" under the FCPA. 22 U.S.C. § 288; Exec. Order No. 9698, 11 Fed. Reg. 1809 (Feb. 20,1946).

The information also alleged that in March 2004, Bistrong and another employee authorized the export from the U.S. to the United Arab Emirates for further shipping to Iraq of vests and helmets "without obtaining a required license from the Commerce Department to do so."

Download a copy of the information in U.S. v. Richard T. Bistrong here.

Special thanks to Marc Bohn in the District of Columbia for help with this post.

Thursday
Dec102009

The Real Price Of Petty Graft

Corruption may have been a cause of the night club fire last week in the Russian city of Perm that killed 113 people. Alexander Fridman, an entertainment producer there, told the Christian Science Monitor, “Fire inspectors found violations of the regulations a year ago, yet they didn’t come back to check whether corrections were made. Why was that? There were hundreds of people gathering at that club every night, yet they never closed it down. The basic lesson is that fire inspectors should not take bribes.”

Russia's red tape is terrible. The country ranked 182 out of 183 on the World Bank's 2010 Doing Business Index in the category of "Dealing with Construction Permits." It takes an average of 704 days to obtain the permits needed to build a warehouse in Russia; the OECD average is 157 days. Such extreme bureaucratic delays mean petty corruption is the only way to keep things moving.

The Christian Science Monitor said, "Amid Russia’s decaying infrastructure and often jury-rigged new construction, the potential for accidents [such as the nightclub fire] abound because laws are not enforced, experts say." A professor at Moscow's Institute of Architecture said most public buildings are hazards. “As long as we have this practice of paying bribes rather than making the needed improvements," he said, "nothing will change."

The story said 18,000 Russians die each year in fires, several times the rate in most developed countries. The U.S., with twice Russia's population, had 3,500 fire fatalities in 2008.

*   *   *

More on the indictment of Joel Esquenazi and Carlos Rodriguez (reported here). The two Florida residents were identified by the DOJ as the president and a former vice president respectively of "Company X." The company is Terra Telecommunications Corp., formed in Nevada on July 1, 1996 and domesticated in Florida in 2002. A copy of its Florida business registration can be downloaded here. Thanks to the U.S. readers who provided this information.

*   *   *

Women in Kabul marched against corruption. As reported by the LA Times and others, hundreds of women on Wednesday held a peaceful but noisy street protest. They want President Karzai to remove from his government anyone connected to corruption and the drug trade. "These women are being very brave," said the protest leader, her face hidden by a burka. "To be a woman in Afghanistan and an activist can mean death. We want justice for our loved ones!" The protest group called itself the Social Association of Afghan Justice Seekers. A spokesperson said "our people have gone into a nightmare of unbelieving" because of the disputed election and the fact that "the culture of impunity" still exists despite Karzai's vow to eliminate it.