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Alexandra Wrage: Compliance and Enforcement Trends from the 2017 TRACE Forum

Last week, TRACE held its 13th Forum at the St. Regis Hotel in Washington, D.C. Over 100 member companies contributed to a lively and extended exchange of best practices across the two-day event.

Interestingly, for the first time, men and women were represented in exactly equal numbers, which increasingly reflects the trend in the compliance community.

Daniel Kahn, Chief of the Fraud Section’s FCPA Unit and Kara Brockmeyer, Chief of the  Fraud Section’s FCPA Unit at the SEC opened the event with a panel moderated by the always animated Chuck Duross of Morrison & Foerster. After a discussion of recent enforcement actions, the compliance portion of the discussion was notable for its references to practicality and common sense.

Kara, after the requisite government disclaimer, commented on the “tremendous increase in sophistication in compliance programs” that she has seen over the last ten years. She noted that companies are getting much better at operationalizing their programs, but urges companies to ensure that their anti-bribery programs are “linked to [their] internal financial controls as an accounting issue may be a symptom of a bigger problem.”

Kara also offered some comfort with her remark near the end that “we know you’re never going to get it right 100% of the time,” but added that -- if companies do come forward to report -- they should bear in mind that self-reporting and full cooperation go hand-in-hand. Companies that haven’t thought through the implications of full cooperation, should consider the disadvantages associated with reporting anything less than fulsomely.  “No partial disclosures.”

When asked about the new ISO anti-bribery standard, Daniel -- also after the usual disclaimer -- noted that “it may be helpful, but the DOJ will look at your program, not a proxy for your program.” Dan also emphasized that the DOJ wants evidence not only of a good program, but “evidence that what you’re doing is working."

Not surprisingly in light of Dan’s comment, there was a lot of discussion over the course of the Forum about how to test systems, including how to assess whether your training is working and how a company can manifest and measure “conduct from the top.”

Amanda DeBusk of Hughes Hubbard & Reed walked the group through an excellent update on sanctions against Iran and Russia. The topic is so timely and volatile that Amanda had to update the PowerPoint she had provided just two weeks earlier. With respect to Iran, with four waivers due to expire in the next three months, the situation isn’t likely to stabilize soon. Simple inaction by the current administration will reverse these commitments under the JCPOA.

Jeff Clark of Willkie Farr & Gallagher joined me for a panel to consider what the new administration might mean for U.S. anti-corruption efforts. A show of hands indicated that a majority of participants believe the pace of enforcement won’t change in either direction and there was general agreement that, given the highly experienced career prosecutors, current staffing levels and the existing pipeline, any shifts in policy will take a year or two to materialize.

The Forum concluded with a clear consensus that few companies are ready to start scaling back their compliance programs. This reluctance appears to be driven by the escalating risk of enforcement outside the United States, the arguments in favor of corporate social responsibility and the desire to safeguard corporate reputations regardless of enforcement levels.

In addition, the benefit of investing in strong internal controls not only for FCPA purposes, but also to prevent and detect other forms of corporate misconduct, strengthens the shared conviction that robust compliance programs should remain on course for now.


Alexandra Wrage is president and founder of TRACE. She is the author of Bribery and Extortion: Undermining Business, Governments and Security, co-editor of How to Pay a Bribe: Thinking Like a Criminal to Thwart Bribery Schemes, and the host of the training DVD Toxic Transactions: Bribery, Extortion and the High Price of Bad Business, produced by NBC. She's a former member of FIFA’s Independent Governance Committee and served on the 2015 B20 Taskforce on Anti-Corruption, which drafted recommendations to G20 leaders for consideration in their global economic policies. Prior to founding TRACE, she was international counsel at Northrop Grumman. She can be contacted here.

Reader Comments (1)

"Interestingly, for the first time, men and women were represented in exactly equal numbers, which increasingly reflects the trend in the compliance community." Is the trend towards women or men?
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