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Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

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

Facilitating Payments And The Reporting Dilemma

Compliance insider Pete from DC first appeared on this blog nearly five years ago.

We’re happy to report that he still drops by.

In response to yesterday’s Small (Bribe) Talk From The Editors, Pete sent this comment:

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Dear Editors:

Fascinating discussion, and I think Marc Alain Bohn’s point about transparent recording deserves a bit more attention, as it puts public companies (i.e., those subject to the books and records and internal controls provisions of the FCPA) in an awkward spot.

If they make a facilitation payment in a jurisdiction where that payment is illegal, but they record it accurately, they’re essentially creating evidence of a crime (unscrupulous tax inspectors love that kind of thing – they can then extort a larger bribe). If they fail to record accurately, the misrecording itself could be a books and records problem, if not also an internal controls problem. 

Some companies try to get away with recording accurately at a consolidated level (e.g., regionally) rather than locally, but there are a number of cases (Dow, Wabtec, Triton) where the regulators have prosecuted local misrecording of relatively small bribes under the books and records provisions, so that’s no solution either.


Pete from DC

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