Innovative uses of anti-corruption laws to fight terrorists and tyrants and companies that help them is the subject of a breakthrough article published this week by the Wharton School of the University of Pennsylvania.
Terrorists rely on corruption and violence to subvert regimes, gain support, and create safe havens. As the article makes clear, Western and other governments are now responding not only with traditional tools — diplomacy, directed sanctions, and export controls — but also with far-reaching anti-corruption prosecutions. The targets are companies and individuals profiting through bribery of regimes and organizations that put the rest of us in danger.
We’ve talked about the links between corruption and terrorism. The 9/11 attacks helped reveal those links, and knowledge of them has since shaped U.S. and international anti-corruption strategies. But serious public discussion about the topic has been rare.
In the Wharton article the authors dive into an analysis of how anti-corruption enforcement is already working as a weapon against global terror, and where the battle should go.
Bringing the strategy down to a corporate level, authors David N. Lawrence, Jeremy Maltby, Stephen Labaton, Ronak D. Desai, and Matthew H. Lawrence say the clear and present danger posed by rogue nations, terrorist organizations, and global criminal enterprises requires corporations engaged in international commerce to continue to ensure that their anti-corruption controls are adequate.
We agree. But taking that message to Corporate America (or Corporate Europe, or beyond) hasn’t been easy.
In a talk to a compliance team from the oil and gas services industry a couple of years ago, we mentioned the connection between compliance and global security as a reason to expect more enforcement. The room turned glum and an associate general counsel asked without friendliness: ‘You’re saying if we’re not fully compliant, we’re supporting al-Qaeda?’
But the authors of the Wharton article are unflinching. They see enforcement of anti-corruption laws (and in response, corporate compliance) as an essential strategic weapon against threats to global security.
As real examples of FCPA enforcement activity aimed at countries that pose particular dangers, they cite:
- Statoil paying more than $20 million in fines for bribes to high-ranking Iranian officials.
- Tyco International paying more than $26 million in penalties for bribes subsidiaries paid to officials in Iran and Syria, among others.
- Total SA reportedly cooperating with authorities and setting aside about $500 million for a possible settlement of investigations of bribes allegedly paid to Iranian government officials.
The article closes with a thoughtful discussion about the way forward now that the world, as the authors put it, has arrived at a new ‘teachable moment’ for anti-corruption enforcement and compliance.
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It was written by:
David N. Lawrence, formerly the deputy chief of the criminal division and chief of the public corruption unit for the U.S. Attorney’s Office in the Southern District of New York, now associate general counsel and managing director at Goldman Sachs,
Jeremy Maltby, a partner with O’Melveny and Myers specializing in white-collar and regulatory matters,
Stephen Labaton, a former senior writer for the New York Times, now a partner at the strategic communications firm RLM Finnsbury,
Ronak D. Desai, an associate with O’Melveny and Myers, and
Matthew H. Lawrence, a graduate of Brown University now working in the communications industry.
A note says their views ‘are entirely their own and do not necessarily reflect the opinions of their current or former organizations.’
Full disclosure: the article cites the FCPA Blog as a source of relevant intelligence.
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‘Can Anti-Corruption Laws Help Combat Terrorists, Tyrants and Their Corporate Supporters?’ is available here.