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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

Wal-Mart’s Victims, Part XVIII: Using the STP to Expose Systemic Bribery

Let’s be honest: Wal-Mart did not introduce bribery to Mexico, or anywhere else. Systemic bribery is a pervasive problem, far greater than any single company or enforcement action. And make no mistake — the citizens of those countries generally will not justify this bribery on the basis of  their “culture.” They would like to see it cleaned up.

So would our corporations, actually. And so would our government.

Here’s how we can do our part. As Justice Brandeis once remarked, sunlight is the best of disinfectants. I explained in the prior post how the Supplemental Transparency Project (STP) can remedy past harms. But to prevent future harms, the pre-existing systemic bribery problems in developing countries need to be exposed.

The STP could provide that sunlight, in three specific ways:

1. Fund broader investigative reporting. How did the Wal-Mart case blow up? It was a New York Times exposé. But many other companies — both foreign and domestic — were bribing those governments before Wal-Mart, and are doing so right now. To really address the problem, we need more of the work that the NYT did, but not so narrowly focused on the big-name, already-controversial U.S. corporations. Part of the settlement monies could be used to fund further investigative reporting in the countries where the defendant paid the bribes. Show us how pervasive the problem is. And show us who else is engaged in it, so that public pressure may be brought to bear on them as well. It’s only fair — both to the citizens of other countries, and to our own corporations.

2. Issue a public report in the host country. In Deferred Prosecution and Non-Prosecution Agreements — those hallmarks of FCPA enforcement — the defendant admits the relevant facts. And these admissions become public. But the overseas victims probably see very little of them, other than some cursory media coverage. Why not repackage these factual reports and thoroughly publicize them in the host countries? It would accomplish two very important goals. First, it would look to the public like a formal apology, something that communities victimized by large-scale fraud (particularly by outside corporations) often desire. And that apology would only help the defendant corporation remake their reputation — of critical importance in the retail sector especially. Second, this report, if crafted very carefully, could help to expose the extent of the systemic problem in the host government. Explain how often the bribes were solicited, by how many governments and agencies, from how many corners. In administering the STP, the NGO could work with the defendant corporation (and its lawyers) to draft an appropriate public report, and then to manage its publication in suitable media outlets. Call it a truth and reconciliation report, if you will.

3. Sponsor transparency initiatives. Use a portion of the settlement proceeds to help promote the culture and practice of transparency. Go to the host country’s leading business schools and law schools and sponsor transparency workshops. Based on my own experiences, I can say with confidence that the students would absolutely eat this up. Provide local government training too. But none of this could be done by the US government itself — we could not claim, nor do we deserve, moral superiority. Get the NGO involved, with its combination of local and foreign civil society members and academics. They’ll know how to do it. 

Now tell me, wouldn’t this be better than just dumping a truckload of cash in the U.S. Treasury?

Let us count the ways in the next post.

Wal-Mart’s Victim’s Part I can be viewed here, II here, III here, IV here, V here, VI here , VII here, VIII here, IX here, X here, XI here, XII here, XIII here , XIV hereXVa here, XVb hereXVI here, and XVII here.


Andy Spalding is a senior editor of the FCPA Blog.

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