Wal-Mart’s Victims, Part XVII: Using Civil Society

I’ve previously argued — following the DOJ’s lead — that the governments in developing countries are usually better understood as the co-conspirators in a bribery scheme than as the victims. So if we want to remedy the harms that resulted from particular bribes, we can’t go through them.

And unfortunately, nor can we look to the U.S. Congress at the moment to do anything bold and visionary. Rancor can hamstring a deliberative body as surely as corruption can. Shame that we need to talk that way, but it is what it is. 

To be truly innovative — to address immediate needs immediately — we need a solution that does not require Congressional authorization. Here’s one.

My proposed Supplemental Transparency Project (STP) would bypass developing countries’ governments by using civil society. We did this once before with great success in Kazakhstan; I’m merely proposing that we replicate the model. The DOJ and SEC could negotiate with a corporate defendant to dedicate a portion of the settlement monies to fund an NGO, as I’ll explain. And in relying on prosecutorial discretion rather than statutory amendment, we’ve found a workaround of US Congressional paralysis as well. If a suitable NGO already existed, we could use it; if not, we’d create one. 

This organization would need to be immersed and fluent in the local culture, but we’d also have to ensure its accountability. So we could structure it much like we structured the board of the BOTA Foundation in Kazakhstan; BOTA’s board included local academics and civic leaders, as well as officials from the U.S. and Switzerland. 

In the countries where bribery occurred, we could set up local organizations, subject to review by outside accountants, lawyers, or civic leaders. These local organizations could engage in the work that I began to describe in Part XVI — they could identify the specific harms that resulted from the bribery and oversee their remediation — environmental clean-up, building code retrofitting, and where the harm cannot be undone, perhaps directly compensating the victims.

But they could also do a lot more. In the next post, I’ll describe how the STP can be used to prevent future harms, build institutions, and level the proverbial playing field.

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 here, XVa here, XVb here, and XVI here.

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Andy Spalding is a senior editor of the FCPA Blog.