Richard Bistrong: My friend, the agent, blackmailed me

This week I’m traveling to the Middle East for the first time in ten years. It’s a welcome return to a region where I spent a lot of time, and where I enjoyed dealing with agents and end users. Those agents were hard working, sophisticated in their knowledge of the market, and overall uniformly polite.

But there was often a dark side to these relationships, even when they had very innocent origins.

In 2002, on a business trip to the region, I had an open weekend between two weeks of sales visits. One of the agents I retained on behalf of my company knew I would be alone for the weekend, so he invited me to spend the weekend with him, his wife, and some of their friends at a beautiful local seaside resort.

I didn’t see anything corrupt or inappropriate about the offer. But he was clear that I would be his guest, which I knew meant that upon checkout, he would be settling my bill.

We had a lovely weekend —  it was great to get to know him better during the early stages of our work, and his wife and friends were absolutely wonderful. Yes, we talked business, but not deeply. Over the next year our work together grew and we both enjoyed the success of our relationship.

About two years after that first pleasant weekend, on an existing contract where an annual price increase was allowed, the agent asked if he could increase his price to the end user, but with the company holding our prices to him, thereby giving him the full benefit of the increase.

I ok’d the new arrangement, thinking it would deepen our business relationship and build momentum for more growth going forward. I didn’t call management and relay his request, to see what they thought of the proposition of reducing corporate profitability in the interest of customer engagement. Maybe they would have allowed it, or perhaps even a compromise might have been made. But my thinking was that as long as I was not personally benefiting, it was all ok.

At that moment, I had taken compliance and ethics into my own hands. I had also subtly shifted my allegiance away from my company and toward the agent.

Another year passed and we faced similar circumstances under a different contract. The agent again wanted to increase the price to the end user but have the company hold its pricing to him. By now our business relationship was extremely productive and our personal friendship was warm and deep, or so I believed. This time his request for the price change came with an incentive — “putting a little something aside for me.” As I moved from unethical to illegal conduct, I wasn’t thinking about calling HQ for guidance.

Shortly after that, the agent had a dispute with his partner and they agreed to part ways, with each forming their own consultancies. Each also wanted to keep the agency agreement with my company. They were both well connected and capable of continuing to grow the business. And both threatened me as to what would happen if I chose the other.  They would blow the whistle on my unethical and illegal behavior to my employer, and make sure I would never set foot in their country again.

It was a bitter lesson for me. I had set the stage for trouble by not staying conflict free. I made myself vulnerable to being compromised, or worse, blackmailed. I had also turned my back on my company. So when trouble came, as it inevitably does, there was no one to cover my back and help me unpack this peril. I still remember being overseas on holiday with my family and toggling between text messages from each of the agents, with a barrage of threats and intimidation.

I had abandoned my proper role of ambassador for my employer. In that role I could also have been polite and social with intermediaries without accepting an extravagant weekend or other unnecessary social entanglements. Most importantly, I could still have delivered customer value. Products and services backed by a knowledgeable, committed, and well-trained workforce are where value resides, as I now see first hand when I speak at corporate sales conferences.

What happened after the two agents threatened to blackmail me? I never had to make a choice. By then I was already targeted by the Justice Department.

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Richard Bistrong , pictured above, is a contributing editor of the FCPA Blog and CEO of Front-Line Anti-Bribery LLC. In 2010 he pleaded guilty to a conspiracy to violate the FCPA and served fourteen-and-a-half months at a U.S. federal prison camp. He was named to Compliance Week’s list of Top Minds in 2017 and was one of Ethisphere’s 100 Most Influential in Business Ethics in 2015. 

His popular real-life compliance training video, Behind the Bribe, produced in cooperation with Mastercard, was released in June.

To request a demo of the full eleven-minute video or a licensing fee schedule, please click here.