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Harry Cassin
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Richard L. Cassin
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Thomas Fox
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Eric Carlson
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Newco to investors: Corrupt competitors might eat our lunch

Trinity Industries, best known for making railroad cars, is spinning off part of its infrastructure business into a new public company called Arcosa.

A registration statement for shares in the new company filed with the SEC warned investors about corruption risks in an unusual way.

Dallas-based Arcosa said,

[A]nti-bribery and anti-corruption laws may conflict with some local customs and practices in foreign jurisdictions.

Then it said,

As a result of our policy to comply with the FCPA and similar anti-bribery laws, we may be at a competitive disadvantage to competitors that are not subject to, or do not comply with, such laws.

Arcosa didn’t name the “jurisdictions” where local practices may conflict with the FCPA and other anti-corruption laws. Too bad. Naming and shaming corrupt regimes can be a step toward cleaning them up or pushing them out.

Nor did Arcosa say what “local practices” it was talking about. Supporting certain families? Gift giving? Content requirements? Nominated subcontractors? Outright bribery? Again, too bad Arcosa wasn’t bold enough to tell investors what really goes on in some of its markets. Exposing the behavior could help end it.

And who are Arcosa’s “competitors” who don’t comply with anti-bribery laws? Are they Chinese companies? Or Russian? Or, who knows . . . . Canadian? If Arcosa had named names, the rest of the world could help keep an eye on them.

To be fair, no one really expects for-profit companies to say things guaranteed to upset a lot of potential customers. Businesses don’t succeed by making themselves unwelcome in Africa, Asia, the Middle East, Latin America, Central Europe. . . . . . and so on.

That’s why we need NGOs like Transparency International and Global Witness. And why organizations that measure and publish anti-corruption efforts by governments, like UNODC and the OECD, are essential.

But if our big public companies — even just a few of them to start with — could be open and honest about the corruption risks they know about and face every day, the world would be a lot cleaner place.


Richard L. Cassin is the publisher and editor of the FCPA Blog.

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