Many initial discussions of the FCPA with the leadership of U.S. colleges and universities (Schools) begin with something like the following:
- we would never engage in corruption such as bribery
- we are not-for-profit and do not need to consider unethical activity
- we are not that international, other than having a few foreign students, and
- we are among the most heavily regulated and scrutinized activities and do not need more policies and procedures.
Unfortunately, this initial approach is shortsighted and, happily, can be corrected.
While outright bribery is seldom encountered in the academic arena, and there are few if any FCPA investigations or settlements, there are some problem areas. First, there is not much FCPA knowledge among School leaders. Gifts and hospitality can be a big problem in the academic field. How many Schools have policies with respect to limits on gift giving or procedures in place for obtaining advice on what might be appropriate? How much of a problem area might be paying the travel and admission of a foreign college dean to a major conference, where the U.S. School is trying to get a permission for a joint program with the dean’s college.
In many cultures, it is to be expected that a person with approval authority would feel comfortable noting that he or she has a friend or relative who would benefit greatly from admission to a U.S. School. Outside the U.S., many School officials are state employees (probably everyone in China, for example) and thus qualify as “foreign officials” for FCPA purposes. Non-profit status is irrelevant.
A surprising number of primarily domestic Schools find themselves in discussions with foreign peer institutions in a simple effort to keep current or to have a semester overseas opportunity, all of which will create encounters with foreign ministries of education or foreign counterparts. How many excellent U.S. Schools have never even thought about the need for an ethics policy?
With respect to an ethics policy, as FCPA compliance has evolved, a basic FCPA compliance posture should start with a “top down” ethics policy, if for no other reason that the DOJ tells us it expects one in A Resource Guide to the Foreign Corrupt Practices Act and the Sentencing Guidelines. Mistakes are going to be made and a School will want to have a proper defensive structure already in place. The basics would also include an FCPA training program under which information is disseminated to those with a need to know.
It does not have to be a big deal, but the people involved have to be told the rules and have a source for having questions answered and getting advice and approvals. A tip line or something similar should probably be included among the “basics.” Finally, someone, such as the School counsel, must be placed in charge of FCPA matters.
Although there are a substantial number of Schools with good FCPA policies and procedures already in place, there are plenty of highly regarded and well-run Schools that have not addressed these issues or have not made their limited and already stressed compliance resources available in the FCPA area.
Schools should not overlook the possibility of FCPA compliance issues and need to deploy resources in order to have at least the basics in place, so that, if a problem arises, the School will have something to say in its defense.
Benjamin P. Fishburne, III is a solo practitioner who has been a partner in two major international law firms, having established the Hong Kong office for one and headed the existing Hong Kong office for the other. He is an occasional contributor to the FCPA Blog and can be reached at [email protected]