The world has now lived with the FCPA for more than 40 years and with hyper-enforcement for more than a decade. By now you’d think everyone on earth has learned about the risks of non-compliance. So why are new companies, most lately MTS, still landing on the FCPA Blog’s Top Ten List?
Despite the best efforts of the DOJ and many others to spread the word about the FCPA, there are still some dark corners where the old attitude toward bribery lives on. It’s the attitude that says, “Good compliance means not getting caught.”
In the early days of the FCPA you heard plenty of executives say they didn’t accept the premise of the FCPA, as though they had a choice about it. For the next 25 years, they clung to the old excuses for paying bribes — “It’s the local culture” “It’s how this industry has always worked” “No one is getting hurt” “We can’t be the only ones not paying bribes” and so on.
In the energy sector where I worked, more than a few executives led their companies into FCPA disasters. The FCPA Blog’s Top Ten List from November 2010 included eight companies connected more or less to the energy business — Siemens, KBR, Snamprogetti, Technip, Panalpina, ABB, Pride, and Shell.
The cycle of bribery, detection, prosecution, and remediation has now run through most of the older sectors. After energy, the pharmas had their day, then financial services, and now, it seems, the European telecoms.
The idea from the 1980s that good compliance means not getting caught was always a blockhead strategy. It perverted large swathes of the world economy and damaged great companies and careers. And it was bound to fail.
Giant bribes can’t be hidden forever. At MTS, how many people knew the company was paying Gulnara Karimova more than $400 million for doing nothing? Probably scores, or even hundreds. The Uzbekistan caper must have been one of the worst kept secrets in the business world.
And yet MTS kept paying Karimova from 2006 until 2012. That can only mean the attitude inside the company toward compliance was a throwback to the 1980s: “Don’t get caught.” Ditto at VimpelCom and Telia, two other European telecoms that have each now admitted paying Karimova nine-figure bribes.
Bribery will always happen. Some people will give in to the temptation to cheat. But is the era of systemic, company-sponsored graft finally ending? Maybe. We’ll know for sure when new companies stop landing on the FCPA Blog’s Top Ten List.
Richard L. Cassin, pictured above, is editor at large of the FCPA Blog.