As whistleblower protection continues to grow as an important part of the compliance landscape worldwide, companies should be prepared for the inevitable increase in incidents requiring investigation. This includes allegations of corruption and bribery, which can present significant challenges when raised through internal whistleblower channels.
Properly handling such allegations can be an important first step in limiting exposure to FCPA enforcement actions by accurately assessing violations in preparation for self-reporting.
Having whistleblower protocols in place that anticipate the possibility of an external investigation from the outset can help maintain the integrity of findings and minimize disruptions and potential reputational damage.
Implementing a preestablished company policy which determines the formation of a response team and describes the initial steps taken in response is invaluable. This can help avert critical mistakes in the early stages and lay the groundwork for a successful investigation. It is important for a response team to refrain from any overt inquiries or confrontations prior to a discreet initial assessment of the facts. In addition to making a preliminary assessment of the allegations, responders must also carefully evaluate additional reporting obligations presented by their regulatory environment.
During the initial stages, actions must be taken to ensure the preservation of relevant documents to establish a paper trail and to anticipate local regulations likely to apply. Documenting allegations and associated information in a time-stamped and verifiable format, such as email, should be considered at a minimum.
Prior to engaging with external investigators or tasking an internal investigation, a basic assessment of the whistleblower’s allegations must establish which matters can and should be subject to an investigation. Discretion is critical to any investigation, so identifying in advance which aspects of an allegation may be impossible to verify or which patently lack credibility, will help establish the appropriate scope of an investigation and mitigate unnecessary collateral damage.
Upon determining that the whistleblower allegations are minimally credible and potentially verifiable, a validation process must be established through the use of investigative resources in the form of in-house audit functions, or by external parties such as outside counsel or an investigations specialist. At times, all three may need to be engaged simultaneously.
Engaging with an investigations firm that understands the unique challenges and special considerations associated with a whistleblower response is important to achieving a positive outcome. Investigators with whistleblower response experience will know how to protect the integrity of the process by focusing the investigation on the validation of facts, without compromising the anonymity of whistleblowers or raising concerns about retaliation.
Experienced investigators will also understand how to investigate from the outside in to maintain a maximum degree of discretion and limit disruptions or refrain from causing reputational damage. Investigative tasks that can be carried out least conspicuously should be done first, with potentially disruptive inquiries being conducted only if and when they are fully justified and necessary. Such discretion is particularly important when considering that in some cases whistleblowers may be acting in bad faith and have an agenda of intentionally inflicting reputational damage on a colleague or the company as a whole.
Given the possibility of future litigation or regulatory action in bribery and corruption cases, an outside investigator must have a strong focus on the clean collection of evidence and testimony. Investigators should always be knowledgeable regarding local laws, which kinds of evidence or testimony are admissible in court, and what steps for preservation and documentation of evidence are required.
Any FCPA-relevant investigation is inherently an international matter. Choosing an investigator with global capabilities from the outset can help ensure a seamless investigation from one jurisdiction to the next as well as provide for an effective pivot to next investigative steps, such as extraterritorial asset tracing or litigation support, should the need arise.
Michael Olver, pictured above, is Managing Director of Pacific Strategies & Assessments, a global risk consulting firm offering Ethics & Compliance, Investigative, and Advisory services. He has been a corporate investigator for 14 years and has acted as an investigative responder on matters in Africa, the Middle East and Asia. He can be contacted here.