TICE – Turkish Integrity Center of Excellence

The adage of only conducting an affair with someone with much more to lose might also be apposite advice for those indulging in or contemplating bribery. Fear of punishment ought to secure the discretion of complicit parties but there are always those who may find themselves with little to lose by seeking to take advantage of a formerly complicit party.

The consequent susceptibility to extortion by such a party and the subsequent paralyzing fear of disclosure is a little discussed aspect of bribery and illicit conduct. It’s a particularly insidious threat for it may influence future key personnel decisions and commercial relations but without leaving any paper trail or raising any recognizable compliance alarms.

The finding of the recent OECD Foreign Bribery Report, which only concerned foreign public official bribery cases, that 53% of reported cases had been authorized by senior corporate management does seem quite remarkable but may not fairly reflect the effect of contemporary compliance systems. Nonetheless, if extrapolated to the world of private commercial bribery, it would suggest a much greater risk of high level authorization of bribery and illicit conduct than might otherwise have been expected and involve individuals who perhaps will have more to lose than most.

Many instances already exist of bribery being disclosed by formerly complicit but latterly sacked and consequently resentful executives. Much less clear is how many complicit executives actually remain in positions on account of high level concerns of a bean spill or how many contracts continue to be awarded to parties for fear of revelation.

The involvement of complicit executives also carries with it hidden and serious consequences for future corporate governance and the conduct of commercial relations. Although whistleblowing may prove an increasingly effective deterrent against high level authorization of illicit conduct, it’s unclear whether compliance systems are equipped to reveal underlying and nefarious factors influencing personnel decisions and the awarding of contracts. Indeed, where high-level authorization of illicit conduct exists it is also legitimate to question the true efficacy of internal investigations where the authorizers of illicit conduct and the inquiry may be one and the same.

It might be expected that the mere threat of investigation, let alone trial and punishment, would now provide sufficient deterrence against those indulging in bribery — yet the cases keep rolling in. Perhaps on top of that formal deterrence should be a greater appreciation that the short-term advantages associated with bribery will be more than outweighed by the long term and potentially costly risk of securing continued non-disclosure. On top of that, greater vigilance may be required of behavior and decisions that may only be explicable by reference to past illicit conduct.



By Alistair Craig | Wednesday, January 7, 2015

Alistair Craig, a commercial barrister practicing in London, is a frequent contributor to the FCPA Blog.

See the original article at FCPABLOG

Launch of the OECD Foreign Bribery Report

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