Sometimes a hero can make a difference. But you do not have to be a John Wayne type-hero to make such a difference. The reason is the world is made up of real people and John Wayne heroes only exist in the movies. Even in the international fight against bribery and corruption, the stand of one person can make a difference. It could be as simple as saying “I am not going to pay bribes.” Yesterday I read two articles in the New York Times (NYT) which illustrate how regular people and their non-Hollywood regular actions can make a difference in the fight against corruption.
Earlier this week, a true hero died near Brussels. According to her NYT Obituary, Augusta Chiwy was a “Belgian nurse whose unsung bravery in saving countless American soldiers wounded in the Battle of the Bulge was belatedly celebrated in 2011.” A British historian named Martin King had found the amazing story of a Belgian immigrant, who was visiting her family in Bastogne when the Germans attacked in December 1944, an Army doctor named John Prior, “knocked on the door of her father’s house. “He told me that he had no one left, that his ambulance driver had been killed,” she recalled. She volunteered, along with a friend, Renee Lemaire, even trading her bloodstained clothes for an Army uniform, which would have subjected her to death if she were captured.”
Yet through her efforts, along with those of her friend Ms. Lemaire and those of Dr. Prior who all working on triage during the entire siege, “Men lived and families were reunited due to your efforts,” said Col. Joseph McGee, who commanded a brigade of the 101st Airborne Division at Fort Campbell, Ky., the unit whose paratroopers were surrounded during the fierce midwinter siege.” Dr. Prior noted, in a 1972 article for The Onondaga County Medical Society Bulletin, “The presence of these two girls was a morale factor of the highest order.” Chiwy’s only comment was “What I did was very normal. I would have done it for anyone. We are all children of God.” Heroism indeed.
Yet there is another kind of heroism also portrayed in yesterday’s NYT. It was the heroism of the citizens of Guatemala as detailed in an article by Azam Ahmed, entitled “Guatemala’s Corruption Investigations Make Swift Strides”. The heroism was demonstrated by “Jorge Castiglione, a 70-year-old engineer with a thinning ponytail, has gone to the Plaza de la Constitución here to support what has become a ritual in this nation: weekly protests calling for the resignation of the president and an end to political impunity.”
For while no one, certainly not the citizens of the country, thought that they could see the possible end of corruption, a small step was taken in the name of anti-corruption last week when an investigation extended to the top levels of the country’s government. Ahmed reported, “On Friday, the nation’s former vice president was arrested, and prosecutors claimed that the president, Otto Pérez Molina, was the chief beneficiary of a fraud ring that siphoned millions of dollars in customs revenues while basic public services suffered.”
Most interestingly the investigation began over a case which, under US law, might well have fallen within the rubric of facilitation payments under the Foreign Corrupt Practices Act (FCPA). Ahmed said, “The initial case, known as La Línea, involved customs stations across the country taking bribes from importers to reduce the amount of duties paid. More than 20 top officials were arrested in a scheme that prosecutors said drew in a quarter of a million dollars a week, the same scheme they accuse Mr. Pérez Molina of leading.” However that was only the beginning of the rotten leaves unturned in the investigation. Ahmed wrote, “another scandal emerged. This time, the authorities were accused of skimming millions off a contract meant to provide dialysis treatment for patients with kidney problems, among other things. Local papers reported that more than 13 patients died as a result of negligent treatment, connecting the corruption to actual lives.”
There are many in the US, from The Donald on down, who seem to think that corruption is simply a part of the way those people do business. The problem with that analysis is at least twofold. First it does not even consider the invidious nature of corruption. This view holds that it is really just a victimless crime or better yet, simply another way to get ahead – cheat your way to the top. Or the converse, only losers don’t pay bribes to get favors in return. The second problem is that if US companies buy into such logic, they not only feed the narrative but become part of the problem as well. Just think of the Lockheed and other US corporate corruption scandals that led to the original passage of the FCPA.
Nonetheless for US companies these developments in Guatemala should serve as a very large wake-up call for their Central and South American operations, if, indeed, they needed one. Obviously Petrobras is on everyone’s mind now as the world’s current top poster child for bribery and corruption. For US companies, this means that their Brazilian operations could come into Department of Justice (DOJ) and Securities and Exchange Commission (SEC) scrutiny. The increased in anti-corruption scrutiny has moved part and parcel with increased political activism by citizens such as Jorge Castiglione in Guatemala. Ahmed noted, “A wave of political activism has emerged in Brazil, Chile, Ecuador, Honduras and Peru. Feeding the swell of discontent, experts say, is a growing middle class with greater expectations.” It is also clear that corruption is a large problem in many of these countries as well.
This confluence of factors that were present in Guatemala; the newly aggressive anti-corruption investigations coupled with the increase in political protests mirror those which occurred in Brazil over the past couple of years and may become more prevalent in other countries in the region. US companies need to understand that many of these most ardent anti-corruption prosecutors and investigators have had legal or other training the US. Further, the DOJ has for a number of years been training prosecutors in other countries on techniques to investigate and combat corruption. Once again witness the well-known Brazilian prosecutors from Operation Car Wash; they had US legal training. It would not be surprising at all if they are sharing their information with the relevant US authorities.
Of course, US companies could take the direct route and simply not pay bribes and not violate the FCPA. But doing compliance takes a corporate will, requiring commitment and work. If you do not have such commitment, you may find yourself in FCPA hot water in areas of the world waking up to the fact that they can actually fight bribery and corruption. Sometimes it only takes a hero to make the difference.
This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at email@example.com.
© Thomas R. Fox, 2015