As the Department of Justice and the Securities Exchange Commission increase investigations of FCPA violations, companies try to determine the best way to prevent bribery. How about asking the enforcers of the FCPA? Bill Jacobson is a former assistant chief of the Criminal Division Fraud Section of the DOJ. He was a leader of the FCPA investigation teams and elevated violations to prosecution. Jacobson advised five elements to avoid prosecution:
Self Reporting
In the instance of a scandal, it is always best if the company comes forward to report any violation to the government agencies. The punishment is much more severe when the DOJ or the SEC discovers the violation rather than the company. Just ask Wal-Mart about their allegations in Mexico.
Senior management has clean hands
We’ve all heard that it starts from the top. It is imperative for senior management to lead by example. The executives at the high levels set the tone and cultivate the culture of an organization. If their emphasis is on integrity it will make a positive difference. Just ask the former CEO Sergio Ermotti of UBS who had to step down when violations occurred under his watch.
Cooperation with the government agencies
No matter how clean and pure a company is, there will always be a chance of corruption. If a violation occurs, it is best for the company to cooperate with the government agencies rather than try to cover it up. As the media frenzy always emphasizes the cover up rather than the actual crime itself. Just ask Martha Stuart.
Robust remedial measures
The DOJ and the SEC appreciate when the company initiates solutions to respond to the problem. Charges will be less severe if the company demonstrates taking action to eliminate or mitigate the corruption. Just ask Morgan Stanley about the Garth Peterson case.
In-place compliance program
A strong compliance program will protect companies against rogue employees and hold the rogue employee responsible for their action. The U.K. Bribery Act of 2010 states the company’s greatest defense is to have a compliance program in place to continuously train employees and cultivate a culture of integrity. Just ask your compliance officer.
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