The Foreign Corrupt Practices Act and Ethics

I am no expert on FCPA matters although was a former Managing Director for the Americas of an international UK based computer networking company. With operations in twelve countries, I recall many online and offline discussions involving ethics and best practices, some that took place in board meetings about how to do business the right way.

Some overtures from third parties and government agencies helping my former company were cleverly disguised and innocent at first. I suspect many are, but then can rapidly snowball into areas where payments and bartering are on the table.

Like any other fraud or simply a pay to play scheme, small shortcuts that are rationalized and justified tend to gather steam and assume a life of their own. How we detect and quickly flag these ethics violations will determine how deep our slipperly slope becomes.

Interestingly, over a five year period we counted a total of fourteen incidents that were reported from individual country operations up to our Board of Directors. With the exception of one, we walked away from the opportunity unable to justify the terms of engagement and unacceptable profit margins.

Ethics and best practices are essential to the success and sustainability of any organization. Unfortunately, a counterpart of mine made a poor decision and we were forced to pay a government agency for a one-sided contract that was never agreed to.

There are those who believe that the Department of Justice needs to decide whether to be a regulator or an enforcer of multinational firms who violate FCPA guidelines. Either way, companies need to teach, educate, practice, and enforce their ethics and corporate values.

In some instances, I would rather see the DOJ impose a fine and be done with it. In the recent case of Walmart, and I’m not a huge fan, it appears their behavior was meant to sucure building permits from the Mexican Government.

If you conclude that their behavior is truly not ethical, reprehensible, and illegal, you and consumers can boycott their stores and or protest. In other cases, the way you stop stupidity and greed is to hit these big internationals hard on their bottom line.

A minimum of a $1 billion fine is a good place to start, and payable within thirty days of the DOJ’s declaration of guilt. Then, we can sit back and see if a particular Board of Directors will sweep out top executives and kickstart a morals based culture that can sustain itself for a long time.

Sound ethics, continued training, and self-policing is the key to a thriving organization that values their reputation and differentiates itself from their competitors. As always, strive to do the right thing and do not put your own interests first!

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