“How did this end up on my desk?”
Richard Bistrong, former front-line international businessman, contemplated at a panel last Thursday, how a letter had reached him from the Procurement Task Force of the United Nations Office of Internal Oversight Services. The Task Force requested his cooperation for an investigation being conducted about corrupt conduct in which he and his company had participated.
“Then, though I’m sure I said it with far more expletives, I thought, ‘And who the heck is Robert M. Appleton?!’”
The subsequent laughter eased some of the tension in the room as everyone sat up a little straighter in their chairs. This is what the attendees had come to hear: How did Richard begin committing misconduct, and what could they learn from his experience that would help them improve their compliance programs?
Robert Appleton, former head of the Task Force that detected the actions Richard’s former company had been taking to win tenders, then explained, “The purpose of the Task Force I had created was to give the subject of the investigation the chance to comment on their wrongdoings, and in turn, exchange punitive consequences for cooperative services. And, if you would believe it, some people don’t take the opportunity.”
Richard did take that opportunity and, despite cooperating with both the US and UK governments, was still given a 14.5 month prison sentence. He has since taken on the responsibility of educating companies and their compliance teams about the dangers of bribery and the temptations salespeople may face in their work. Richard attends events like this to share psychological and corporate tools that help prevent people from falling into a pattern of going along with, and eventually committing, corrupt dealings.
Richard and Robert invited the attendees into the mental and emotional processes of both sides of an investigation. It was a truly unique look at compliance from the intersection of two very different experiences.
DANGER: Third Parties Ahead
“I cannot stress this enough; third parties are where the real risks are.”
The first thing Richard did after receiving the cooperation letter from Robert was to call the third party, who responded with “don’t worry about it.” Robert then informed the audience about “conscious avoidance.” Many people who have fallen into the disillusionment of “getting away with it” after repeated acts of bribery, are likely to excuse what the third party is doing. The third parties’ less-than-savory actions are swept under the rug. Yet, the third party company is kept at arms’ length, becoming a case of the fox guarding the henhouse.
“Did your company know what you were doing?” Robert asked Richard.
“No, but they were happy with my performance. I had a rich compensation plan and my numbers were successful.”
It’s easy to fool yourself into thinking that bribery doesn’t hurt anyone, or, into thinking it actually helps everyone. As Richard said, “I got my commission, the third party made some money, it was a win/win.” This altruistic view that the bad behavior benefits others builds the “cocoon of corruption” (Jamie-Lee Campbell) in which Richard found himself enveloped.
“What I didn’t realize was the kickback all the players of the deal received was money lost from the community. Now, there’s a school that’s not getting funded. That’s a hospital that’s not getting built,” confessed Richard.
He had become ethically numb. It’s easy to ignore nagging second-guesses when you’re in a high class lounge, not checking Transparency International, far from the people that are really affected.
On the other side of the coin, the transgressing company can even fall victim to its own success. Organizations are very wary of negative publicity and losing funding, so when corruption schemes spur donors to pull funding, companies panic – especially those that operate on voluntary contributions.
CAUTION: Irrational Calculation of Risk
“I didn’t do a good job of that.”
Richard started out the next segment of the discussion panel by emphasizing the need for rational calculation of risk. Just because less than 1% of bribery incidents ever make it to an actual case doesn’t make the math turn out favorably. Those engaged in bribery are likely to be concurrently breaking multiple laws in multiple countries, and the consequences compound rapidly.
Loss aversion usually drives people to derive one-sided calculations. People are likely to engage in bribery to make their quarterly numbers by pulling money out of their pockets to pay for somebody to sign attestation paperwork, or they simply split it with a third party.
Furthermore, less than 20% of corruption cases are government-spurred; the rest are reported by whistleblowers. With that statistic in mind, think about how much more risk is involved in keeping corrupt action within the company. After doing the math, Richard was quick to point out that this is especially important when the case does make it to court because the company and ex-employee utilize separate legal representation. At that point, they are no longer on the same team. Those on trial will be the primary ditch diggers, finding how far down the scheme goes: What did the company know? Who knew? How high up did the knowledge go? How far down? Who was involved? How did they supervise?
The Answer to the Equation
On a much more personal note, Richard was able to retrospectively think about what measures he wished he had taken during his time earning favors overseas to stay in touch with what truly mattered to him the most – his family.
Robert finally posed the question, “What went through your head when you found out you were a DOJ target?”
Richard became contemplative. “I thought about my two kids. I thought about getting fired from my job and not being able to support my family.”
He missed several life events of his children while he served time in prison. Though he used his time productively to teach ESOL and GED classes, it was not a pleasant experience from any perspective.
Robert then asked, “If it was such a painful episode in your life, why do you now live it as a profession?”
“To tell people that it isn’t worth it.”
Richard wants to spread the gospel of calling home for advice. Listen to the voices of the people you really care about.
“Call home first,” said Richard.
“Then, call compliance,” Robert was quick to add, with a smile.
If you missed this event, you can catch the dynamic duo again in Boston in September. Email Amanda McGraw for details. If you’re thinking about joining us in September, Richard’s perspective of the New York event is a must-read.
If you would like to learn more about Richard’s story, be sure to download the Behind the Bribe Webcast to watch on-demand. If you’re more interested in Richard’s take on international compliance, download the whitepaper, Behind the Bribe: What Compliance Officers Can Learn From A First Hand Account Of The Dark Side Of International Business.
No time to read and watch both? Check out our recap from the webcast – 6 Ways to Protect Your Front-Line Employees from Temptation.
Share Your Thoughts With Us
What kinds of actions is your company taking against corruption? Interested in this event coming to your city? You can join the conversation by commenting on the blog, messaging us on JDSupra or messaging me directly on LinkedIn.
You can also use #WhyAntibriberyNYC to input your thoughts into the conversation on Twitter. Ask @RichardBistrong or @BobAppletonFCPA questions or share what your company does to prevent temptation on the front line.