The Biden Administration has released its strategy on countering corruption around the world, with lots of talk about cross-border collaboration, data collection, and tougher U.S. enforcement; but relatively little about new legislation that might add fresh burdens to anti-corruption compliance programs.
The White House released the strategy document, 38 pages long, on Monday morning. It outlines five “pillars” of the Administration’s anti-corruption strategy, with a bunch of strategic objectives under each pillar and numerous specific examples of what the Administration might do sprinkled throughout. The strategy itself is follow-up from a memo President Biden issued in June promising to make anti-corruption a central piece of the country’s national security strategy.
The five pillars are the usual flabby phrases you see from high levels of government; action items that sound bold yet really don’t tell you much. For the record, the pillars are:
- Modernizing, coordinating, and resourcing U.S. government efforts to fight corruption;
- Curbing illicit finance;
- Holding corrupt actors accountable;
- Preserving and strengthening the multilateral anti-corruption architecture; and,
- Improving diplomatic engagement and leveraging foreign assistance resources to advance policy goals.
That’s all fine, but the more substantive stuff is tucked away in those strategic objectives and examples of what the Administration might do to implement them. For example, under the bullet point of modernizing and coordinating U.S. government resources to fight corruption, the strategy document outlines five strategic objectives:
- Enhance corruption related research, data collection, and analysis;
- Improve information sharing domestically and internationally;
- Increase focus on the transnational dimensions of corruption;
- Organize and resource the fight against corruption more effectively to institutionalize this work as a long-term priority;
- Integrate anti-corruption considerations into regional, thematic, and sectoral priorities, including through new guidance.
Then the strategy document gives even more specific examples. Among them: a new anti-corruption task force to be established at the Commerce Department; raising the budgets and spending for various anti-corruption agencies and law enforcement; and investing more in data collection and data analytics for better understanding of who the corrupt actors are and how corruption scams work.
That gets much closer to compliance officers and the anti-corruption programs you manage. The question to ask now is how this invigorated attention to anti-corruption reflects other messages the Justice Department has already told us about compliance programs; and what you can deduce from all that.
For example, it’s not news that government regulators use data analytics to investigate companies, or that the Justice Department expects effective compliance programs to have access to relevant corporate data so you can perform adequate risk assessments and the like. So the questions for compliance officers are:
- How U.S. regulators might use data analytics to sharpen their own ambitions for anti-corruption enforcement (such as better analytics of how illicit cash flows move around the world); and
- Will prosecutors eventually expect your own anti-corruption programs to embrace a more data-driven approach to, say, rooting out bad actors or identifying corrupt transactions among your employees?
A compliance officer could skim through the entire strategy document, running thought experiments like that: “If this enhanced anti-corruption measure listed here comes to pass, how will that empower prosecutors and other anti-corruption regulators? How will that alter my company’s risk profile? Will it require me to change anything in our program now, so we can still claim to be an effective program?”
Higher Penalties on Gatekeepers
The strategy document also talked about the need to take a tougher stance against lawyers, accountants, business advisers, and other executives who serve as gatekeepers in the world of corporate transactions. Too often, the document said, those people can turn a blind eye to the corruption of their clients and partners.
“Deficiencies in the U.S. regulatory framework mean various professionals and service providers… are not required to understand the nature or source of income of their clients or prospective clients,” the document said, and that should change:
The Administration will consider additional authorities to cover key gatekeepers, working with the Congress as necessary to secure additional authorities. Departments and agencies will also consider ways to increase penalties on gatekeepers who facilitate corruption and money laundering, including by working with states to levy professional sanctions.
This is interesting because the Administration is basically saying it will work with Congress to enact new legislation that could clarify the anti-corruption duties that gatekeepers have; and is saying that federal authorities will work with state agencies to threaten the accounting and law licenses of such miscreants.
I’ve long said that if we want to hold individuals more accountable, the way to scare them straight isn’t’ to impose monetary fines — it’s to foreclose their ability to earn future income in their chosen profession. Great idea.
Honestly, the strategy doesn’t say much about foreign bribery that any self-respecting compliance professional wouldn’t already know. “Continue to aggressively pursue foreign bribery cases,” “work with other governments,” and so forth — we’ve all heard that 20 times before at any FCPA compliance conference that comes along.
The only points I would note are that the Administration does say it will work with Congress to enact the Foreign Extortion Prevention Act, a law that would make it a crime for foreign government officials to demand or accept a bribe from a U.S. company. The Administration would also step up cooperation with other governments to develop stronger anti-corruption laws and standards for cross-border anti-corruption enforcement.
That’s all welcome news, but compliance officers will always need to beware that as the rest of the world catches up to U.S. standards of anti-corruption enforcement, the demands on your global anti-corruption program will grow too. It took the United States the better part of 15 years to get Britain, Europe, and Canada to embrace FCPA-like anti-corruption statutes; we may be looking at a similar trajectory for the rest of the world, but sooner or later progress on that trajectory will affect your program.