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International law firm Chadbourne & Parke released its latest compliance report last week, uncovering trends in anti-corruption enforcement against individuals over the last six years. According to the Chadbourne Compliance Quarterly Special Report, senior executives are the employees most likely to see their names attached to a corporate civil or criminal bribery charge. Chadbourne partner M. Scott Peeler advises clients on all aspects of white-collar litigation, government investigations, and compliance with the Foreign Corrupt Practices Act, the U.K. Bribery Act, and local anti-corruption laws. In authoring the report, he looked at factors surrounding 61 individuals who found themselves targeted by a government investigation. “I’m not saying that the government is targeting individuals left and right,” says Peeler. “But they’ve targeted a lot of people.” Since 2007, the U.S. government has set yearly records in terms of the number of FCPA enforcement actions brought against companies. And many corporate execs are going to jail or facing serious charges for their involvement in their companies’ bad acts abroad. Peeler looked at a sample set of individuals who faced criminal or civil actions. They reflected mid-to-senior-level management positions with 26 corporations that were prosecuted civilly or criminally. The majority of the individuals Peeler studied held titles of president, CEO, or chief operating officer. Peeler advises corporate clients to put meaningful policies in place that seek out instances of corruption, mitigate risks wherever possible, and train employees to better identify potential corruption risks. “It’s not only the right thing to do for the company—for which these individuals have a fiduciary duty—but it’s also smart because they individually could face real liability if they don’t,” he says. Peeler’s data showed that the amount of the bribe allegedly paid was not the biggest determinant of whether or not an individual faced civil or criminal liability. There were almost as many cases involving bribes of $100,000 to $500,000 as there were between $1 million and $2.5 million. What mattered more was the degree to which the accused individual appeared to be involved in the dirty dealing. Of the cases in which the individual had direct knowledge of the bribes and had a hand in the activity, 44 faced criminal charges. “That’s clearly the worst-case scenario,” says Peeler, in which an executive, or any employee, knew there were bribes being paid and took some action to encourage the activity. “Obviously, the more you know and the more steps you took,” he says, “the worse it gets.” In the last few years, Peeler has seen a sharp escalation in jail time for bribery charges. “Courts are taking this seriously, and the U.S. government is, as well,” he says. “There are a lot of people out there—and more so each today—who didn’t understand the FCPA and are ending up in jail,” he says. The risk of prosecution may be greatest when doing business in foreign jurisdictions close to home. Forty-four percent of the cases Peeler studied involved bribes paid in Mexico and Central and South America, compared to Asia (32 percent), Africa (21 percent), and Europe (3 percent). “What you’re really seeing is those are the emerging markets,” says Peeler. Some cases involved allegations of bribes being paid in more than one jurisdiction. In those instances, Peeler accounted for each country involved. Peeler is also advising his clients about the potential ramifications of the U.K. Bribery Act, which went into effect July 1. “It will be interesting to do this sort of a study six or seven years from now, when there have been real enforcement actions under the U.K. Bribery Act.” So far, the only action taken under the law was a prosecution of a court official for taking a small bribe in a traffic case. But Peeler anticipates vigorous enforcement of the British law in the not-too-distant future. “I’ve called the U.K. Bribery Act the ‘FCPA on steroids,’ because there are many ways in which it’s a stronger piece of legislation than the FCPA,” says Peeler. Peeler advises his clients to pay attention on all anti-corruption fronts. “What’s good for the company is also good for the officer,” he says. And as he tells his clients, putting together procedures that mitigate risk is “not as hard as people think it is.” See also: “Is the GC Your Company’s ‘Moral Compass’?,” CorpCounsel, August 2011.

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