Companies and individuals making corrupt accusations has become an effective way of neutralising business rivals. Making bribery claims against competitors who are tendering for the contracts is a simple way of pushing them out of the process. Obviously, this only works if an official investigation is launched. Even if there is no evidence found to support such a claim, untold damage can be done to the accused party, causing parties to abandon the tendering process. Examples of this can be seen in the recent ExxonMobile bid to buy Kosmos Energy, where other interested parties claimed that ExxonMobile had breached the FCPA and the BA in their buy out procedure. However, after an investigation that exonerated them, ExxonMobile pulled out of the purchase process. The investigation company, the Risk Advisory Group, were commissioned to evaluate the role played by Kosmos’ local partners.
Two British Banks: HSBC and Standard Charted knew that they were the target of an investigation by the Financial Services Department of New York State, and thuscalled in Deloitte Financial Advisory Services to carry out an internal investigation. Both banks have agreed to pay heavy fines and submit themselves to corporate monitoring, after being accused of violating US sanctions. These corporate monitors contracts are likely to be very lucrative; it is anticipated that companies will be queuing up to undertake this task. The job will be to ensure that the banks conform to US sanctions and anti money laundering laws.
Former FBI Director, Louis Freeh, was called in to investigate the alleged expense paid holidays to Pilipino gaming officials by a casino company that was wishing to build a casino in the Philippines. His investigation centered solely on the FCPA.
The FCPA & the BA are also being used as a weapon against companies and individuals in financial conflicts. Even if the accuser does not have any evidence it can difficult and time consuming for the accused to prove otherwise. Possibly putting them out of the picture or bidding process they may be party to. (Throw enough mud and some will stick)
A number of city corporate intelligence firms are bidding to work with lawyer Neil Gerrard from the firm Dechert, who is investigating the corruption charges against the Eurasian Natural Resources Corporation. He intends to use investigation firms that specialise in Equatorial Africa and Central Asia. The findings of his investigation will be handed over to the UK’s Serious Fraud Office.
In the US and now France (since 2012) companies that are guilty of breaches of the Acts, have, at the insistence of the respective justice departments, employed Corporate Monitoring firms, to ensure that they comply with the legislation. These firms and professionals have to be recognised by the legal authorities.
This requirement is causing many companies, who have not been suspected of such offences, to now look at using the services of corporate monitoring professionals, either full time or part time, to ensure that they are not in breach of the FCPA & the BA. Using independent experts gives these companies an edge when bidding for contracts, as they have a clean bill of health prior to the process.
The tougher legislation by the FCPA against illegal kickbacks to foreign officials, and the much tougher UK’s BA of giving kick backs to almost anyone involved in business negotiations or transactions, are creating new opportunities for law firms and private investigation firms alike.
All private investigators can benefit from the BA & FCPA in many ways. They can undertake monitoring of smaller companies to ensure that they have adequate procedures in place to counter any infringements of the law. They can lecture clients and their workforce about the Act and what they can and cannot do. They can investigate client’s competitors to ascertain if they have complied with the Act when tendering for contracts.
Most investigators have clients who have sales forces, tender for contracts and have competitors who will try to use underhand methods to gain an advantage. Many small and medium companies have the attitude that this legislation does not cover them and believe that it is only for the “big boys”. If one of their competitors uses this law to put them out of the picture in a biding process, they will be forced to take it seriously.
I would suggest that you all read up on the Act and see how you can use it to enhance your turnover and offer new services. What on the face of it first appeared to be a negative legislation can be used to your advantage.
Roy Whitehouse. CFE. CII
(Roy Whitehouse is a Certified Fraud Examiner, a long standing member of the ABI and a past President of the Council of International Investigators. His company has offices in London and Portugal, which undertake business intelligence. See http://www.wis-