Posted Aug 06, 2007 04:13 pm CDT
Depending on where you are in the world, it might be thought of as payola. Or baksheesh. Or a backhander, among other terms. But for American companies, a bribe by any name is a bigger problem these days than it used to be.
The increased focus on corporate compliance in recent years has led to a growing number of prosecutions under the Foreign Corrupt Practices Act of U.S. companies involved in illegal payola abroad, reports Inc. magazine. And that is prompting companies to review their policies and practices.
“For years, U.S. companies thought the only thing they had to do was to make sure that there was a company policy that didn’t condone bribery and an internal compliance program to make sure that employees knew what to do and not to do,” says John W. Brooks, of Luce Forward Hamilton & Scripps in San Diego. “Now the government thinks that’s not enough.”
The problem is, it can be difficult to distinguish between permitted, customary gifts that are virtually required to do business in some foreign settings and payments that could be considered bribes.
The only way to be certain which is which is when a prosecutor makes a determination, after the fact. And, at that point, if the company’s call was wrong, a mistake can be costly, the article notes. “Fines can range into the tens of millions of dollars, and offending companies are sometimes forced to retain the services of a compliance monitor at their own expense.”