U.S. corporate honesty puts spotlight on bribes 04/7/2004 12:08:31 PM By Susan Cornwell
WASHINGTON, April 7 (Reuters) - The recent increase in U.S. companies embroiled in foreign bribery probes reflects a new climate of corporate honesty rather than a surge in shady dealings, anti-corruption campaigners and analysts said.
"There's no reason to think bribery has increased. That's always been a problem," said Laurence Urgenson, a former head of the Department of Justice's criminal fraud section.
Corporate scandals from Enron Corp. (ENRNQ) to WorldCom Inc. (WCOEQ) and the resulting Sarbanes-Oxley corporate and accounting reform law of 2002, have seen U.S. companies stepping up their vigilance for all kinds of misdeeds, including bribery, these experts said.
"The recent uptick (in cases) I would attribute to the increased corporate compliance environment," Urgenson said. "People are coming forward and talking to the government rather than being detected by investigations."
Lucent Technologies Inc.'s (LU) announcement on Tuesday that it was ousting four executives from its Chinese operations was the latest example involving possible violations of a 1977 law barring U.S. companies from bribing foreign officials to get contracts.
Lucent disclosed the potential violations of the Foreign Corrupt Practices Act in a filing with the U.S. Securities and Exchange Commission, saying that the problems came to light after a probe of its Saudi Arabia offices led to an internal audit of its operations in 23 other foreign countries. Halliburton Co. (HAL) , the oil services firm once run by U.S. Vice President Dick Cheney, has reported possible kickbacks in Nigeria.
"My experience with the corporate community is that they do take the (Corrupt Practices) law quite seriously," said Nancy Zucker Boswell, managing director of the U.S. chapter of Transparency International, an anti-corruption watchdog in 90 countries.
"Having said that, there is no question that the issue of corporate governance has taken on a far greater prominence. ...And at the highest levels companies are taking another look at control mechanisms to be sure they are effective," she said.
In another recent case, two former executives of HealthSouth Corp (HLSH) pleaded guilty to criminal charges in a kickback scheme involving a hospital in Saudi Arabia.
"One of the great achievements of Sarbanes-Oxley is to make people in senior financial executive positions nervous," said Urgenson, who is now with the Kirkland and Ellis law firm in Washington.
Experts say they also observe more interest from federal prosecutors in foreign bribery cases.
There has been "enhanced government attention" to these cases, said James Bucknam, executive vice president for operations at Kroll Inc. (KROL) , a New York-based risk consulting company.
The growing globalization of business, and competition from other countries that blink at bribery could increase the number of Americans engaging in such practices, added Bucknam, a former federal prosecutor and senior adviser to former FBI Director Louis Freeh.
"There's no shortage of people around the world with their hands out," said Bucknam.
In 1999 the 30-member Organization for Economic Cooperation and Development pledged to enact laws against bribing foreign public officials.
Boswell of Transparency International said her organization hoped to do a report card on how the OECD convention is being enforced, country by country. So far she is underwhelmed by the enforcement record outside the United States.
"The question is, Where are the cases that these governments should be bringing?" she said. |
