Open Air Blog

by Howard Sklar

Frequent Writer, Speaker, Video-Podcaster on Anti-Corruption

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Bourke Loses, Again

Congratulations to the FCPA Unit and to the Southern District of New York’s Andrew Fish and Harry Chernoff.

As much as I thought they lost in the courtroom, they won on the law.

The Second Circuit soundly rejected Bourke’s arguments. They even went so far as to say that even if the evidence was “new,” Bourke would still lose.

I often say that there’s no such thing as total victory. It looks like this might be the exception.

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Finally, A Bit of a Safe Harbor in FCPA Enforcement. You’re Welcome.

You’re welcome. I’m saying, I’m taking credit for creating a safe harbor in FCPA prosecutions, and I’m sure you’d say thank you, so I’m saying, you’re welcome.

How did this come about, you ask? After all, I’m just a junior partner in the FCPA Commentariat. I’m not Tom Fox, I’m not Dick Cassin. How could I get the DOJ and the SEC to create a safe harbor all on my lonesome?

With one question.

Here’s the situation. Last week was the ACI FCPA Conference. If you didn’t go, then one of two things must be true: either you were tied up and being held by Somalian pirates, or you’re not part of the FCPA world. Maybe I’m exaggerating. A little. It really is the premier FCPA conference, and one which I take pains to attend, along with all my little FCPA friends. Dan Newcomb was there, Palmina Fava, Suzanne Fulsom,...

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Mandatory Reading for Private Equity or Venture Capital

Like others, I read with interest the Tyco non-prosecution agreement. I was impressed by several facets of the NPA (including the fact that they got an NPA at all).

One thing I was struck by was in paragraph 16 of the compliance section (attachment B). The paragraph describes a requirement for mergers & acquisitions:

The Company will develop and implement policies and procedures for mergers and acquisitions requiring that the Company conduct appropriate risk-based due diligence on potential news business entities, including appropriate FCPA and anti-corruption due diligence by legal, accounting, and compliance personnel. If the Company discovers any corrupt payments or inadequate internal controls as part of its due diligence of newly acquired entities or entities merged with the Company, it shall report such conduct to the Department. (emphasis added).

Interesting language....

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LiveTweeting the ACI FCPA Conference

There are several of us live-tweeting the FCPA Conference in DC. The hashtag we’re using is #ACIFCPAConf. Search for that to get conference highlights.

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I Guess Everyone Is Just Smarter Than I Am

Yesterday, I spent 2-3 hours reading the guidance, jotting notes in the margin, and doing some thinking on it. I’m on page 58. I don’t yet have an opinion: how could I? I haven’t finished reading it, much less thinking about it. I guess everyone is just smarter than I am, because I’ve heard several “it stinks” opinions, and seen articles about what it has in it, and what it lacks.

Here’s what I’ve come up with so far about the Guidance:

  1. It’s the product of a tremendous amount of work. There are 418 footnotes. Cites to relatively obscure statutes, rules, and regs. Discussions about historical cases, and where those cases fit into an overall prosecution approach. And remember, it had to go up the chain of command at both the DOJ and the SEC. Which means twice the bureaucracy. Plus, let’s remember, these are people with day...

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Snatching Defeat from the Hands of Victory: Why Bourke Might Win

Bourke should lose. On the law, he should lose. And on the law, he’s lost every time he’s made the argument. So I don’t know whether I should be impressed by his tenacity, or annoyed that he’s bringing up the same argument over and over. I can say that his counsel performed excellently in front of the 2nd Circuit the other day—better than the government, honestly—and might actually pull out a Hail Mary win.

Let’s start with the facts, and what was before the 2nd Circuit. Then to the argument itself.

Frederic Bourke was convicted at trial for scheming to bribe Azeri government officials so he could benefit from the privatization of the Azerbaijan oil industry. Bourke claimed he was an innocent investor, so knowledge was the crucial issue. The government established knowledge through the testimony of a Swiss lawyer named Hans Bodmer.

Bodmer...

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My Latest on Forbes

QR Code for my latest Forbes article

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AKA Bribe

Thanks to Mary Jones via Tom’s FCPA Compliance & Ethics Blog. She came up with this list of ways companies have described illicit payments in their books and records:

*Local/Special/Customs Processing Fee

*Interventions (Special Intervention or Customs Intervention)

*Expediting Fee (including Expedited Release)

*Express Fee (including Express Clearance)

*Local Government Agency Charge

*Foreign Charge

*Special Handling Fee

*Special Operation

*Urgent Dispatch or Processing Fee

*Additional or Special Assessment

*Additional or Special Transit Fee

*Customs Overtime

*Government or Other Outlay

*Fine or Penalty

*Maritime Fee

*Impound Charge

*Customs Evacuation

*Preclearance Fee

*Temporary Extension

*Emergency Release Fee or Payment

*Safe Passage Fee

*Community Fee

*Operation Fee

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Occupational Hazards: Seeing the Worst in Everything

I just read about an interesting new app called Snapchat. As a consumer, it sounds fantastic. Secure, fast chatting capability, with pictures and text. According to All Things D, it’s a fast-growing service, with 20 million “snaps” sent per day, and over 1 billion since last September. It launches for Android today.

Here’s the description of the service that’s on All Things D. Tell me if you see the problem. I saw it in about 10 nanoseconds.

It allows users to take a photo with their phone, overlay a little bit of text, and send it to another user. The recipient can view the photo message for a set amount of time between one second and 10 seconds. Then it’s deleted forever from both people’s phones, and from Snapchat’s servers.

See the problem? Originally, the app “gained notoriety” for being a teen sexting app. I don’t see the main...

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Why I’m Not Using “Tone at the Top” Anymore

Once again returning to my contrarian roots, I’m not going to talk about “tone at the top” anymore. Why? Because it’s become more jargon than substance. Same with it’s kissin’ cousin, “commitment from the top.” I’ve heard that latter phrase used when “tone” just isn’t enough. The problem is, neither is “commitment.”

Instead, let’s create a new umbrella idea called “demonstrated seriousness from the top.” The “serious” piece includes tone. The “demonstrated” piece is new, and in my opinion, is what’s been missing from the old formulation.

A company’s commitment to reducing instances of bribery and detecting when bribery occurs is a recognized requirement. I’m not arguing that. But “tone” is too often about words. Demonstrated...

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