"I ‘won’ business for all the wrong reasons, and still regret it"
This article initially appeared on The FCPA Blog, here and is reposted with the permission from the editor and publisher.
During my time as a cooperating witness, I testified about a certain transaction in Bolivia. It was for a water-cannon, otherwise known as a riot control vehicle, for the Ministry of Interior. When the letter of credit arrived from the Bolivian government it was for twice the value of the vehicle, meaning that the fee generated by the agent would equal the value of the equipment.
Certainly red-flag territory. My former employer insisted that the agent sign an FCPA attestation, and the sale proceeded. But as I once heard a DOJ FCPA prosecutor say at a healthcare event, “You can’t paper over risk.”
My memories of Bolivia, where I spent extensive time, were sparked by a recent DOJ press release about a former Bolivian public official pleading guilty to laundering proceeds of bribery. The DOJ release also referred to co-conspirators of the scheme, including the third party agents, who pleaded guilty to FCPA charges. The products involved were “tear gas and other non-lethal equipment,” so I was familiar with some (but not all) of the names in the press release.
During my time dealing with sales in Bolivia, I deceived myself into thinking that the riot control contract was a “win-win.” After all, the government was getting a world-class product, I made a substantial sale, the agent was pleased with the fee, and perhaps a group of public officials, who might be paid at what we consider to be poverty wages, might get a little something to make ends meet.
I remember competing for this contract (and others) with some of those mentioned in the recent DOJ press release. But we weren’t competing on quality or trying to deliver best value to the end-user. We were competing on which combination of public officials had grouped together and were prepared to “hand us” the contract at extraordinarily inflated prices.
Bolivia is one of the poorest countries in Latin America. But I didn’t think then, as I think now, how that additional layer of pricing could have been used for much needed in-country programs like education and healthcare. My sense of competition and wanting to win at all costs clouded any notion that paying inflated and uncompetitive prices damaged the country and its institutions, and abetted state capture at its worst.
Now, long after finishing my prison sentence, I still regret being a party to all of that waste and the societal impact. During my time as an international sales executive, I avoided thinking about the consequences of graft and my role in it. Instead, I just focused on what was immediately important, like making my goals, objectives and deadlines. What an awful deception, and no one’s fault but my own.
During your next training session, perhaps you’ll talk about the challenges societies face where your teams work — such as economic development, education, access to healthcare, and human rights. That’s something I tried to do in my recent release of Compliance Corner, in a vignette titled “The why of compliance.” Those may seem like distant topics for compliance training, but they’re not, as I finally realized.
In the recent Bolivia cases, the DOJ eventually asked for sentence reductions for the co-conspirators who cooperated in the investigations of the public officials, post-sentencing. Yet in the end, everyone lost, especially the people of Bolivia. They lost resources that might have gone to schools, hospitals, and other programs.
I “won” that business in Bolivia. And I still feel the sting of regret because I won for all the wrong reasons.
P.S. To learn more about my journey From Corruption to Compliance click 👉👉🏽👉🏼 here.