Today’s post is from Professor Bruce Bean  (Michigan State University College of Law). Prior to academia, Bean had a diverse practice career including at various law firms and in-house counsel positions.
Last week in London, the University of Sussex Centre for the Study of Corruption presented its annual conference, this year entitled “Corruption and Anti-Corruption: Challenges and Future Perspectives. ” This one day affair, organized by Professor Dan Hough , Director of the Centre, was held at the Canary Wharf offices of Clifford Chance with about 150 attendees.
Professor Michael Johnston  from Colgate, author of Syndromes of Corruption, gave the keynote address, Are we there yet?
He emphasized these themes:
- All countries have corruption. It is not simply a problem of the “warmer parts of the world.”
- Corruption will never be “eliminated.”
- Anti-corruption efforts should not mean “Be like us.”
- Corruption is one aspect of political integrity, and the liberal democracies have a major corruption problem with the funding of political campaigns where we have merely legalized corruption.
My presentation emphasized the practical problems of complying with Section 7 of the Bribery Act, the strict liability corporate crime of Failing to Prevent a Bribe. Lost on my co-panelists was my principal point, that the penalties and disgorgement amounts extracted in settlements with the Department of Justice and the Securities and Exchange Commission deplete shareholder funds while not incentivizing corrective action by senior management.
Robert Barrington, Executive Director of Transparency International U.K., had no sympathy for the dilemma faced by companies doing only a “part of a business” in the UK, the sole jurisdictional nexus required under Section 7 of the Bribery Act. Ignoring the moral hazard of permitting senior executives to continue business as usual since it is only shareholders who might have to pay, Barrington suggested, naively in my view, that if shareholders do not approve of such settlements, “they can always change the CEO.”
Barrington’s major focus was on Transparency’s new global initiative, a world-wide survey of lobbying. He pointed out, as an example, that there is currently no information available to the public about lobbyists in London, and that Parliament is currently considering this issue. Barrington flatly stated that the bill before Parliament was “appallingly bad.” Referring to the U.S. requirement that lobbyists register and report, he observed that the U.S. procedure is a good example of where “transparency is not enough.”
Dmitri Vlassis, Chief of the Economic Crime Branch of the United Nations Office on Drugs and Crime in Vienna, noted that 2013 was the 20th anniversary of the creation of Transparency International and the 10th anniversary of the United Nations Convention Against Corruption. Vlassis announced that 167 nations have become party to the UNCAC, but, curiously, New Zealand has not. New Zealand declines to ratify the UNCAC on the theory that they are already #1 on the Transparency International Corruption Perceptions Index!
The final speaker of the day was Sir Ian Blair, Head of the Metropolitan Police (Scotland Yard) from 2005-2008. He made the surprising disclosure that Scotland Yard has itself had serious corruption problems. In the 1970’s, the then head of the Yard announced that he was trying to insure that there were more criminals apprehended by the Metropolitan Police than were working there. According to Blair, this problem has been substantially improved upon, but even at Scotland Yard, corruption will always be an issue.
Transparency International’s new emphasis on lobbying may indicate the beginning of a long overdue focus on political integrity in the economically advanced nations. Meanwhile, we await an indication of the approach prosecutors will take toward strict corporate criminal liability under the Bribery Act.