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In The Classroom

Included in the mission of FCPA Professor is to foster a forum for academics who are increasingly covering Foreign Corrupt Practices Act or related content in the classroom.

Today’s post is from Jeffrey Klink.  Klink, a former Assistant United States Attorney, is the CEO of Klink & Co. (here) a global consultancy engaged in anti-bribery compliance initiatives for publicly held and private businesses, including training, due diligence, policies and procedures, and investigations.

As evident from his post, Klink also teaches a course on anti-bribery compliance at the University of Pittsburgh Katz Graduate School of Business.


When I agreed to create and teach a course on anti-bribery compliance for the University of Pittsburgh, Katz Graduate School of Business, I was excited but wary.  I worried that students would not really have an interest in global compliance issues like I do.  Would eyes glaze over when we talked about training, pre-acquisition due diligence, and third-party risk?  Let’s be honest, for many, the mere mention of the word compliance brings to mind organizational mandates from afar, on-line courses that no one likes or pays much attention to and reams of unread paper in corporate handbooks.  My concerns were misplaced. Not only were the students interested, but many had real world experience with corruption, in countries with emerging markets.

My supportive colleagues at Pitt advised me, at most, that I could anticipate 12-15 students to enroll in the course, but, be prepared for a course cancellation if there were fewer.  In the end, there were 24 students from the MBA and the Masters in Accounting Programs enrolled in the class. The University asked me to teach this course again in the fall.

For the course textbook, I used a book that my colleague, Tracy Pastrick and I, put together for a course we created for the Pennsylvania Bar Institute in 2011 with the catchy name “The Foreign Corrupt Practices Act”.   For the class, I supplemented that book with resources made available by Transparency International, the Organization for Economic Cooperation and Development, this web site (FCPA Professor), and Shearman & Sterling’s excellent web site.  I encouraged students to read the Financial Times and the Economist, as well as the Wall Street Journal to stay abreast of the most recent bribery cases.

We studied cases of import, like Innospec, Nature’s Sunshine, the many Siemens cases, and focused on keeping topical issues in sight, like the Africa Sting cases.  We talked about the current investigation into bribery at News Corporation, and the ongoing problems in the BRIC nations. We discussed the several years old Hermitage Capital debacle in Russia, where a U.S. investment fund had its offices raided by corrupt law enforcement officials as part of a successful scheme to obtain a $200 million tax refund.  That the Russian lawyer for Hermitage Capital, Sergei Magnitsky was brutally beaten to death in prison simply because he opposed the corruption in Russia, was eye-opening.

As a class project, each student was required to perform a detailed analysis of the risks associated with an organization entering a specific country with less than stellar Transparency International ratings.  We chose 12 countries and talked about the importance of third-party due diligence, hospitality and entertainment, typical schemes involving third parties and bribes, and secondary problems related to cross-border transportation of goods, taxes, environmental regulations, permits, and inspections.

I also wanted the students to understand the compliance costs suffered by multinational businesses, including my perspective as a former DOJ prosecutor, on the unfairness of certain DOJ and SEC positions.  We discussed the pros and cons of self-reporting.

One of the critical issues we focused upon was the human cost of bribery and corruption.  It seems that the topic of the human costs associated with corruption and bribery is missing from FCPA conferences; after all, this was the reason for the creation of the FCPA in the first instance and it is an issue worthy of review and discussion.

One of my students, a Bosnian who had fled the country during its civil war in the early 1990’s, had the class spell-bound as he recounted paying bribes to leave his country and illegally flee to Germany.   This student recounted how the country was and still is completely corrupt, with literally a handful of elites in Bosnia controlling all wealth by cheating their fellow citizens out of every opportunity, large or small, through corrupt activities.  It was a tragic, but well-told tale.

A Chinese student studying at Pitt gave a great presentation about the corruption risks, but also the rewards of doing business in China.  She had a unique perspective on corruption in China, including bribery in education (not unusual to have to pay to go to a good school), bribery in business (land acquisition often involves bribes), but also the opportunities.  She noted how many companies had successfully entered China and the growth of the Chinese middle class.

Many of the students in the class worked full-time for large global businesses and were attending school on a part time basis to obtain advanced degrees.   These students generously shared their experiences with me and the class during our discussions.  When I asked whether any of the students had ever taken on-line compliance training courses, there was a loud universal groan.  The consensus from the class was that no one paid much attention to on-line compliance courses. The standard way of taking an on-line compliance course seemed to be to occasionally click on a key to allow the training course to progress, so that it would soon mercifully end.

Ultimately, the class was about global business and the fact that opportunities are often found in places where corruption and bribery flourish.  Providing the students with a global perspective, not only about corruption and bribery, the underbelly of the global economy, but also about rewards and global career opportunities, made teaching the course worthwhile.

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