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U.S. State Department Anti-Corruption Program

Today’s post is from Danforth Newcomb (Shearman & Sterling – here [1]), a dean of the FCPA bar, who describes his recent trip to Indonesia on behalf of the State Department.


U.S. State Department Anti-Corruption Program

Danforth Newcomb

There is a least one aspect of the U.S. Government’s anti-corruption efforts that has gone largely unnoticed by compliance professionals.  From time to time, the State Department sponsors trips by speakers from many fields and backgrounds to engage international audiences on their topic or specialty.  Last month, at the invitation of the U.S. Embassy in Jakarta, Indonesia, I spent two weeks meeting with Indonesian audiences to discuss the U.S. FCPA and respond to questions and comments from those audiences about Indonesian corruption issues.  My experience with matters of corruption in Indonesia dates back to the beginning of my practice in this area in the late 70s, and so I was with a good deal of interest that I participated in this program.

The program was conducted by the U.S. Embassy in Jakarta under the auspices of the State Department’s U.S. Speakers and Specialists program.  During my two-week visit to Indonesia, I met with approximately 20 different groups that represented a wide range of Indonesian society.  The meetings were held in four Indonesian cities: Jakarta, Yogyakarta, Surabaya and Medan.  In each city, I spoke at universities, public organizations, government offices, non-government organizations and the media.  The presentations generally followed the same format.  I spoke for 20 to 30 minutes about the FCPA – how it has been enforced in practiced and the partnership between the private sector and enforcement officials on compliance matters.

After the initial presentations, there was usually a discussion for an hour to an hour and a half ranging over a wide diversity of corruption-related topics.  Depending on the audience, my presentation and responses to questions generally emphasized slightly different facets of the topic.  For example, when speaking to university students, the discussion usually centered around the role of civil society in anti-corruption efforts.  When meeting with the media, I often discussed the role that the media played in the original Watergate hearings that lead to the adoption of the FCPA.  When the audience was from business organizations, the discussion usually turned to anti-corruption compliance programs and the relative state of corporate governance in the American and Indonesian companies.

Perhaps most interesting were the meetings I had with Indonesian governmental organizations.  I met with representatives of the Indonesian anti-corruption commission (“KPK”), representatives of a local legislative body, judges and leadership of the high court of North Sumatra, representatives of the Ministry of Trade, and two different prosecutors’ organizations.  Needless to say, these government meetings led to the most technical and concrete discussions about U.S. anti-corruption methods and experiences.  In each of the government discussions, the hardest concept to convey was the role of our private sector in investigating and remediating corruption problems at large corporations.  There was a fair amount of surprise when government listeners heard that the Siemens investigation was largely conducted by private law firms paid by the corporation.  There was also some skepticism when I described the role that emails play in the typical FCPA corporative investigation.  Not surprisingly, there was a good deal of interest in government to government cooperation methods and in gathering evidence from distant jurisdictions.

In all of the meetings I was surprised by the degree of interest and engagement this topic received from the audiences.  There is clearly a substantial concern about corruption by a wide swath of Indonesian society.  At each of my meetings, it was readily apparent that Indonesians are looking for better tools to deal with what they themselves perceive to be wide spread domestic corruption.  While in some cases it seems that foreign investors were often viewed as a source of corruption, it was more common to hear participants’ concerns about Indonesian government officials and domestic organizations.  In that regard, there were several spirited discussions about whether it was practical for the anti-corruption forces in Indonesia to enlist the business community in compliance efforts.  These audiences were particularly interested in discussing what was an “Effective Compliance Program”, and whether such programs could be expected from Indonesian organizations.  It was also interesting to note that most of the participants from business organizations were in some level already familiar with U.S. FCPA and that many of them had been trained by their employers, or other U.S.-based business partners, on the broad purposes of the Act.  These business audiences had no doubt that international business players needed to have anti-corruption compliance programs as part of the standard elements of their organization.

It was also interesting to note that several of the universities had anti-corruption and anti-money laundering programs of study that seemed to have a wide student interest.

One of the most interesting meetings was held at an experimental venue sponsored by the U.S. Embassy called “@America.”  This is a multi-media auditorium and meeting venue that presents to the Indonesian public many aspects of American culture and is located in one of the larger shopping malls in Jakarta.  This presentation and discussion was in fact substantially similar to discussions at various universities and its audience was mostly university graduate and undergraduate students.  While my trip to Indonesia coincided with reports in various U.S. media of some unrest directed at U.S. institutions as a result of a film that offended many Muslims, the representatives of the U.S. Embassy and I were welcomed at any number of universities and other public forum with cordiality and interest in my presentation.

From all the reactions that we got, the program seemed to have been well received and effective in furthering the public diplomacy agenda of the State Department.  I hope that this will not be the last of such programs as it was very interesting for me and seemed to achieve the State Department’s goals at the same time.