Top Menu

The World’s “Most Ethical” FCPA Violators


I look at many things through a Foreign Corrupt Practices Act lens. It’s an occupational hazard I guess.

So when looking at this year’s “Most Ethical Companies” list published by Ethisphere, I looked for FCPA violators or companies currently under FCPA scrutiny – and like prior year’s – there were quite a few.

For starters, the “Most Ethical Companies” list has become diluted. This year, Ethisphere recognized 135 companies. By comparison, when Ethisphere first released its list in 2007 there were 92 companies. But who knows, perhaps companies have become ethical.

The following 2023 “Most Ethical Companies” honorees have resolved FCPA enforcement actions: ADM, Allianz, Elbit Systems, Eli Lilly, HP, IBM, Johnson Controls, Juniper Networks, Linde, Rockwell Automation, Pfizer, and Schnitzer Steel.

The following 2023 “Most Ethical Companies” honorees are currently under FCPA scrutiny: 3M, Edwards Life Sciences, and Leidos.

That a list of the “Most Ethical Companies” contains so many FCPA violators or companies currently under FCPA scrutiny is interesting.

In the minds of some, companies that have resolved Foreign Corrupt Practices Act enforcement actions are bad or unethical companies.

It is a tempting position to take.

After all, the FCPA is about bribery and corruption.

However, it is a wrong position to take in many (but certainly not all) instances.

It surprises most people to learn that a company with pre-existing FCPA compliance policies and procedures – and a company otherwise making good faith efforts to comply with the FCPA –  can still face legal liability when a non-executive employee or agent nevertheless acts contrary to the company’s pre-existing FCPA compliance and procedures.

And rightfully so.

Yet because of respondeat superior principles or the government’s seeming strict liability approach to enforcing the FCPA’s books and records and internal controls provisions, the company is exposed to FCPA liability.   Such pre-existing policies and procedures may be relevant to charging decisions or the type of resolution vehicle under DOJ / SEC non-binding policy or guidance as well as the ultimate fine amount under the advisory Sentencing Guidelines, but not relevant to liability as a matter of law.

But perhaps it should be.

Another interesting inclusion on this year’s “Most Ethical Companies” list is OTE Hellenic Telecommunications Organization S.A. FCPA geeks may recall that the Greek company (an instrumentality of the Greek government in the eyes of the DOJ/SEC) was at the center of the Comverse Technology FCPA enforcement action. (See here for the prior post).

Powered by WordPress. Designed by WooThemes