14th International Anti-Corruption ConferenceStrengthening Global Action for an Accountable Corporate World

Homer E. Moyer, Jr.Miller & ChevalierWashington, DC

Bangkok, Thailand13 November 2010

2

Incentives for Resisting Official Corruption

• Commitment to ethical business practices, integrity

• Compliance with laws

• Reduce costs

• Compete on superior quality, service, reliability

• Refuse to cooperate with kleptocracy

• Avoid high-risk corrupt markets

• Appreciate linkages with international crimes

• Reduce requests for bribes

• Seek to use integrity as a competitive advantage

3

Enforcement as an Incentive to Compliance

• Various, complementary anti-corruption initiatives have obvious value

• Enforcement of anti-corruption laws creates unique incentives to compliance

• The American experience under the US Foreign Corrupt Practices Act demonstrates the impact of increased enforcement

• US enforcement has been characterized by more cases, larger and diverse penalties, self-reporting, publicity, and more sophisticated compliance programs

4

Incentives When Anti-Corruption Laws Are Enforced

• Avoid cost of independent investigations

• Avoid the extraterritorial reach of anti-corruption laws

• Avoid costly corporate fines, disgorgement

• Avoid debarment, cross-debarment

• Avoid expensive remediation

• Avoid period of probation

• Avoid an independent compliance monitor

• Avoid loss of shareholder value

• Avoid individual liability, imprisonment

5

Tipping Points for Corporate Compliance

• Meaningful, visible enforcement of anti-corruption laws

• The belief that bribing officials risks harmful commercial or enforcement consequences for you

• Corporate counsel awareness of international conventions

• The belief that aggressive corporate self-enforcement will be recognized and credited

• Simultaneous supply side and demand side enforcement

• The perception that most competitors are complying

6

Total DOJ and SEC Enforcement Actions 1977- April 1, 2010

0

20

40

60

80

100

120

140

1977-1981 1982-1986 1987-1991 1992-1996 1997-2001 2002-2006 2007- April 1, 2010

En

forc

emen

t A

ctio

ns

7

2

14

23

0

5

10

15

20

25

2009 - 1st Q uarter 2010 - 1st Q uarter

2009 Compared With 2010

1st Quarter SEC and DOJ FCPA Enforcement Activity

Resolved Enforcement Actions

Individuals andEntities Charged

Note : Updated through 1st Quarter 2010. These figures include both the Daimler sett lements, resolved April 1, 2010, and the bribery-related enforcement action against BAE Systems plc, which, as a result of negotiations, involved no actual FCPA charges.

$50,000 $628,750 $496,250

$9,273,333

$875,300

$7,146,154

$60,463,311

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

1977-1981 1982-1986 1987-1991 1992-1996 1997-2001 2002-2006 2007-April 1, 2010

Average Corporate Penalty (DOJ and SEC) 1977- April 1, 2010

7

14

54

13

25

45

0

5

10

15

20

25

30

35

40

45

1977-1981 1982-1986 1987-1991 1992-1996 1997-2001 2002-2006 2007-April 1, 2010

Resolved Enforcement Actions Against Individuals 1977-April 1, 2010

7

The Continuing Evolution of Compliance “Best Practices”

• Free-standing anti-corruption compliance programs

• Practical guidance for employees

• Greater involvement of Audit, Supervisory Committees

• Management accountability, discipline

• Development of a corporate culture of compliance

• Extension of corporate standards to third parties

• Monitoring and testing of program effectiveness

• Belief that an effective compliance program can actually prevent bribery

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