Despite massive publicity to foreign bribery and federal enforcement of the Foreign Corrupt Practices Act (FCPA), there are major companies that are not as aware of the risks as they should be.
“Some industries are not as sophisticated and not as keenly aware,” Crowell & Moring partner and former federal prosecutor Kelly Currie told Corporate Crime Reporter in an interview last week. “Where you see problems is where people are entering new markets they haven’t been in before. If they are entering markets only recently, where they don’t have the experience or the compliance infrastructure, maybe that’s where you run into problems more often.”
“They are facing rude awakenings,” Currie said. “The amount of exposure folks have had to the FCPA and the compliance that is required matters. And it differs across industry sectors.”
On the issue of FCPA whistleblowers, Currie says that he advises companies that “you have to make your internal reporting system operate in a way so that people who do report feel they are being heard and that their concerns are going to be addressed.”
“Some of it is a communications issue. But I’m not saying there are not problems when people’s concerns just get swept away.”
“I’m hearing from folks in the FCPA world that they feel they are getting a lot of high quality tips.
“And it’s not just a random phone call saying — you ought to look at this company regarding conduct in this country. It’s often supported by documentation. Increasingly, they are assisted by counsel. They say they are getting a high volume of quality tips.”
Before joining Crowell & Moring in 2010, Currie was a federal prosecutor in Brooklyn, New York.
And he prosecuted both street crime and corporate crime.
Did federal prosecutors win the war on street crime and lose the war on corporate crime?
On street crime, Currie says — “I’m not a sociologist.”
“But I can give you my intuitive amateur view of it.”
“The peak of violent crime in the city was in the late 1980s and early 1990s. A lot of that can be attributed to violence associated with drug trafficking. Much of the drug trafficking in certain areas of New York City involved crack cocaine. That was a difficult, violent cycle.”
“Our goal was to take out the leadership of violent street gangs though the RICO statute and take a systematic approach by going after the significant, violent offenders.”
“Law enforcement played a role. Also, the crack epidemic lessened over time.”
You say law enforcement played a role. Was it a significant factor?
“It was,” Currie says. “All of the law enforcement agencies worked together and played a significant role. There were many times when folks in some of these communities would say to us — we used to have to put our children to bed in the bathtubs because there was so much shooting going on outside. And you helped us reduce crime in our neighborhood.”
And on corporate crime — does the way the government settles these corporate and white collar cases without getting admissions of guilt — does that affect deterrence?
“There will be instances where companies are charged criminally,” Currie said. “We are starting to see a bit of a trend where, even in the largest settlements, the government is requiring a corporate entity to plead guilty to a criminal charge.”
“Often, it’s difficult to find proof of criminal conduct by high level executives. When you get a large institution taking a plea, the question becomes — why aren’t high ranking executives pleading guilty? If you are talking about an institution with thousands of employees, sometimes it’s very difficult to show the knowledge at high levels. It’s difficult to prove that conduct that may have been going on somewhere in the organization is attributable to them.”
“Let’s think back eight or nine years ago when Arthur Andersen was charged — and that resulted in the collapse of the company. And I’m not saying that is the necessary result of bringing a criminal charge in every instance. But it happened in that case. Many people lost their jobs at a company that employed thousands of people. And don’t get me wrong, the company appeared to have a series of problems over time.”
“And back then, there was push back against the government. The government weighs a number of factors, including — how did the corporation respond, what have they done to remediate the problem, what are the concerns about recidivism?”
“I’ve been out two or three years now. As a prosecutor I listened to arguments all of the time about what the right outcome ought to be. And now, I’m making my arguments on behalf of my clients.”
“Generally speaking, I give the federal prosecutors, the SEC credit, because by and large they listen, they take on board information and they will genuinely give folks a hearing. And that’s what you want and expect of our government. And generally speaking, they do their best to reach the right result.”
Why no criminal prosecution of the big banks or their executives?
“I certainly understand why people feel it doesn’t seem right,” Currie says. “But you don’t bring a case unless you can prove it to a jury. And that’s just the way it is sometimes.”
“And these are prosecutors who really wanted to make a case.”
“I don’t think there was ever the feeling that — we need to go easy on somebody.”
“There was a lot of motivation while I was there to try and get to the bottom of this conduct.”
“But these cases are difficult to bring.”
[For the complete q/a transcript of the Interview with Kelly Currie, see 27 Corporate Crime Reporter 11(12), March 18, 2013, print edition only.]