Tone at the Tippy Top

In compliance circles, we often talk about the importance of tone at the top of an organization, the theory being that the attitudes of the top executives of a company towards corruption will trickle down to all employees.

For the past four years, the U.S. had, shall we say, mixed messages from the top about corruption. While DOJ officials continually asserted their commitment to rooting out corruption, the previous president was on record calling the FCPA a “horrible law” and apparently even tried to have it changed or scrapped all together. With corporate FCPA enforcement virtually frozen since the new administration took office (the last corporate settlement was announced in early January), the anti-corruption Magic 8-Ball had been turning up “Reply hazy, try again.”

But earlier this month, the outlook got a lot clearer when the White House issued a National Security Study Memorandum on the Fight Against Corruption along with a statement from President Biden. “Fighting corruption is not just good governance,” Biden asserted. “It is self‑defense. It is patriotism, and it’s essential to the preservation of our democracy and our future.” The White House announcement was followed closely by an initiative announced by Attorney General Merrick Garland to combat human smuggling and trafficking and fight corruption in Central America.

President Biden’s strong statement against corruption is refreshing, though its framing in terms of national security is provocative, particularly since ethics has become such an important part of corporate efforts to prevent corruption. Is the primary reason to fight corruption self-defense or because it’s just the right thing to do?

Additionally, the Memorandum is not confined to foreign corruption. “My Administration will lead efforts to promote good governance; bring transparency to the United States and global financial systems; prevent and combat corruption at home and abroad; and make it increasingly difficult for corrupt actors to shield their activities,” it says (emphasis mine). Will there be efforts to rein in domestic corruption? Might the FCPA play a role?

The Memorandum calls for an interagency review to be completed in 200 days, so we can eagerly await the results of the review in late December. In the interim, this new tone from the tippy top is surely welcome for all those trying to imbed anti‑corruption values in their workforce. If you have thoughts on the President’s statement or what might come from the interagency review, drop us a line.